Competition is heating up for revenue at casinos for foreigners only. Paradise City, a resort complex on Yeongjong Island in Incheon, had maintained the No. 1 spot in revenue among Korea's foreigners-only casinos in the past, but in the second half of last year it ceded the lead to the Jeju Dream Tower casino of Lotte Tour Development, which drew a large influx of Chinese tourists.
According to the hotel and resort industry on the 22nd, Paradise City plans to open the Hyatt Regency Incheon Paradise City in March, a rebranding of the Grand Hyatt Incheon West Tower. Paradise Sega Sammy, the operator of Paradise City, acquired the hotel from Kal Hotel Network, an affiliate of Hanjin Group, for 210 billion won in September last year and is currently carrying out interior repairs and environmental improvement work.
The newly opening Hyatt Regency Incheon Paradise City sits on a site of about 16,000㎡ and has 501 rooms. With this acquisition, Paradise City will add to the existing main hotel and the luxury boutique hotel Art Paradiso, which together have 769 rooms, bringing the total to 1,270 rooms, a large-scale inventory.
Paradise City and the Hyatt are a five-minute walk apart. Guests at the Hyatt will also be able to use Paradise City's casino, performance and exhibition venues, the restaurant plaza, and the Wonderbox theme park.
Paradise City is aiming to boost casino revenue on the back of the Hyatt acquisition. Resorts that operate casinos typically conduct sales activities by offering comp (free) rooms to casino patrons. The longer patrons stay at the resort, the longer they remain at the casino tables, and the drop amount (the expense used to purchase chips) rises, leading to improvements in revenue and operating profit.
The casino is the core business, accounting for 70% to 80% of Paradise City's total revenue. Paradise City had maintained the top spot in revenue among Korea's foreigners-only casinos. However, it yielded No. 1 to the Jeju Dream Tower casino starting in the second half of last year.
In the first half of last year, Paradise City casino's net revenue was 239.3 billion won, more than 40 billion won higher than Jeju Dream Tower casino's 194.5 billion won. But in the second half, Jeju Dream Tower posted 282 billion won in net revenue, while Paradise City came in at 241.5 billion won.
That was thanks to Jeju Dream Tower casino actively attracting the sharply increased number of Chinese tourists starting in the second half of last year. Under the Jeju Special Law, Chinese tourists can currently stay on Jeju Island for 30 days without a visa.
Paradise City did not see major benefits even after visa-free entry for Chinese tour groups began in September last year. Paradise City has operated its casino mainly for Chinese and Japanese VIP customers, but a shortage of comp rooms has limited its ability to attract tourists. As a result, Chinese tour groups who visited Incheon for casino trips concentrated at Inspire Resort, which has 1,275 rooms.
However, the Hyatt acquisition will significantly increase Paradise's room count, easing these constraints. Kim Yu-hyeok, an analyst at IBK Securities, said, "When the Hyatt Regency opens, comp rooms will increase from 150 to 650, and we can expect improved results from higher per-capita drop amounts."
A Paradise official said, "With this Hyatt acquisition, we now have the capacity to attract not only existing VIPs but also mass customers (one-off casino visitors)," adding, "If visa-free entry for individual Chinese tourists is expanded nationwide following the lifting of the ban on the Korean wave, additional benefits are expected."