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Gambling to drive Philippines and Manila’s tourism expansion

Gambling to drive Philippines and Manila’s tourism expansion
November 27, 2013

Tourism growth in the Philippines capital of Manila is set to be driven by massive investments in gambling, and battles between established gambling giants and independent operators.

According to hospitality consulting firm C9 Hotelworks' newly released Manila Hotel Update, a significant number of incoming mega hotel projects are being developed to attract gambling tourists from across Southeast Asia. However, while the gambling market is growing new developments are also "likely to cannibalize the existing industry's leading market source - domestically generated business."

C9 Hotelworks cite a prime example of this trend being the Solaire project which has seen a strong shift away from gambling 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 gambling 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 in 2015. Two other branded hotels by Hilton and Sheraton are coming up in the same complex together with 9,000 metre2 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.

C9 Hotelworks' Manila Hotel Update report can be read at www.deliveringcommunications.com/ 

Image: Solaire Manila.

22nd March 2013 - MANILA OPENS FIRST OF FOUR MEGA CASINOS 

6th February 2013 - CASINOS AND ‘DEMAND GENERATORS’ KEY TO THAILAND’S TOURISM SUCCESS

24th May 2010 - US GAMING COMPANY BETS LARGE ON SINGAPORE AND ASIA


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