City of Dreams expects strong H2

MANILA, Philippines - City of Dreams Manila, the second of four integrated resorts in Pagcor Entertainment City, has forecast a strong end to the year as gaming revenues from the VIP segment start to kick in.

Willy N. Ocier, chair of listed Premium Leisure Corp. (PLC) and vice chair of Belle Corp., said City of Dreams is confident operations would improve in the second half with the entry of the VIP high-roller sector.

“The second half of 2015 will be strong.  COD just started VIP operations in July 2015,” Ocier said.

Revenues of casinos primarily come from mass and VIP gamers, which are organized by junket operators.

VIP junket operators, also known as VIP room promoters, act as facilitators for Macau’s billion-dollar casinos, guaranteeing a certain amount of revenue from China’s high stakes gamblers.

City of Dreams, a joint venture between the SM Group and Macau casino giant Melco Crown, holds a provisional license to develop and operate a casino in the Entertaiment City complex along Manila Bay. It had a soft opening in December 2014 and a grand opening last February.

Melco Crown Philippines incurred wider losses in the second quarter, rising to P1.82 billion from P1.43 billion due to higher costs arising from the operation of City of Dreams.  This brought its total losses for the six months ended June to P4.91 billion, more than double the P2.4 billion loss reported in the same period a year ago.

The second integrated resort to open at the Philippines version of the Las Vegas strip had a soft opening on Dec. 14, 2014 and a grand opening on Feb. 2.

Sitting on a 6.2-hectare property, City of Dreams includes approximately two hectares of gaming space, approximately 900 hotel rooms operated under three hotel brands, an indoor amusement park, and approximately two hectares of restaurant and retail space

The integrated casino resort has been forced to trim its manpower, letting go of about two percent of its total workforce, which includes casino dealers, hotel and food and beverage staff.

The layoff is part of a cost rationalization program.

Commenting on the manpower reduction, Ocier said: “Operations [department] may have overestimated its manning requirements.”

Its non-gaming offerings include hotel, retail, food and beverage and entertainment facilities.

A government-led crackdown on corruption in China has deterred high rollers from gambling.  This has resulted in a dip in Macau’s gaming revenues, which account for more than six times that of the Las Vegas Strip.

Two other integrated resorts are scheduled to open in Pagcor’ s 120-hectare development -- Universal Entertainment subsidiary Tiger Resorts’ Manila Bay Resorts, which is targeted to open in December 2016 and Resorts World Bayshore of the Genting Group and Alliance Global Group, which is slated for completion by 2018.

Gaming revenues from the country’s casinos rose 16 percent in the first semester to $1.4 billion and are expected to grow further to $3 billion by the end of the year.