Anticipation was in the Philippine air on Wednesday as Bloomberry Resorts held a press briefing to confirm that its Solaire Resort & Casino was on track to meet its March 2013 opening date. Solaire, the first of four gaming operations planned for Manila’s Entertainment City mega-project, says its first phase will comprise a 500-room five-star hotel, 15 dining options, four ‘signature restaurants’ and 18,500-square-meters worth of gaming floor featuring 1,200 slots, 300 gaming tables and plenty of VIP salons.
Solaire’s first phase is expected to cost $750m to construct, while an extension of phase one – comprising 300 more hotel rooms, retail operations, a night club, and an 1,800-seat theater – will add “significantly in excess” of $250m to the price tag by the time it’s completed in 2014. The combined operation will occupy half of Bloomberry’s 16-hectare property within the 120-hectare Entertainment City. When completed, the Solaire project will have created around 4,600 jobs. Malaya.com reported that the resort has already hired or made offers to 2,400 employees – 8% of which are Filipino ex-pats with experience working in the region’s other major gaming centers (Macau, Singapore) that the company has convinced to return and work their casino floor magic on home soil.
Bradley Stone, president of Global Gaming Asset Management (GGAM), the Nevada-based equity partner brought in to handle Solaire’s gaming operations, said he expects foot traffic to range between 5k-10k per day. Business Mirror quoted Stone saying that if Solaire can lure away 6-7% of Macau’s market by the end of 2013, it will have pulled off quite a coup. Working in Stone’s favor is the Philippines’ favorable tax rate on gaming by foreigners (15% v. 39% in Macau), which will allow Entertainment City operators like Solaire the ability to offer more significant rebates for junkets.
Stone also revealed that Solaire’s strategy for success lay in aggressively pursuing Asia’s lucrative high-roller market. By 2014, Stone hopes Solaire’s revenue mix will “normalize” at a ratio of 55% premium mass market and high-end local gamblers to 45% VIPs. To lure the whales, Stone says Solaire won’t be skimpy with the perks, including private jets that will land VIPs at a hangar owned by Bloomberry boss (and third richest man in the Philippines) Enrique Razon Jr., after which the VIPs will be transported to Solaire via helicopter.
All well and good, but Stone is likely all too aware of the recent news that Macau’s vaunted VIP market shrunk in Q3 to its lowest level in five quarters. The VIP baccarat revenue tally has now decreased for three sequential quarters, suggesting Asia’s supply of whales is perhaps not inexhaustible. Macau’s VIPs now account for 68.6% of the city’s gaming revenue – the first time in three years that number has dipped below 70%. While this VIP slowdown has been partially offset by a strong showing in the mass market segment, all Asia’s major casino operators will likely be devoting a great deal of time to whale-watching in the coming months.
