Inside Asian Gaming

inside asian gaming April 2015 28 exempting them from visas needed to visit other parts of the country. The Wall Street Journal quotes Willa Wu, a Hangzhou, China, businesswoman who has traveled to Jeju several times, as saying: “The major reason for most people to travel to Jeju is that it’s visa- free. And the price for group travel is so cheap.” Jeju is a one-hour flight from Shanghai and two-and-a-half hours from Beijing. The number of Chinese visitors to the island jumped 58% to 2.9 million last year, almost half the 6.1 million Chinese visitors who descended on South Korea last year. In another move to jump-start the local economy, local authorities eased investment rules in February 2010, giving permanent residency to foreigners who purchase property worth at least 500 million won ($460,000) in designated districts and who keep them for five years. Since the introduction of the program, more than 1,000 foreigners have used it to apply for residency status, of whom 98% were Chinese nationals. “Rising tourists and investment from China are helping us raise tax revenue and enhance Jeju’s brand as a global resort destination,” says Kim Nam-sun, a director at the Jeju provincial government. Union Gaming Research Macau analyst Grant Govertsen is particularly bullish on Jeju’s prospects. He believes the island might even be a better bet for integrated resort developers than Incheon. “This is not to say that we don’t believe a foreigner-only IR in the greater Seoul (e.g. Incheon) area can’t be successful,” he notes. “However, we feel that the edge might belong to Jeju in the context of it likely being a limited license environment with superior access to Chinese—despite the fact that there are currently eight (very small) casinos in operation.” Mr Govertsen estimates Resorts World Jeju’s total development cost could be as much as US$1.8 billion, “of which half would, in theory, be attributable to Genting.” He adds, though, that “the net cash cost to Genting could be minimum per management commentary that much of the project cost is expected to be brought down via residential [property] sales.” The ability to offset some of the investment outlay on Resorts World Jeju through sales of residential properties offers Genting an opportunity to improve the project’s risk/reward profile—an opportunity the developers of multi-billion dollar casinos in Macau’s Cotai resort district have thus far been unable to avail themselves of. LOSS OF EXCLUSIVITY Global names of the likes of Las Vegas Sands are also taking a hard look at developing integrated resorts in South Korea, albeit with reservations about the prohibition on domestic play. It’s a valid Jeju has been particularly welcoming to Chinese visitors, exempting them from visas needed to visit other parts of the country. There’s potential for the popular holiday island to surprise on the upside. Cover Story