[Click e-Stock] "Lotte Tour Development Nears Macau Hold Rate... Earnings Growth Expected"

Lotte Tour Development is raising expectations for earnings growth by strengthening its Macau-style premium casino strategy. With the expansion of high-roller (VIP)-focused marketing, an increase in the number of gaming tables, and a strategy to attract long-stay customers in full swing, securities analysts are forecasting a greater improvement in the company’s performance this year.

On May 7, Hyunji Lee, an analyst at Eugene Investment & Securities, stated, “Lotte Tour Development’s revenue for 2026 is expected to reach 753.6 billion won, up 15.3% from the previous year, and its operating profit is projected to grow by 37.7% to 197.3 billion won. The operating margin is expected to reach around 26.2%.”

Lee noted, “From April, the company plans to expand rolling tables and strengthen marketing targeting high-rollers. By significantly increasing table limits to meet Macau standards, demand for high-stakes betting is expected to grow.”

The company’s strategy to expand poker rooms is also drawing attention. Currently, Jeju Dream Tower Casino operates a total of 13 poker tables—11 general and 2 private tables—and plans to expand to 16 tables during May. Lee remarked, “The poker rooms are also expected to help attract new baccarat customers.”

Expectations for an industry-wide casino recovery are also rising. Lee predicted, “With daily flights between Macau and Jeju increasing from June, there will likely be balanced growth in both VIP and mass market customers. With ample hotel comp capacity, we expect industry conditions, performance, and momentum to all enter peak season beginning in the second quarter.”

The possibility of refinancing within the year is also cited as a factor for improved profitability. Lee said, “Profitability is expected to improve through refinancing within the year,” and picked Lotte Tour Development as a top pick in the leisure sector.

Changes in the Macau casino market are also considered favorable for Lotte Tour Development. After regulatory changes on VIP junkets, the Macau casino market has been reorganized so that premium mass customers now account for 80% of the total market.

In particular, the Cotai area—centered around integrated resorts—attracts high-income tourists from mainland China and long-stay visitors, resulting in a strong preference for high-stakes betting. In contrast, Macau Peninsula sees a higher proportion of same-day and local visitors from Hong Kong and Guangdong, resulting in a relatively lower betting volume.

There is also a difference in casino hold rates. The hold rate at Cotai casinos is about 26%, while that of Macau Peninsula remains around 20%. Lee explained, “On the Peninsula, repeated chip buy-ins lead to drop amount inflation, resulting in lower hold rates.”

Premium mass strategies by Macau casino operators are also yielding results. Lee analyzed, “The key to premium mass strategy is increasing the proportion of suite rooms. From 2019 to 2025, MGM’s market share rose by 6.4 percentage points, while SJM’s declined by 3.4 percentage points.”

Lotte Tour Development is also strengthening both its VIP and mass customer strategies. The company is pursuing higher betting limits, expanding rolling tables, attracting new customers through poker rooms, and expanding hotel comps. In the first quarter of this year, the proportion of hotel comps rose to around 45%.

Its differentiated profit structure in the Korean foreigner-only casino market is also seen as a strength. Lotte Tour Development’s casino hold rate is in the low 20% range, higher than Paradise and GKL, which are in the low 10% range. The hold rate refers to the percentage of customer betting amounts that the casino actually retains. The fact that Lotte Tour Development’s casino hold rate is close to Macau’s level is interpreted as a positive signal.

Lee concluded, “Lotte Tour Development is specialized in attracting high-value, long-stay customers and shares characteristics with Cotai’s customer base. We expect robust performance and improved profitability through strategic marketing and expansion of tables targeting high-rollers and VIP customers.”

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