IAG DECEMBER 2016 WEB - page 10

Cover Story
the basic roads as well as the air and rail services. Can you run a
successful operation?Can youmakeenoughmoney tocover thecost
of your investment while the country is going through that process?
“And howmuch money are you going to have to invest on the
front end? I think it is a killer inmany jurisdictions where new laws
are passed and the government tries to implement a minimum
investment – US$1 billion or whatever it might be. Quite honestly,
that may take a significant amount of time to recover if you can
recover it at all…and if youare inanenvironmentwithsomepolitical
uncertainty that canbe adangerous game toplay.”
A case in point is Ho Tram Resort Casino in Vietnam – the first
integrated resort to accept the government’s terms of a minimum
US$4billion investment inorder tobe granted a casino license.
The first phase, opened in2013, costUS$600million andboasts
a five-star, 550-room hotel and Greg Norman designed golf course,
while the upcoming second tower, due for completion in late 2017,
will bring the total number of rooms to 1,100 and push expenditure
overUS$1 billion.
But Ho Tram was a gamble predicated on the expectation that
Vietnam was close to overturning its ban on locals gambling. That
gamble appears tohave backfired.
InSeptember, the government finally agreed to let locals gamble
in two Vietnamese casinos on a trial basis for three years – andHo
Tram isn’t one of them. Instead, new resorts in the VonDon Special
EconomicZone in thenorthand inPhuQuoc Island in the southwill
be the ones to benefit – themain stipulation being that localsmust
pay adaily feeofUS$50 toenter or buy amonthlypass forUS$1,100.
It is believedHo Trammissed out because the government sees
it as better suited to tourists – the irony being that getting there
requires a flight into Ho Chi Minh City then a two-and-a-half hour
drive to the coast.Hardly an appealingprospect for visitors.
“Oneof thefirst thingsanyoperatormust lookat is infrastructure
and ease of access because you know from every piece of research
on consumers around Asia, convenience is critical for any form
of integrated resort,” says Galaxy Macau Chief Marketing Officer
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