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Integrated resort sector feared to be overcrowded
Scholars discuss the future of Korea’s integrated resort industry during a seminar at the National Assembly building in Yeouido, Tuesday. They urged the government not to issue more licenses for foreigner-only casino-led comprehensive resorts, expressing concerns of oversupply. / Courtesy of Paradise Group
By Lee Hyo-sik
Gov’t urged not to issue more licenses for foreigner-only casinos
By Lee Hyo-sik
A group of scholars are calling on the government to refrain from issuing more licenses for integrated resort complexes, which cater to Chinese and other foreign visitors.
Citing their latest research, the scholars say three foreigner-only, casino-driven resorts -- two in the Seoul metropolitan area and one elsewhere -- will be enough in Korea to accommodate non-Korean travelers seeking to gamble, shop and use other leisure facilities here.
This counters the government’s plan to select two more entities in February next year, allowing them to construct and run casinos and other facilities inside integrated resorts in Seoul and other locations. As of now, six companies are competing to win licenses.
The government already issued a license to LOCZ Korea and one to Paradise.
LOCZ Korea, a Chinese-U.S. consortium of Lippo and Caesars Entertainment, won approval to open a foreigners-only casino resort by 2018 in Midan City on Yeongjongdo Island. Paradise, Korea’s largest operator of foreigner-only casinos, is building the casino complex, Paradise City, near Incheon International Airport.
In a seminar on Tuesay, Prof. Pyo Hak-gil of Seoul National University said there should be no more than two comprehensive resorts in Seoul and Gyeonggi Province, and one in the provincial area. Korea’s casino industry would be adversely affected if more foreigner-only casinos open, he said.
According to Pyo’s research, the number of Chinese and other foreign tourists visiting casino-driven integrated resorts in the Seoul metropolitan area is estimated to reach 1.08 million in 2020, unchanged from 2019 and 2018. The resort to be built in one of the provincial areas is expected to attract 423,176 in 2019 and 423,451 in 2020.
“In 2018, LOCZ Korea and Paradise open their respective comprehensive resorts. So if more foreigner-only casinos are allowed to open, this will lead to an excessive supply as the number of foreign visitors stagnates,” Pyo said. “If unforeseen factors, such as the Middle East Respiratory Syndrome (MERS) outbreak, occur and discourage Chinese tourists from coming to Korea, it will wreak havoc on the local casinos and other hospitality-related businesses.”
The professor said Korea needs to refrain from expanding casinos and instead mobilize more resources to improve other tourism infrastructure.
“Foreign investors, which have expressed interest in building integrated resorts, are only interested in building and operating casinos for Chinese and Korean gamblers,” Pyo said. “The government should push ahead with projects aimed at upgrading the country’s overall tourism-related infrastructure and foster tourist attractions in provincial areas.”