How Mohegan Inspire will transform Korea's tourism landscape
This is the last in a series of contribution pieces to highlight the opportunities and challenges of integrated resorts and help Korea to better cope with heated competition among Asian countries to attract more international tourists and revitalize the economy. – ED.
Mohegan Inspire Entertainment Resort, developed with 100 percent investment by Mohegan, an American company operating top-notch entertainment resorts worldwide, including in the Americas and Northeast Asia, celebrated a grand opening with the completion of its first phase of construction in March.
The integrated resort, located in the International Business Center III (IBC-III), 10 minutes away from Incheon International Airport, boasts a first-phase development area of about 462,000 square meters, more than twice the size of Seoul World Cup Stadium. The total project cost for the development of the first phase is close to 2 trillion won, including 960 billion won in foreign direct investment.
The Inspire resort is an integrated resort that includes a foreigner-only casino, but it’s necessary to pay attention to non-gaming facilities. Its non-gaming facilities include three hotel towers with 1,275 rooms designed with different concepts themed with motifs from the beautiful nature of Yeongjong Island and Yongyu Island in Incheon; Inspire Arena with 15,000 seats, Korea’s first indoor multi-purpose performance hall; Splash Bay, a multi-purpose indoor water park with the size of 9,500 square meters, and other outdoor attractions; MICE (meetings, incentives, conferences and exhibitions) facilities with state-of-the-art equipment, including Korea’s largest convention center; a world-class shopping center combining entertainment; a digital shopping street and media art exhibition hall implemented with the latest IT and digital technologies; and multinational dining facilities.
A digital show featuring sea life is displayed at Mohegan Inspire Entertainment Resort's Aurora, a 150-meter-long immersive digital entertainment street with giant LED screens, on Incheon's Yeongjong Island, May 2. Korea Times photo by Choi Hyung-bin
Inspire Arena, in particular, is an international performance hall equipped with a world-class sound system and is expected to serve as a global hub that promotes K-culture, which is in its heyday. Various non-gaming facilities can be used by domestic tourists as well as foreign travelers, which will play a great role in boosting domestic tourism.
The opening of the Inspire resort is expected to contribute to the local economy by prompting direct economic contributions such as job creation for about 3,000 people, tourism promotion funds worth 200 billion won over the next five years and increased tax revenue of 80 billion won and triggering economic ripple effects such as production worth 13 trillion won, added value worth 5 trillion won and 130,000 jobs.
Ultimately, the mega resort is expected to play a pivotal role in Korea’s tourism industry in the future in that it is the first entertainment-type resort in Korea equipped with specialized performance venues and complex cultural facilities. It will also play an important role in attracting 20 million foreign tourists and achieving $24.5 billion in tourism revenue, the national tourism innovation goals in 2024, and boosting the qualitative growth of the tourism industry.
An entrance to the hotel tower of Inspire Entertainment Resort in Incheon / Courtesy of Inspire Entertainment Resort
Meanwhile, the domestic casino industry has been recovering steadily since the end of the COVID-19 pandemic. Paradise and Jeju Dream Tower are renewing their quarterly results, while most other casinos are recovering slowly.
This is attributed to the fact that the number of Chinese visitors has not recovered to the previous level as well as to China’s regulatory policies, such as the ban on junkets. On top of that, Korean casinos remain less competitive compared to other new integrated resorts in Asia in terms of attractiveness such as the size and level of facilities, lack of employees, geographical factors and connected tour programs.
Against this backdrop, Asia’s leading tourism countries such as Japan and Thailand have determined the introduction of casinos, while casino leaders in Asia such as Singapore, Macao and the Philippines are expanding their integrated resorts through continuous investment.
Singapore’s Marina Bay Sands is speeding up the construction of its fourth tower that was suspended owing to COVID-19, and Macao’s casino revenue is growing again after experiencing a marked drop due to the pandemic and China’s regulation of junkets. Macao is attempting rebound through continuous investment and development by shifting from focusing on VIP customers through junkets in the past to attracting “premium mass-market players” or from focusing on casino facilities to expanding investment in entertainment facilities.
Marina Bay Sands integrated resorts in Singapore / Courtesy of Singapore Tourism Board
The integrated resort Japan is creating in Osaka will introduce an open casino open to local citizens, which will be equipped with three luxury hotels (2,500 rooms), a convention center (100,000 square meters), a multi-purpose performance hall (35,000 seats) and shopping and culture and leisure facilities. The resort will create approximately 200,000 jobs and trigger an economic effect of about 1 trillion yen (approximately 10 trillion won) a year in Osaka and nearby areas, and Osaka City will generate annual tax revenue of about 100 billion yen (1 trillion won) by attracting 20 million visitors, including 6 million foreign tourists, according to press reports.
Thailand also recently decided to develop five to eight large integrated resorts by 2029 in accordance with its plan to attract up to 30 trillion won in investment. As global companies such as Sands and MGM show great interest in the plan, Thailand expects an additional $12 billion in tourism revenue a year.
If Asian countries expand their integrated resorts as such, it’s apparent that competition will intensify and demand will shift significantly in the tourism industry across the board such as MICE, shopping and culture and leisure as well as in casinos.
Casino management and supervision agencies play the role of presenting and managing global standards aimed at sharpening casinos’ competitiveness in various aspects, including accounting, surveillance, game operation, joint marketing and employee education, in addition to the role of reducing the casino industry’s negative social impact. So, most countries with casinos are operating specialized management and supervision agencies.
Given all these circumstances, two major policies can be proposed as priorities for Korea’s casino industry.
First, it’s necessary to support casino operators so that they can improve the level of facilities and services needed to remain internationally competitive. These measures include deregulation necessary for facility improvement, better services and support for attracting customers. For example, foreigner-only casinos need credit-related deregulation necessary for strengthening competitiveness in attracting customers from abroad, and Kangwon Land urgently needs to expand its operating places and improve its environment in order to compete against the integrated resort in Osaka.
Second, it’s necessary to establish a specialized institution that can manage and supervise the domestic casino industry comprehensively. Given the nature of the casino industry, professional manpower is needed. Foreigner-only casinos, in particular, need continuous management and support policies based on mid- to long-term development plans, just like the tourism industry.
To sum up, in the Asian tourism and casino market where competition is intensifying, it’s necessary to seek a strategy to nurture foreigner-only casinos and integrated resorts as major tourism attractions and utilize them as the key driving force in attracting tourists.
The main entrance to Mohegan Inspire Entertainment Resort on Incheon's Yeongjong Island / Courtesy of Inspire Entertainment Resort
It’s also necessary to consider the policy stance of nurturing and supporting foreigner-only casinos at the national level for increased global competitiveness by seeing them as tourism content to attract tourists and expand tourism revenue rather than viewing them by the standard of the gambling industry.
This calls for prioritizing the establishment of precise legal guidelines that reflect the characteristics of various casino types by integrating casino-related laws and regulations scattered in the Tourism Promotion Act and various special laws and the creation of an organization exclusively for casino affairs consisting of experts who will perform management, supervision and support functions appropriate for each casino.
Promoting policies aimed at nurturing the transparent and sustainable casino industry based on the integrated casino law and a dedicated casino organization is ultimately a way to contribute to improving the global competitiveness of the tourism industry.
Seo Won-seok is a professor at the College of Hotel & Tourism Management, Kyung Hee University.