In a note reviewing the recent 1Q23 financial results of Bloomberry Resorts Corp and its Philippines market-leading integrated resort Solaire, Maybank Securities analyst Miguel Sevidal noted that results for VIP “surprised on the upside”, driven by locally-based Chinese players plus foreign visitors from Korea, Taiwan and ASEAN.

However, it is the rapid return of the Korean market that is driving recovery of the premium segments, with tourist arrivals from Korea now trending at 70% of pre-pandemic levels and sequential improvement seen month-on-month. There are now approximately 71 weekly flights from Incheon to Manila, Sevidal added.

“These trends suggest that the Korea VIP base should remain upbeat,” he said. “Our Maybank IBG Economics team notes that Koreans show the strongest outbound travel recovery among East Asian markets.”

While Koreans accounted for around 15% of VIP gross gaming revenues pre-COVID, they are now the dominant contributor to a subset (Korea, Taiwan and ASEAN) that accounted for 50% of VIP GGR as of 1Q23.

By contrast, Sevidal said he remains “lukewarm” on the recovery of foreign fly-in business from China, with flight seat capacity from China and Chinese tourist arrivals in the Philippines standing at only 40% and 12% of pre-Covid levels respectively.

Management of Bloomberry Resorts have also seen little significant uptick in Chinese junket activity, with the Philippines failing to rate as a preferred destination of Chinese tourists according to recent studies.

According to Sevidal, the recovery of VIP provides additional and unexpected upside for Philippines gaming operators, given that “domestic demand [will continue to be] the main driver of growth for the Philippine gaming sector, driving mass and slots GGR growth.”.

Figures also show that the percentage of casino GGR to total domestic spending on entertainment and recreation had risen to 63% as of 2022, up from 22% in 2013 and 53% in 2019. “This suggests that casinos’ wallet share from Filipino households has increased,” Sevidal said.

Bloomberry recently reported GGR of Php16.0 billion (US$287 million) in 1Q23, up 80% year-on-year and 9% sequentially, with VIP GGR was up 142% year-on-year to Php6.4 billion (US$115 million), mass tables GGR grew up 27% to Php4.9 billion (US$88 million) and slot GGR up 95% to Php4.8 billion (US$86 million).