PHILIPPINES TOP 10 HOTEL & CASINOS
GCG Gaming Advisory Services
Philippines Gaming Industry - Insight # 4
Q3 2021 has seen Manila casinos mostly closed or with severe restrictions, whilst Clark continues on with limited capacity, and in Cebu construction continues on with aims of Q2 openings despite the huge challenges.
Manila remains problematic wth ongoing closures. Westside City recently announced some additional funding due to cost overruns
with issues such as raw materials, labour and logistics leading to the inevitable increases to the project time lines and budget.
Cebu is forging ahead with two US$500 million projects set to both be open within the first half of 2022 inline with some easing of
restrictions. With a very strong locals market, and with Manila
premium players in their sights, we expect Cebu to have a range of
US$75 to US$100 million GGR combined in H2 2022, given both are
open. Whilst NuStar has their capital in place and is not expected
to have further delays, we are doubtful that Emerald Casino can be
open in Q2 2022 given their on-going funding concerns.
In Clark, Widus Casino is firming as the leading resort with their HANN Casino and Swissotel Hotel almost ready. We estimate GGR in the US$50 to US$80 million range for H1 2022 with Clark getting back to 2019 GGR levels in 2022. (US$243 million)
Hann Casino - Dec. 2021
Royce Casino - Apr. 2022
NuStar Casino - Mar. 2022
Emerald Casino - Q2 2022
Westside City - 2024
Manila Pavilion - 2023
GCG Gaming Advisory Services offers an extraordinary level of expertise in the Philippines since 2004. Contact us for free insights and more. email@example.com
PHILIPPINES GGR - 2019 to 2022
A record GGR of US$5,015,108,978 led by the Entertainment City big four casinos. Clark has its best revenue on record with the opening of D'Heights, the addition of the Marriott Hotel at Widus and record numbers of international visitation. Widus is the star performer.
COVID hit gaming in February 2020. Revenues started their slide with international borders closed in late March, and Q1 decreased 5% year on year. Q2 saw most casinos fully closed and a 96% decrease in revenue. In Q3 there was some minor recovery with a smaller 69% year on year decline. Q4 saw a greater recovery with Entertainment City (55% decline year on year) and Clark (34% decline year on year) having a good recovery. Key points to 2020 was that Clark suffered the least decline due to it having a large expat Korean and Chinese community and only having limited capacity restrictions rather than the more thorough restrictions in Manila. Overall the gaming market was down 57%.
Q1 saw a 43% decrease year on year reflective of the very poor operating conditions. Unfortunately Q2 saw extra restrictions placed on the Manila casinos. Casinos stayed closed for most of Q2 and suffered a 35% decline quarter on quarter. During Q3 the Manila casinos were closed from 6th Aug. to 30th Sept. however GGR improved 36% due to the introduction of eSabong. Entertainment City was up 28.80% and Clark was up 22.25% due to strong locals play and expatriate community. Q4 sees a rebound and is the best performing month since Q1 2020 however still down by 39%.
Overall H1 2021 was a very difficult trading environment. Year on year H1 revenues were down by 11%, which was not expected prior coming into 2021. The second half of 2021 sees Manila casinos fully closed for most of July to Sept. opening to higher capacity on 18th October. H2 2021 manages to generate a 33.20% increase over H2 2020. Overall 2021 is only a 6.50% improvement over 2020. Another very tough year for operators in general. H2 2021 achieved the highest level of GGR since the pandemic, however still 49.20% below H2 2019.
There are many growth signals for 2022 including the opening up of international travel in March, the first full year of the newly opened HANN casino and Swissotel Hotel in Clark, steadily improving infrastructure, and the pent up demand of the key markets of locals, expatriate Koreans, Chinese, Japanese and Taiwanese. The opening of NuStar, Cebu in March 2022 will see the revival of the Cebu market. Clark will see the opening of Royce Casino in Q3.
Q1 starts the year off with a small 3% increase in GGR quarter on quarter and a 10% increase year on year. The major markets of Entertainment City, Manila, up 15%, and Clark, up 60%, see good growth compared to Q1 2021. From May Clark benefits greatly from the opening of HANN Casino and the Swissotel Hotel. Clark Q2 sees GGR reach $86.3 million its best quarter on record exceeding the $76.9 million in Q4 2019. Q2 continues to be very strong with a year on year growth of 128% and quarter on quarter growth of 34%. Overall H1 sees $1.667 billion GGR and H2 is estimated to exceed the overall record of $2.59 billion achieved in H2 2019. Q3 increases to $1.004 billion, a record result since the previous highest level of $1.3 billion in Q4 2019. H2 is projected to close at $2.3 billion bringing 2022 to close at a range of $3.9 to $4.1 billion. 2019 ($5.01 billion) should be exceeded in 2023.
Gross Gaming Revenue (GGR):
H2: $ 956,604,011
H2: $2,300,000,000 (Est.)
Total $3,967,637,123 (Est.)
2022 and Beyond:
For 2022 we estimate GGR to be in the US$3.9 to US$4.1 billion range, still slightly below the peak of US$5.01 billion in 2019. The four casinos in Entertainment City should account for a range of US$2.3 to US$2.7 billion compared to $3.34 billion in 2019.
Important openings this year include Royce Clark (December), Waterfront Pavilion, Manila (Q4), a full year of operations for New Coast Manila and Okada's hotel room expansion. HANN, Clark opened in May and had been highly successful with an approximate $70 to $80 million GGR in Q3, Xenia Hotel, Clark, housing the Capital Casino, with 150 slots and a small number of gaming tables also opened in early July. Fontana has limited casino operations whilst it continues with its renovation set to open in mid-2023 and Filinvest has commenced large-scale construction. Westside City, in Manila Entertainment City, will open by mid-2024.
With NuStar, Cebu opening in May 2022 it will remain to be seen if they will be able to generate enough revenue to be successful in the short term with its US$300 million minimum investment. NuStar is the lone integrated resort and may not be enough for Manila and international customers to make the trip. We estimate GGR in the US$40 to US$60 million range in full year 2023 after a slow ramp up inline with the gradual easing of travel and other related COVID restrictions throughout 2022.
Bloomberry is expected to finalise its purchase of PH Resorts Emerald, Cebu and Base, Clark assets in H2 2022. The Emerald could possibly be ready for a partial opening by Q1 2023.
It will be interesting to see how two US$300 million casinos in Cebu can survive with a slow ramp of international travel expected and the demise of the junket industry. The international airport is world-class and will take direct international flights. We estimate GGR to be in the US$60 to US$80 million range for these two integrated resorts in full year 2023. This would be approximately 25-35% of the Clark market, its main competitor and less than 5% of the total Philippines market.
Clark will remain the stronger of the two secondary markets with 2022 projected to be in the range of US$300 to US$340 million GGR bringing it back to higher than 2019 levels. (2019: US$243 million). Royce Casino will open in December 2022. There are several expansions planned for the 2023-2024 period including HANN, Midori and D'Heights. Several large-scale projects in the planning stages will bring total GGR into the range of $800 million to $1 billion by 2027.
Our projection for a US$10 billion Philippines market remains at full year 2027 exceeding all SE Asian markets other than Macau.