South Korea’s Kangwon Land casino shrugged off last year’s market struggles to once again outperform its domestic competitors.
Kangwon Land, the only one of South Korea’s 17 casinos that local residents are allowed to access, reported revenue up 8.6% to KRW 406b (US $329.6m) in the three months ending Dec. 31.
Operating income improved a more modest 0.8% to KRW 120b, reflecting higher labor costs and increased contributions to a fund related to the region’s former coalmine, the closure of which devastated the local economy and prompted the decision to open the resort 16 years ago.
Kangwon Land’s Q4 profits nearly doubled to KRW 93b, in part due to a favorable comparison with Q4 2014, during which the operator was saddled with a one-off non-operating expense.
Daiwa analyst Thomas Kwon said Kangwon Land was firing on all cylinders in Q4, with VIP revenue up 3.6% and mass tables improving 9.7%. The most surprising stat came from the casino’s slots revenue, which rose 15.2% to KRW 144b, representing over one-third of the casino’s total take.
For the year as a whole, Kangwon Land’s revenue rose 9.2% to KRW 1.63t ($1.3b) while net income increased nearly 23% to KRW 441.6b. Daiwa expects the property’s revenue will rise a further 9% in 2016 thanks to Kangwon Land’s ongoing efforts to add more gaming tables, replace old slots and boost staffing levels.
South Korea’s other major casino operators didn’t fare nearly as well in 2015, with both Paradise Co Ltd and Grand Korea Leisure reporting double-digit drops due to their forced reliance on international tourists. The country’s tourism industry was doubly slammed last year due to a deadly viral outbreak and Chinese authorities clamping down on South Korean gambling tour operators.
South Korea’s government is attempting to revive its tourism industry by pitching the country as a prime hub for meetings, incentives, conventions and exhibitions (MICE). Kangwon Land, which has a full slate of resort options, including skiing, is fully embracing this effort. The property is hosting two Thai corporate incentive groups this month, with the two companies bringing a total of 1,300 guests between them, many of whom don’t get to see a whole lot of snow back home.
