It’s been roughly 18 months since we last spoke. What’s new with the property and what’s been happening in the time since you last featured in Gambling Insider?
The biggest milestone over the last 18 months was about six months ago, when we finally finished Phase One of the resort. There were a number of amenities we suspended over Covid-19 then, of course, coming back online takes a while when you have to unsuspend them, so to speak. But now we’ve got a completed resort. We’ve got an incredible kid’s club. I know a lot of people have children and they really appreciate something as spectacular as our kid’s club – it’s been getting a lot of positive feedback.
While there, the children are making Vietnamese lanterns and doing cooking classes. So, it’s quite broad. In addition to that, we had our spa open. We had some spa facilities beforehand, but now we have a Japanese spa; that’s a very different kind of experience. People have been enjoying that, as well as our recently opened beach club.
The beach club has four additional restaurants; a seafood restaurant, an Italian restaurant, a grill and a Bánh mì restaurant, all of which have got a lot of traction. It’s got a couple of bars – it’s a normal beach club environment. It’s nice during the day, but at night it really lights up. It’s a spectacular place and it’s been identified as the biggest beach club in central Vietnam.
A few other restaurants have also opened since we last spoke, like San Xi Lou, which is a great Cantonese-style restaurant on the main level of our gaming floor. We’ve also got Lucky Court, which is a Chinese restaurant. We’ve got a few more event facilities, such as one that is now on the roof deck. That becomes quite an attraction for people looking to hold medium-sized events with up to 200 people – weddings and those types of things.
We’ve got a lot going on. Now we have the finished result, we still cater to some VIPs with our VIP cabanas, which gives a unique experience. We’re very diversified now, so it doesn’t matter whether we have visitors that come for more adult entertainment or people that come with families and want family-style entertainment – we can cater to all types of people. Our MICE (meetings, incentives, conferences and exhibition tourism) business is looking pretty vibrant, too.
There are a couple of interesting points you made, such as space for weddings. We’ve found that’s a growing theme among Asian properties. I know Macau is looking to diversify like this, but maybe it’s a bigger task for them. Some of my colleagues were at tradeshows last year like G2E Asia and there was a lot of buzz around Vietnam. Could you tell us more about why? Why is it growing and what are the kind of conditions that are making it such an appealing market?
The business in general is changing. You have certainly seen that in Macau with less focus on VIP business and what were formerly known as junkets. Business is changing generally, but what’s really happening is people want a broader experience. They want a gaming experience… but they want this experience to be accompanied by other experiences. Now we have to look at the unique character of what we have to offer.
I’m sure other integrated resorts are doing the same thing. You can’t go anywhere in the world, have a gaming experience, and have a Hoiana experience, right? There’s nowhere else like us. There are very few places where you can have a gaming experience and a world-class golf experience because most integrated resorts don’t have a golf course. Some do, but most don’t.
Few integrated resorts have four kilometres of pristine beach. You can be in your room, overlooking the ocean, wake up in the morning and see this gorgeous sunrise Chàm island in the background. You get goosebumps because you’re somewhere that is an experience. People aren’t going to talk about playing baccarat unless they win. But people don’t talk about playing in a casino; they want to play in a casino. What people talk about is the unique experiences they have at a destination.
It’s all very well saying that you can go to Vegas or Macau and experience Paris or London. You can, but it’s not the real thing, right? Come to Vietnam and you will experience the real thing, particularly with our resort being so close to Hội An – an amazing cultural experience. Those things are very powerful. This time of year, we have rice paddy fields that are just so green.
It’s an incredible picture We have these aspects we are offering to our guests, and we’re making it easy for those guests to experience these unique opportunities together with gaming; it can’t just be about gaming. We’re competing in a very complex field.
If it’s about gaming and the experiences that come with it, that can be experienced with your girlfriend, wife, family, parents, even! Come to Vietnam,because you can be on the casino floor while your family is doing something else and they’re going to have a memorable time. Those are the things that, when I look at gaming and I look at, ‘where’s the opportunity globally?’, the opportunities are in the destinations associated with gaming and not just about gaming.
What is your biggest market?
Our biggest market is the People’s Republic of China (PRC) and that’s what it was before Covid-19, too. More people were coming from Mainland China into Vietnam than any other country. Since the end of Covid, PRC travel has been quite limited in Vietnam. There are direct flights going into Hanoi and Ho Chi Minh, although I think it’s probably a third of what it was in 2019 and there are zero flights coming into Central Vietnam currently.
What we’ve had to do is say ‘okay, our biggest potential market for average spend per visit, in both hospitality and gaming, is PRC. But we no longer have PRC. What do we do? Wait for PRC?’ Of course we’re going to have to wait, but do we wait and just keep our fingers crossed? No, we wait, but at the same time, look to establish other markets, Korea being our foremost market. The Greater Bay Area, which is Hong Kong, Taiwan and Macau, is another very vibrant local market.
Although we don’t have locals that can go here, there are a lot of expats and many of those expats do business here. There are incredible manufacturing plants here where those expats do business, and they often want somewhere to go and play afterwards. I’m talking about it from a hospitality standpoint, a gaming standpoint and a golf standpoint.
If they’re in the two major population bases of Hanoi and Ho Chi Minh, what better way to do that than take a flight that’s only going to take you an hour? Central Vietnam is a very different experience for a mini vacation; it suits it very well. So we’ve really focused on that market, as well.
You mention targeting the South Korean market, although Mohegan Inspire recently opened there. How does that impact you, with a big new competitor in that market?
Having been someone who was at Mohegan Sun and worked there prior to its opening in Connecticut many years ago, I’ve continuously been a Mohegan Sun fan. I wish them great luck with their projects. I think the project itself is quite amazing.
Having said that, the most important thing we can all do, including the Mohegan project in Korea, is provide unique experiences because, at the end of the day, that’s what’s going to count. If you’re playing blackjack or baccarat in a casino; if you’re playing baccarat, closest to nine wins; it doesn’t matter whether you’re playing here or anywhere else in the world – closest to nine wins. What is different is what you can do, what you can eat, where you can sleep, where you can experience those things.
These are the differentiators we focus on and I’m sure Mohegan Sun are doing exactly the same thing. As far as their business is concerned, they are quite similar to ours as they have a foreign-player-only casino. That poses its own challenges. I know they’re particularly entertainment-centric and we’re entertainment-centric as well, although to a slightly lesser extent. We don’t have the arena facility they have, but we have many things that people can say, “I remember, and I want to go back to Vietnam first and Hội An second”.
That makes a lot of sense. What about other resorts in Vietnam, like The Grand Ho Tram?
In Vietnam, there are three integrated resorts. You’ve got Corona on Phu Quoc Island, The Grand Ho Tram, which has been open now for over 10 years, and you’ve got us. Destination-wise, we’re in three different destinations in Vietnam, so that certainly allows people to experience different resorts at different times.
Having said that, only Corona is open to locals under a pilot program, which is still underway. We would like to participate in local gaming at some point, but we understand and support the Government’s decision to take things slowly.
I’m sure Grand Tram feels the same way we do, especially as they have more to gain from local gaming because they’re a two-hour drive, as opposed to a 1.5-hour flight from Ho Chi Minh City. I think we share a lot of the challenges and sometimes the pain – but also the opportunities that are not only here today, but on the horizon.
Shifting our focus to Macau, how do you view its recent GGR totals? They’re not quite pre-Covid levels but, given the shift away from VIP and junkets, that’s probably not realistic at the moment. Perhaps they’re more profitable with less revenue and that’s what some of the property chiefs are saying. But does that open more of a market for properties like yours in Vietnam?
It gets back to the fact that Macau is doing extremely well right now in that post-VIP segment, which for the most part no longer exists in Macau. But on reflection, the most important thing is how many contributions are there for the bottom line, and the mass business is far better when it looks at contribution.
The VIP business is something that Macau had enormous amounts of at one point – and now they don’t – yet their GGR isn’t that much away from what it was when they did have that sort of level of play. Certainly, profitability is there. Kudos to Macau.
They have a captured market and that market is predominantly from the PRC. Now people are going there, looking at gaming as a part of the entertainment experience and going because of ease of access. I believe as the market becomes more relaxed, other integrated resorts and properties in other jurisdictions throughout Asia will also benefit from that demand for entertainment.
Looking at Singapore on a similar note, you’ve got the Marina Bay Sands, which is showing huge growth. As a destination for gaming, the Marina Bay Sands is the place to be; but that property aside, there is a lack of competing properties in Singapore. Is this something Vietnam can benefit from?
The Singaporean Government are very astute in the way they planned their gaming ventures in their country, and they have a pretty favourable tax rate. It’s not dissimilar to what we experience in Vietnam. They have a captured market, and as much as Singapore is a recognised destination, they allow locals. They have to pay, but they also have a very affluent population. Singapore is very much an established business hub. There are many attributes of the Singapore business model that work for Singapore, which would not necessarily work as favourably in Vietnam.
But I also believe Vietnam is not going to be a place that saturates itself with gaming. The Philippines is a little more aggressive when it comes to casino licences. It’s more conservative in Vietnam; I think that’s good and healthy for business and the country as we partner with tourism, because it’s all about creating tourism experiences.
And development; we’ve got a massive development of $4bn, close to 1,000 hectares. It’s going to take a while for us to go through this development and we need to experience continued growth in our integrated resort gaming segment.
A final topic and final word on potential new entrants. You’ve got the Middle East potentially with Wynn Resorts. While there are no concrete developments in Thailand right now, they are looking at land-based again. What do you make of the potential of the two new regions?
The Middle East is quite a way away, but I’m sure we’re going to learn a lot from the Wynn experience. As the Middle East diversifies from oil into what it’s doing now, it is building these megacities and incorporating a lot of different businesses into those cities, including integrated resorts. There’s no casino licence currently; but one day we believe there will be and I think that’s going to be very successful. As far as Thailand’s concerned, kudos to Thailand. Thailand’s Government is extremely good.
When they want to do something, they do it quickly. They focus on what is required to get tourists into the country. Take visa exemptions. They look at how to make it easy and how to make it fun. I think Japan is a great country, but my guess is that Thailand is going to be developed before Japan. That wouldn’t surprise me.
Thailand is, in many ways, similar to Vietnam and I believe with Thailand developing that industry and looking at integrated resorts and megaresorts, it will encourage the Vietnamese Government to also look at the competition and say: ‘What do we need to do to make the industry better for this country? Better for the thousands of people that are employed in this industry and to bring greater tax revenue?’ I’m encouraged by Thailand; I don’t look at it as a threat. I look at it as something we should be embracing, something that will create more critical mass.
We want to do it responsibly but also create this traction, which is about people coming to Vietnam, having a lot of fun experiencing Vietnam, experiencing the food, experiencing the gulf, experiencing the people – really important – and being able to spend their money as they wish. If that means going onto a casino floor and having a gamble, they can do it knowing the regulatory compliance environment is one that is as rigid as anywhere in the world. They can rest assured that they’re going to have a very good experience.
