The Philippines casino industry could be facing tough times ahead, as the difficulties of operating post Covid-19 will soon combine with rising competition. Several experts predict hard times ahead for the sector, as new players emerge and plans start to emerge.
The New World Manila Bay Hotel and Casino is looking to upgrade its property into a full Integrated Resort (IR). Westside City will eventually finish construction. And the Waterfront Philippines have won a long court battle to go ahead with their own plans. That all adds up to a pretty crowded Entertainment City.
“It’s difficult to gauge the demand of the industry now that we are in a very difficult situation,” Richard Laneda, an analyst with COL Financial, told Asia Gaming Brief. “We also do not know the timing of these new resorts and their respective sizes. Nevertheless, I believe in the short term this will increase competition in the area and will lead to some market share being taken from existing IRs. This will also lead to some margin erosion. But history shows that new IRs are able to grow the pie over the long term.”
That’s not the end of it either. A moratorium on new casino licenses was put in place in 2017, but is set to expire 2022. While many were anticipating that to happen so the casino industry could really explode (or get saturated, depending on your perspective), President Rodrigo Duterte started hinting in 2019 that he may be open to more casinos already.
But with Covid being a fact of life, experts suggest a different approach if new properties insist on opening up short term. “We are strongly urging developers to reconsider their number of Junket rooms and to lower their expectations with the related revenues, and to consider a much more rounded gaming floor offering with the focus on mass and premium mass, as Macau is now doing, large sports books, vibrant stage shows, and a multitude of gaming floor F&B outlets,” said Scott Feeney, CEO of Gaming Concepts Group. “We recommend that gaming floors have a much larger overall entertainment and F&B footprint to cater for the locals to offset the expected lower numbers of Junket groups in general and obviously the lower numbers of international visitors, both tourists, business travellers, conferences and even those simply visiting for pure gaming.”