South Korea’s Paradise City may face hard yards due to a ban on Chinese tour groups to the country, notes Bloomberg Intelligence analyst Margaret Huang in a report earlier this month.
“The $1.1 billion, mass-market oriented property had hoped to capture Chinese visitors with a Korean culture theme… Yet the travel ban is likely to weigh on revenue and profit,” said Huang.
The integrated resort held its grand opening in Yeongjongdo last Thursday, with beginnings tracing back to 2011 through a joint venture between Paradise Co. and Sega Sammy Holdings Inc.
The project is located at the International Business Center (IBC-1 Phase 2) Area of Incheon International Airport, and is around 40 minutes drive west of the country’s capital.
While analysts expressed concern about the prospects for the South Korean market given China's crackdown on marketing to its citizens and some travel restrictions, Shin Im-chul, the marketing director for Paradise Sega Sammy, dismissed those concerns.
Cited by local media, he said “the target VIP visitors from China are not affected by the Chinese travel ban because they do not travel with big tourist groups, meaning that we will be less affected by the conflict compared to other industries such as the duty-free industry.”
Huang argued however that given the foreigner-only stipulation affecting the resort, it is “unlikely to be able to offset sales declines from fewer Chinese tourists.”
“Visitors from China made up of 50 percent of South Korea’s 2015 visitor arrivals,” she explained.
The effects of this will likely trickle to all three of the country’s casino operators, said Huang, which includes Paradise, Grand Korea Leisure and Kangwon Land.
Market challenges may also lead to delayed openings for Caesars and Mohegan Sun’s projects, she added.
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