Lotte Tour Development Stretching Out 'Jeju Dream Tower'... Sales Up with Increase in Casino VIP Arrivals [Company Exploration]

[Asia Economy Reporter Jang Hyowon] Since the skies reopened after COVID-19, the casino revenue, the core business of Lotte Tour Development, has shown remarkable growth. Moreover, Lotte Tour Development has taken a bold step with a ‘charter flight’ strategy to attract more overseas casino VIPs. As a result, casino revenue is approaching the break-even point (BEP) just over a year after opening.

According to the financial investment industry on the 26th, Lotte Tour Development is estimated to have recorded casino sales of 22.3 billion KRW in the third quarter of this year. This represents a 172% increase compared to the same period last year. In the first half of this year, Lotte Tour Development’s casino revenue was 24.5 billion KRW, growing more than 700% compared to the same period last year.

Lotte Tour Development’s ‘Jeju Dream Tower’ houses a casino gaming floor of 5,367㎡. It is the third largest foreigner-only casino in South Korea. In 2018, Lotte Tour Development acquired the casino corporation operating at Jeju Lotte Hotel for 14.9 billion KRW, expanded and relocated it to the Jeju Dream Tower complex resort, and opened the casino in June 2021.

The Jeju Dream Tower casino offers a variety of entertainment options, including 153 table games, 190 state-of-the-art slot machines, and 71 electronic games. In particular, it has created a space with large screens where multiple people can enjoy games simultaneously, increasing customer participation in gaming.

Not only the casino, but Lotte Tour Development also captivates foreign customers with various facilities within the Jeju Dream Tower complex resort. The interior of Jeju Dream Tower is decorated with a classic and oriental atmosphere. The sparkling mother-of-pearl decorations, bamboo, and traditional Korean lattice windows combine to give the feeling of entering a luxurious palace. The fact that the operator is the global hotel brand ‘Hyatt Group’ is also a strong point in attracting foreigners.

Jeju Dream Tower is the tallest building in Jeju, standing 38 floors and 169 meters high. It has 1,600 rooms, and its 14 restaurants and bars are operated by world-renowned chefs. It features a sophisticated and spacious swimming pool, spa, fitness center, and even a ‘jjimjilbang’ (Korean-style sauna) that foreigners often want to experience at least once.

With the skies gradually reopening, tourists are flocking to Jeju Dream Tower. As of September, the number of foreign guests staying reached 10,276, a 163% increase compared to the same period last year. Thanks to the full reopening effect, not only foreigners residing in Korea but also local customers have visited Jeju Dream Tower in large numbers since international flights to Bangkok and Singapore resumed in June.

As the number of customers increases, casino revenue is also approaching the break-even point (BEP). The casino’s BEP is estimated to be around 8 to 10 billion KRW per month. In June alone, casino revenue was 7 billion KRW. Thanks to actively attracting Southeast Asian casino VIPs in August and September, an additional monthly revenue of around 5 billion KRW is expected.

It is anticipated that the number of customers will increase exponentially as more international flights to Jeju open in the future. For now, the direct flight between Osaka and Jeju will open on November 11, and routes to Hong Kong and Taiwan are also planned to resume, raising expectations.

Furthermore, rather than just waiting for the resumption of Jeju international flights, Lotte Tour Development is leveraging its travel business know-how to directly operate ‘charter flights’ to attract casino VIPs. Lotte Tour Development plans to send a 189-seat exclusive casino charter flight to Tokyo, Japan, twice in November and December. Originally, it was a one round-trip schedule, but due to its success, it was increased to two trips.

Namsoo Lee, a researcher at Kiwoom Securities, analyzed, “The operation of charter flights and the expansion of direct routes are expected to contribute at least 1.4% to quarterly hotel occupancy rate (OCC) per 1,000 customers and at least 5 billion KRW to casino revenue.” He added, “Considering that foreigner casino performance in Incheon, Gimpo, and Busan rebounded when flights to Japan resumed, the expansion of air routes is highly likely to lead to immediate performance improvement for Lotte Tour Development.”

This content was produced with the assistance of AI translation services.