Corporate News

By Krista A. M. Montealegre, National Correspondent

Melco to seek easing of visa norms for Chinese

Posted on June 21, 2016

MELCO CROWN (Philippines) Resorts Corp. (MCP) is pushing for the relaxation of visa requirements for Chinese visitors to boost the tourism and gaming industries, with the operator of City of Dreams also expecting sustained improvement in its financial performance.

On the sidelines of the company’s shareholders meeting in Parañaque City on Monday, City of Dreams Property President Geoffry P. Andres told reporters the Philippines has barely tapped the mainland Chinese market and relaxing the “cumbersome” visa process can unlock its huge potential.

“We have a big opportunity to [tap] this mainland Chinese market and one of the things on my wish list is easing the visa requirements for Chinese tourists. If we do that, that will raise all boats not only for the gaming industry, but for the tourism industry overall,” Mr. Andres said.

Several countries such as the United States, Australia, Malaysia, Vietnam and Thailand have softened visa rules for Chinese tourists, he said. The Philippines is hoping to attract Chinese gamblers as the ongoing corruption crackdown on Chinese territory is scaring many of them away from Macau, the world’s biggest gaming hub.

“You lose that spontaneous impulse by people just wanting to come and visit. If we can make it easier for people to visit... they (can) have an amazing time and they go back and tell great stories,” Mr. Andres said.

“We are seeing a lot of return visits also. We are just getting started,” he said.

China was the fourth biggest visitor market for the Philippines last year, registering 490,841 visitors, comprising 9.16% of the total inbound traffic, according to data from the Tourism department.

Earlier this month, Bloomberry Resorts Corp. Chairman and Chief Executive Officer Enrique K. Razon, Jr. said the outlook is upbeat for the gaming industry, citing the openness of the incoming administration to engage in bilateral talks with China to resolve a territorial dispute.

MCP officials declined to comment on the revenue mix between the foreign and local markets, with Mr. Andres only saying that he “feels pretty good” about the business they generate from its visitors from South Korea, China and Southeast Asia.

Despite concerns of an oversupply in the domestic market, MCP Chairman and President Clarence Chung remains optimistic about the company’s prospects, noting that it has been chalking up positive cash flow and earnings before interest, tax, depreciation and amortization (EBITDA) “in the last two quarters.”

“We are continuing ramping up our financial performance and we are more focused on the cash flow and EBITDA -- these are real cash and real earnings of the company.” But “accounting wise” -- the numbers the company needs to formally report -- “hopefully, it will be reduced given the improved operations in the following years,” Mr. Chung said.

MCP incurred a net loss of P1.14 billion in the three-month period, substantially lower compared to the P3.09 billion in the same period a year earlier, after casino revenue doubled and expenses declined.

“We are operating in a relatively competitive environment and a backdrop of a relatively competitive and ‘declining’ regional gaming environment. But having said that, we at Melco Crown and City of Dreams Manila have done very well in the last two quarters,” Mr. Chung said.

City of Dreams Manila, which held its soft launch in December 2014 and grand launch in February last year, is the second casino to rise in Entertainment City, the Philippines’ answer to Macau and Las Vegas, after Bloomberry’s Solaire Resorts & Casino.

Shares in MCP added 38 centavos or 12.79% to close at P3.35 on Monday.