Donaco says VIP traffic at new Vietnam casino strong despite tensions

    Donaco International said VIP visitors to its property in Lao Cai, northern Vietnam, more than doubled in May from the same period last year, despite geopolitical tensions between the two countries.
    The company, which had a smaller existing casino at Lao Cai, held the soft opening for its new luxury Aristo International Hotel on May 18th.
    In a filing with the Australian Stock Exchange, the company said total visitation had increased by 41 percent since the soft opening, while VIP numbers were up by 116 percent, driven by strong interest from junket operators. The mass market however declined 13 percent.
    Overall turnover also almost doubled, gaining 94 percent, it said.
    Donaco has the right to operate a maximum of 50 gaming tables in Vietnam with a gaming license until 2044. The casino has 428 hotel rooms, permission for 150 slots and 150 electronic table games. In Thursday’s release the company said it was currently operating 40 tables.
    According to a recent company presentation, the property gets 90 percent of its revenue from VIPs, with the majority from the neighbouring Chinese province of Yunnan.
    The company pointed out that the strong performance had come despite the fact that some facilities at the resort are still not open. It also said that while the tensions between Vietnam and China had not affected VIP visitation to the resort, they may have affected overall Chinese tourism to the country, having an impact on the mass market.
    The latest maritime tension came from China moving an offshore oil platform into disputed waters on May 2nd, which Beijing has now said will be moved by August 15th, according to Donaco. The tensions sparked widespread and violent street protests across Vietnam.
    Donaco said the border crossing into nearby Yunnan had remained open throughout the tensions and in fact trade at the Lao Cai border gate was up 59 percent in the five months to end May.
    Lastly, the company pointed out that the World Cup may also be proving a distraction for gamblers.
    In a recent report Bank of America/Merrill Lynch said it was optimistic about prospects for the property, seeing significant mid-term upside.