2015: Year of the Tiger?

Following Resorts World Manila and Solaire is no easy feat, but Tiger Resort is bringing something truly different to the world of casinos. Catering to both mass market and high-rollers, with a wellness and anti-aging clinic within its walls and an indoor beach experience, it’s shaping up to be something special. Matt Hurst told CI about this exceptional development.

Casino International: What’s the market like in the Philippines? Is it a mature market?
Matt Hurst: It’s an interesting market because it was run by PAGCOR until 2009 when Resorts World got in there. It was basically government-owned, -operated and –regulated. They’ve sort of seen the light with the Macaus and Singapores of the world and thought they would open up the industry to outside operators; Resorts World came in and three other licenses were awarded too. Resorts World did what they do well and raised the bar, and they have been quite successful. Solaire has opened up and grown the market, which is a real positive, and City of Dreams opened very recently too. It’s going to be interesting to see what happens in terms of growth and cannibalisation in the domestic market, but at the end of the day the future is looking toward the international market. 
The domestic market will grow, and the highway infrastructure, better products on offer, the critical mass of the clustering of the resorts in Entertainment City will all help grow the domestic market, but the key to future growth is the international market. City of Dreams will be interesting as they are an international operator. 
Entertainment City is all reclaimed land in Manila Bay, and there is a lot left for development. 100 hectares has been designated for Entertainment City; Resorts World has just announced they are going ahead, with Bayshore, to finish in 2017 so all four operators will be in that area. Tiger has 44 hectares to develop, the largest land bank by far.

CI: Is the PAGCOR setup still in place?
MH: It is, they have several casinos regionally but they are going through the process of shutting down the ones around Manila. 

CI: Many countries have invited foreign gaming investment but have enforced rules against locals gambling; what are the rules in the Philippines?
MH: As long as you are old enough to gamble, there are no rules to stop locals coming to play. 
Filipinos seem to be quite avid gamblers. Cockfighting is, for example, a large part of Filipino culture. Gambling is not an alien concept to them. 

CI: Filipinos must be familiar with the casino idea and a structured way to bet because of PAGCOR’s work over the years. Do you think that, with the casinos from outside investors, the improvement is within the hospitality and entertainment side, or are you offering something very different in gaming terms? 
MH: Across the board, yes. No question. If you go and look at some of the established casinos, there is not really any argument about whether the new properties are raising the bar substantially in terms of the gaming experience. There is the rest of it as well, of course – food and beverage, entertainment, spas, retail, the whole integrated resort complex is coming soon. I wouldn’t say Resorts World have done it, or Solaire, or that City of Dreams has either – but Solaire’s phase 1A is moving in that direction with retail, theatre, and certainly our property is going to be a truly integrated resort. We have phase 2, 75,000m2 of retail which is a really massive amount, 2,000 hotel rooms, spa facilities, a wellness clinic, 50 food and beverage outlets – it really is something that compares with the best in Asia. That will make a big difference to the domestic customers in terms of the whole entertainment experience. Right now, you can walk in to a dingy casino down the road and it’s not a special experience at all. The gaming side, the service experience, nothing special..

CI: If that has been the experience locally for some time, how will you re-educate that market? The first battle is to get them through the door, after all. 
MH: You obviously need a good marketing and advertising campaign. Marketing is not rocket science, though I don’t see a lot of people doing it really well. But in terms of giving people some anticipation and a sneak peek of what we are going to offer, we can do that through television, advertisements in magazines and newspapers, renderings if photographs are not yet ready, we can really show off that there is something special coming. And after Solaire, City of Dreams have opened, people have already started to get to grips with what Entertainment City is all about and certainly they will be expecting another step-up from us when we open after City of Dreams. I don’t think that’s the biggest challenge – I think in some ways people are a little intimidated by Solaire because it was so much nicer than everything else, so there is a double-edged sword on the other side of that coin. People went in thinking wow, this is too nice! Now they have adjusted to that and the Filipino people are starting to feel that yes, we deserve this, it should be nice for us. It’s going to be a spectacular, phenomenal resort. You’re not going to go to Macau and be amazed again, you won’t need to travel there to see something truly world class. 
Certainly we need to get it right, we need to get the brand position right, and to communicate it well and be consistent, but bigger challenges are getting our brand out there internationally not just domestically. 

CI: Singapore makes a lot of sense for a casino location because it’s a major hub for the region; Japan will be interesting if it opens up because it’s a destination rather than a stop. Is it the same for the Philippines, is it a waystation for anywhere?
MH: No, but then neither is Macau. People go to Macau to gamble, and it’s about as easy to get to Manila as it is to get to Macau if you’re travelling from Hong Kong. Certainly from Mainland China it’s similar, but once you get landing visas it’s going to be a hell of a lot easier than Macau, and that’s a considerable proposition. Right now with all of the restrictions on mainland Chinese going to Macau, you can get a domestic visa on a travel document that is like a domestic passport for travelling to Macau or Hong Kong. You can get one of those every six weeks at best which allows you to go for only five days now. You can get an onward ticket out of Macau to Bangkok, for example, which would allow you to stay for two weeks on the way out and two weeks on the way back so people would just travel on their regular passport, fly to Bangkok for the night, come back and stay for two more weeks. That was cut down to one week, and now it’s five days, then two days on the way back, so the restrictions are getting tighter and tighter. Certainly in Macau a come-as-you-wish policy would mean it was over-run with customers, so the central government has put those restrictions on for good reason. Manila, if you had landing visas, you can come and go as many times as you want, every weekend if it suits you. Stay for 30 days, that’s a phenomenal proposition for mainland Chinese. When that happens – and it is when, not if – it’s a real game-changer.

CI: When are you slated to open?
MH: Late 2015. 

CI: Who is behind the project?
MH: Our parent company is Universal Entertainment, which is Chairman Okada’s company in Japan. 

CI: What’s the overall offering?
MH: When we open phase one, we will have a casino with 500 tables and 3000 slots, 1000 hotel rooms, 7500m2 of high-end retail, about 49 outlets, around 25 food and beverage outlets, we will have a nightclub, a domed indoor beach club (which is the first of its kind that I know of), and a spa. The domed indoor beach club is in response to the unpredictable weather in the area, we get something like 30 typhoons a year in the country. It gives us an opportunity to guarantee people will experience something that will be unaffected by adverse weather conditions.
Phase two, perhaps a year later, will have another 1000 hotel rooms, 75000m2 of retail, a wellness and anti-aging clinic, another 25 food and beverage outlets… 
We’re talking about an entertainment centre, a shopping mall, theatre, perhaps even another hotel and high-end residential. We have many options on the table and it gives the chairman a great opportunity to adapt, learn and see how the market direction changes – then react accordingly. 

CI: That’s a lot of hotel rooms; who are the hotel customers going to be? Will there be a MICE offering, for example?
MH: Casino customers, hopefully. People might come from nearby cities to get away, will stay overnight or for the weekend. Manila’s MICE offering hasn’t taken off largely because of the real lack of hotel rooms in the city, but there are large conferences in the region now and people are struggling to get rooms. A number of hotels are being built right now, including a Conrad on the waterfront. The hotel industry is going well in the region. Yes, 2000 rooms is a lot, but with landing visas for Chinese we might need 3000. 

CI: How likely is the landing visas scenario? If for some reason it didn’t happen, how would your plans change?
MH: We plan for the worst and hope for the best. We aren’t banking on it and haven’t modelled it into anything, but we are preparing for it though, developing relationships with mainland travel agencies, looking at our advertising strategy, how we will get the brand into China.

CI: You mentioned a wellness clinic earlier – that sounds unusual. What’s the thinking behind that?
MH: Chairman Okada is keen on putting in a wellness and anti-aging clinic which is going to be a world-leader, and I think when you look at medical tourism and the smaller cosmetic surgeries that go on in Asia, Botox treatments and the like, it’s really growing. It is a global multi, multi-billion dollar industry and gives our VIPs a great excuse to bring wives and girlfriends to visit. It’s very visionary and nobody has talked about doing anything like it before. 

CI: Do you see this as a mass-market property rather than just looking for the bigger fish? 
MH: We have a two-pronged strategy, one for the mass-market and one for the high-end. We are trying to be both the Venetian and the Wynn of Macau at the same time, but in different parts of the property. 80% of our revenue is going to come from 20% of our customers, so that’s where the money is, but you need a casino that’s busy and full because people want to be somewhere there is action and things are happening, so we need to also focus on the bread-and-butter, mass side of things too. I wouldn’t say we are a mass-market property as such, we are going to be very high-end in terms of finish and design, it’s not just going to be a box – but that real money is at the high end.