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Manila’s Gaming Push Aiming to Induce Tourism Demand To The Country

MANILA, PHILIPPINES – Manila’s tourism market is taking a decided turn away from a vanilla offering to boost visitor numbers. This South East Asian casino dreamscape is setting up a battle between established gaming giants and independent operators in a high stakes contest of win or lose.

Turning back the calendar as recently as 2007 and the number was just under 40,000, with airlift is a key catalyst with surging numbers of direct flights between Phuket and Mainland cities, which now stands at 22 versus only seven only five years ago.

Malaysia’s Resorts World integrated resort at Newport City was the first to break the ice with a mix of in house hotel brands and one international managed property under Marriott. Ultimately reality has bitten as accommodation demand in the domestic and overseas corporate sector has far outpaced gaming generated room nights.

According to hospitality consulting firm C9 Hotelworks newly released Manila Hotel Update the current conundrum facing the sector is that a massive pipeline of incoming mega hotel projects at PAGCOR Entertainment City and Resorts World are likely to cannibalize the existing industry’s leading market source which is domestically generated business.

To download the report in full, please click here.

A prime example of the trend has been demonstrated at the much-touted Solaire project which has seen a strong shift away from gaming guests and is now tracking market share growth with MICE (meetings, incentives, conference and exhibitions) and Corporate visitors becoming the dominant end users. This has resulted in downward pressure on room rates on the broader set of Manila Bay area hotels.

C9’s Managing Director Bill Barnett commented “hotel gaming properties which have established connections to foreign visitors such as Resorts World in Malaysia and Singapore and the City of Dreams from Macau work in strong fundamentals.

“They have a database of existing regional clients who have credit lines which can be extended to the new Philippine properties. Freestanding operations such as Solaire and the upcoming Okada project are likely to be challenged to draw overseas guests to their properties.”

Resorts World has continued to play in multiple segments with large-scale expansion underway at the Marriott which will add 228 new rooms by Q4 of 2015. Two other branded hotels by Hilton and Sheraton are coming up in the same complex together with 9,000 square meters of meeting space.

Looking beyond the numbers the Newport City development with its close proximity to the various components of Ninoy Aquino International Airport and bolstered by Manila’s worsening traffic problems become a keen competitor to Makati’s CBD which thrives on business travelers.

Barnett adds “transportation plays a key catalyst in destination resort trading as you can’t stay there if you can’t get there. The Philippines gaming induced strategy is highly focused on two key markets – China and Korea. It’s unclear how NAIA’s ailing airport infrastructure can cope with the forecasted airlift demands from these North Asia giants. On the positive side the skyway extension which will open up access between the airport to PAGCOR Entertainment City is moving past the planning stages and set to become a reality.”

In C9’s market analysis perhaps the largest challenge for Manila to become competitive with the likes of Singapore and Macau remains how to address Mainland China. Last year over 80 million Chinese travelers headed overseas and by 2018 the number is estimated to rise to 400 million. With the specter of geo political risk hanging in the air and foreign language challenges there still remains a mountain left to climb for Asia’s newest gaming challenger.

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