Tourism is
a major economic player and job creator in many developing countries including in
Southeast Asia. The region places next to China as being the most dynamic and
fastest-growing area in the world, as it offers thousands of beach
resorts, mountain resorts, and city centers that cater to visitors from other
countries.
The main destinations
for foreigners visiting East Asia are
China, Thailand, Malaysia, Hong Kong, and Macau, which is especially interesting
because while its visitor-arrivals in 2013 was only one-quarter of that seen on
mainland China, its tourism receipts were similar to those from the entire
country.
Table 1.
What
explains for such enormous tourism receipts from Macau? It is, of course gaming
and casino tourism. Macau is No 1 on the planet in gaming revenues. In 2013 it reaped
US$45.1 billion, followed by Las Vegas with US$6.5 billion; Singapore with
US$6.1 billion; Atlantic City at US$2.9 billion; and the Philippines, which
took in US$2.2 billion.
It is only
logical then, that other Asian economies seek to duplicate the fantastic performance
of gaming and casino tourism in Macau, and have launched various casino projects.
Among them, according to Asia Awakens: The Growth of Casino Tourism, are the
following:
·
Singapore’s
integrated resorts in Marina Bay and Sentosa Island, with a combined value of
approximately US$9 billion.
·
Philippines’integrated
resort project, Entertainment City at Manila Bay, with a projected value of
US$15 billion.
·
Vietnam’s
integrated resort projects in Ho Tram, Danang and Phu Quoc, each involving
investments of more than US$4.5 billion.
·
Cambodia’s projects in Koh Rong island, costing
some US$2 billion, along with an integrated resort at Angkor Wat.
·
Malaysia’s Resorts World.
·
South Korea’s integrated resort
development in Jejuisland, valued at some US$3.6 billion.
These casino developments are evidence of the dynamic and growing
competition among countries in the Asean region, as well as in the gaming
tourism sector.
However, one only has to look at the Las Vegas model, being a
once-derelict patch of dry land that has become a multi-faceted entertainment venue
centered upon frivolity. It is crucial to note that Las Vegas has never depended
entirely upon casinos to bring the cash in.
According to the World Trade and Tourism Council, the city’s
Disney-style hotels, boasting some 133.000 rooms, along with attractions, shows
and recreational activities, account for half of the casinos’ revenue streams,
meaning that wider tourism development and casino construction merely go hand-in-hand
with one another.
Meanwhile, in the Philippines, the biggest player is the
government-owned Philippine Amusement and Gaming Corporation with its dozen-plus casinos in
Metro Manila and other major cities throughout the country.
But the
country’s much-recognized and largest project is “Entertainment City” in Manila Bay, a
huge 120 hectare development built on reclaimed land and hosting four huge licensees.
Table 2.
Resorts
World Manila is the sister company of Resorts World Genting, Malaysia, and
Resorts World Sentosa, Singapore. From 2009 to 2013, it was the only casino
resort in Metro Manila, until the opening of Solaire Resort and Casino.
Solaire is
a new and large project by billionaire Enrique Razon, owner of International Container
Terminal Services, Inc, which moves ships and cargo to 19 countries throughout
the world. The resort includes a five-star hotel with 500 rooms and 1,000-seat
ballroom.
City of
Dreams casino held a soft opening last December, then a grand opening on Feb 2.
The casino is a joint venture between Henry Sy, the Philippines’ richest
family, Australian billionaire James Packer, and Lawrence Ho, Co-Chairman and
Chief Executive Officer of Melco Crown Entertainment, and son of Macau casino
mogul Stanley Ho.
Melco
Crown Philippines Resorts Corporation President Clarence Chung said the new casino will
provide additional choices for their customer base in Macau.
COD has
three hotels: Crown Towers, Nobu and Hyatt. It is said to have attracted some
60,000 visitors during its soft opening last December, and since then has
averaged 15,000 daily visitors.
The Manila
Bay Resorts is owned by Japanese billionaire Kazuo Okada.
With these
four resorts and casinos, the Philippines’ gaming sector is projected
to earn
big, increasing from US$2 billion in 2012 to US$4 billion by 2016.
Table 3.
Sources: 2009-2013 actual, PAGCOR; 2014-2017 Forecast, The Innovation Group.
Regarding
area infrastructure, there is ongoing large-scale skyway construction that
connects Manila’s four airport terminals to Entertainment City. When this
project is completed in 2016, it will drastically cut the travel time for
visitors, local and foreign, from the airport to the resort-casinos.
But how do
most Filipinos view these foreign gamblers and visitors? Generally, their opinions
range from neutral to positive. Foreign gamblers do nothing to harm local
residents, instead they just spend and spend, winning money if they are lucky,
and in the process they provide lots of jobs and lots of tips to Filipino resort
employees, officers and entertainers. Direct hires are about 5,000 jobs per casino; hotel rooms supply are expanded.
Other
sectors, of course, will complain that the gambling and casino culture could permeate
many Filipinos’ lives, as people seek to get rich-quick. Yet, this is not a
strong argument because there are many types of gambling that Filipinos are now
engaged in, from ordinary card games to bingo for charity, as well as the lotto
and sweepstakes, and even cockfighting.
On the
other hand, the government should see the enormous opportunities in the
resorts-hotels-casino sector. There is no doubt that casinos need to always be
considered in the wider tourism context—as better infrastructure leading into a
casino will inevitably allow the casino to have a more positive impact on a
region.
It is also
a large job creator, from airlines to hotels, restaurants and entertainment, and
can even evolve into medical tourism.
The
government, in the meantime, collects taxes from 5%-17% based on GGR. Staring
last year, casinos also pay corporate income tax.
It is
therefore commended that the high taxes that actually also hound many other local
businesses is slashed. At the end of the day, when people have high-paying and stable
jobs, they become less dependent upon various government welfare and subsidy programs.
--------------
ASEAN Voices 2: PH Multinationals in the Region, February 01, 2015
Privatization 9: PAGCOR and Casino Operations, May 16, 2012
Fat-Free Econ 12: Privatizing PAGCOR, June 08, 2012
Privatization 10: More on Selling PAGCOR, June 12, 2012
