olaire Resort and Casino is a quantum leap beyond Manila’s other gaming options. The Paul Steelman designed US$ 1.2 billion property can stand proudly alongside gaming floors in Macau or Las Vegas on the elegance scale. Global Market Advisors partner Andrew Klebanow equates Solaire’s service experience with Wynn Macau. But Solaire’s 500 rooms, luxurious as they are, are insufficient to fill the casino’s nearly 300 tables and 1,200 slot machines, the veteran gaming executive and consultant adds.
Moreover, when it opened in March last year, the resort was nothing more than a casino hotel, rather than the full blown integrated resort (IR) crosstown rival Resorts World Manila presents. Solaire has also stood alone in the Entertainment City complex, slated to include residential and office towers, a marina and three more IRs but now mainly expanses of vacant land, with an expressway connection still under construction.
Those issues contributed to a disappointment start for Solaire, leading to an abrupt change in management a year ago. Global Gaming Asset Management, founded by former Las Vegas Sands LVS +1% president and chief operating office William Weidner, was fired by Solaire’s owner Philippine billionaire Enrique Razon Jr, accused of not taking a sufficiently hands-on management approach to the property. Razon replaced GGAM with former Marina Bay Sands CEO Thomas Arasi, who has helped turn around Solaire.
Bloomberry Resorts, Solaire’s Manila-listed parent company, reported net revenue equivalent to US$ 19.4 million in the second quarter, the first where comparison to a full quarter of operations the previous year is possible. Led by strong growth in overseas VIP play, gaming revenue rose 56% to US$ 118.3 million and EBITDA nearly quadrupled to $103.5 million. Reporting for the third quarter could show even stronger numbers, since Bloomberry director of investor relations Leo Venezuela says the resort’s junket operations “are still very much in a ramp-up mode.”
Moreover, some of Solaire’s initial shortcomings will have solutions. In November, the resort says it will open what it’s dubbed Phase 1-A. The extension includes 312 new hotel suites aimed at premium players, high end retail and a theater seating 1,700, the latter two features catering to Philippine passions for malls and entertainment. These additions, along with a world class spa and wow factor water feature, should make Solaire a genuine integrated resort.
The isolation factor should be mitigated by Entertainment City’s second gaming property, City of Dreams Manila, the US$ 1.4 billion Melco Crown IR that officials have suggested will open this month. The IR will have three hotels, Hyatt, Crown Towers, and Asia’s first Nobu Hotel, a star studded project featuring celebrity chef Nobu Matsuhisa and Robert De Niro. The IR will include nearly 900 rooms, plus shopping and entertainment. With its Macau connection, there are great expectations City of Dreams Manila will bring planeloads of Chinese high rollers to town.
That’s certainly what Philippine authorities had in mind when they conceived Entertainment City as a way to boost tourism and government revenue. Visitor arrivals grew 8.8% last year to 4.68 million, but showed just 2.2% growth for the first seven months of this year. Arrivals from China, the Philippines’ number three market behind South Korea and the US, were up 8.8% despite the ongoing maritime dispute between the two governments.
Gaming revenue rose 10% to the equivalent of US$ 2.2 billion last year, and grew another 9.3% in the first half of this year. Decent numbers but two full-fledged IRs need to do more, much more. Resorts World Manila is credited with doubling Philippine gaming revenue after it opened in 2009, and that’s set the bar high for Entertainment City IRs.