Landing International’s Korean casino resort faces uncertainty after Beijing bans Chinese tourists
A multibillion dollar investment in a casino resort in South Korea by Hong Kong-listed Landing International faces uncertainty amid a continuing political row between Seoul and Beijing.
The company opened the Shinhwa theme park on Saturday, a major part of its Jeju Shinhwa World resort, located on Jeju island off the coast of the Korean Peninsula.
Landing, the developer and operator of the US$2. 6 billion project, tested the market by debuting 342 serviced flats in April.
However the 2.5 million square metre resort, which is set to become fully operational in 2019, has been shadowed by geopolitical setbacks. In March, only a month before the resort’s opening, Beijing banned mainland tourist groups from visiting South Korea amid escalating tensions over Seoul’s plan to deploy a US anti-missile defence system.
The frosty atmosphere reflects a major turnaround from when Landing bought the site in late 2013, when Chinese and South Korean relations were warming. Jeju granted 30-day visa-free stays to Chinese citizens soon after.
But relations took a sudden turn for the worse this year as Beijing expressed its opposition to South Korea’s intention to deploy the Terminal High-Altitude Area Defense (THAAD) system in response to threats from the North Korean regime.
In an exclusive interview with the South China Morning Post Jay Lee Poh-yee, chief operating officer of Landing International, said that the theme park has suffered from the downturn in Chinese tourists, but added that he remained bullish on domestic demand as South Korean families have a propensity to spend on high-quality products.
“At least half of our visitors will be domestic-driven,” Lee said.
The main strategic change now is “we don’t solely focus on China, but the regional markets from Japan, South Korea, Hong Kong, Taiwan to Southeast Asia.”
“I think this project will change the face of Jeju,” Li added. “There’s definitely a shortage of a world-class theme parks.”
Next to the theme park, the construction of Jeju’s first Marriott hotel, which will house the casino, and a Four Seasons Hotels and Resorts is in full swing.
The park is seen as a major coup for Jeju tourism, which has set a target of 15 million tourists by 2018.
Meanwhile, the park has hired 1,300 staff and expects to provide 5,000 jobs by the time it is fully operational.
Kevin Kim, a Jeju native who has studied Chinese for six years, works in reception at the serviced apartment Somerset at Shinhwa World.
“I think Jeju people welcome the project. In Seoul, there’s Lotte World, but we haven’t have this kind of thing before.”
The company is in the process of relocating its Landing Casino in Jungmun, Jeju to Shinhwa World – inside the Marriott Hotel which is set to open by December 2017.
“Gaming and non-gaming will contribute half/half of the revenue,” Lee said.
However the loss of mainland group tours could have a bigger impact on the casino sector. “Foreigner-only” licences are standard in South Korea, meaning that its nationals are prohibited from gambling in the country’s casinos with the exception of the remote Kangwon Land Casino, located several hours drive from Seoul.
The weekend’s theme park opening festivities included as key attractions the screening of popular Korean animation Rotary Park at a 4D theatre to showcase a collaboration with local animation company TUBAn.
“Jeju Island is like the back garden of South Korea. We hope to introduce the best business partners to jointly offer a world-class integrated resort in Jeju,” Yang Zhihui, the Anhui province-born property-to-casino tycoon who is Landing’s chairman, told reporters and local officials at the opening ceremony.
Planned facilities include a movie world in partnership with US studio Lionsgate, a town featuring Korea’s YG entertainment artists including celebrity G-Dragon, a water park, casino, conference venues, and more than 2,000 hotel rooms and villas. The facilities will progressively open from 2017 and be fully completed by 2019.
Transforming from a traditional home builder to a regional resort and casino operator, Landing is further aiming to develop a multibillion-dollar integrated resort in the Philippines.
“Just like Jeju, it also has a strong domestic market, people have the propensity to spend, but the product is not good, there’s a gap for us to fill,” Lee said.