Thursday, June 30, 2022

Okada paints the town plum as resort gears for opening

Anyone visiting Manila in recent weeks may have noticed a distinct plum-colored tone to the local billboards and ads. The campaign has been part of an initiative to raise awareness for Universal Entertainment’s $2.4 billion Okada Manila resort, which is scheduled to preview next week.

The project will be the fourth addition to the Entertainment City complex and, covering an expanse of 44 hectares, will be the biggest integrated resort in the Philippines to date. The complex is being built by Universal’s local unit Tiger Resort Leisure and Entertainment.

“Tiger is very well known, we just have to convert this to Okada,” Andy Chang, chief marketing officer for gaming told AGB in a recent interview. The effort to paint Manila purple on billboards, highways ads and in all major locations that began in October was to reflect Okada’s corporate colours. “It’s all a kind of brand building,” he said.

The resort will feature two Y-shaped hotel towers with a total of 993 rooms, a 37,464 square-meter dancing fountain, a casino floor with about 500 table games and 3,000 electronic gaming machines, a 90,000 square-feet nightclub and beach club entertainment complex. It will also have an 8,409 square-meter retail promenade, a world-class spa and 21 self-operated restaurants for casual, buffet, and international dining.

Although concerns have been raised about Entertainment City’s capacity to support so many large resorts, the latest figures from market regulator, the Philippine Amusement and Gaming Corp., have been positive. Overall gross gambling revenue in the Philippines was up 11.2 percent in 3Q, with figures from the three casinos in the capital showing a surge of about 20 percent. However, the political outlook in the country has become murkier since the election of hardline President Rodrigo Duterte in May, who has already launched and then partially revoked a crackdown on online gaming.

Chang, who was formerly executive vice-president at Singapore’s Resorts World Sentosa, and involved in the pre-openings of the Wynn Las Vegas and Wynn Macau, said what will differentiate Okada Manila will be standards of service. He dismissed concerns that the resort, unlike its rivals City of Dreams Manila and Resorts World Manila, doesn’t have an existing client database to build on.

“I am going to focus on service. I built the whole Wynn experience in Macau. I have to duplicate that and make it better,” he said.

“We will open our door and everyone will give us a shot. They will come and they will see the difference. I will not buy the market. I do not believe in buying the market. I never offer more than the competition, actually I offer a little less.”

Although the resort will cater for all sectors, Chang said the local mass market will be particularly important, making up about 75 percent to 80 percent of the total. It does plan however to work with a few select junket operators.

“Our philosophy will be to keep it very straight forward. We will have the best junkets. We will not have 30 to 40 junkets. Just the top end and we will make sure there is no overlap in individual markets.”

On the gaming floor, the group will use proprietary technology to set it apart from its competition.

“We will try to create a different impression. We will make the game more secure. The player will get a better feeling as our technology will be more advanced than the others. Just give us time. We feel good about the project.”

Although a smaller percentage of the market, revenue from junket play was up 20.5 percent in Entertainment City, compared with a 12.4 percent gain in mass play in 3Q. Part of the reason analysts have been positive about the Philippine market has been the lack of restrictions on locals gambling, providing a cushion against the more volatile revenue stream from high rollers, in particular those from China.

The country has a population of more than 98 million, with gross domestic product growth in 3Q of 7.1 percent, making it the fastest expanding economy in Asia. The Asian Development Bank predicts GDP growth of 6 percent in 2016 and 6.1 percent in 2017 driven by domestic consumption and infrastructure spending.

Although Duterte has made it clear he won’t tolerate online gambling targeting locals, so far his comments have not extended to casinos.

Commenting on the new resort, Joe Pisano, CEO of Jade Entertainment and Gaming Technologies, said the property is likely to draw tourists to the capital.

“Any dilution in the local market will be offset by the increase in tourism the the property will bring. Now with 3 properties as well as the opening of the skyway from the airport, Entertainment City is starting to take shape. With the continued improvements in Infrastructure we will see growth in the area.”

Although officials are optimistic about the resort’s prospects, its road to completion has not been without its road bumps. The property was scheduled to be finished in March of last year, but missed that deadline, prompting Pagcor to seize a $2.2 million performance bond.

The regulator subsequently granted the company a deadline until the end of this year to wrap up the project. Part of the issue behind the construction delays was a problem over ownership of the actual land, with Philippine rules stipulating that locals must own at least 60 percent.

A venture with local property developer Century Properties unravelled with the Philippine company taking the operator to court. The case was settled in May last year. Tiger finally reached an accord with All Seasons Hotels and Resorts, a local company controlled by Antonio Cojuangco, to return to compliance with the land ownership regulations allowing the project to move forward.

Parent company Universal has also been embroiled in legal battles and recently lost a defamation suit against the Reuters news agency over allegations of bribery related to the Philippine operations.

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

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