Cebu-based NUSTAR Resort & Casino is continuing to anchor its casino operations on domestic demand while working on a reboot of VIP and junket gambling segments, says its chief operating officer (COO), Sean Knights.
“We do lean heavily into the local market. We’re probably just under 80 percent local,” Mr Knights said in an interview with GGRAsia. “There’s probably another 15 percent that’s domestic; and that final 5 percent is – visitation wise, not spend wise – from international markets.”
But he added: “We also recognise that people may be from Cebu, but they hold a foreign passport, and we classify those as locals.”
NUSTAR Resort & Casino, on the Philippine holiday island of Cebu, launched in May 2022, and is positioning itself as a valuable addition to the tourism offer of the holiday island. Mr Knights noted the segment mix at the integrated resort (IR) is weighted towards mass, “accounting for around 60 percent of business, with VIP contributing the remaining 40 percent”.
“It’s a good number because our margin comes from our mass market,” he stated, adding that while junkets remain important, they tend to “squeeze margins” for gaming resorts.
The casino floor at the property currently features 180 gaming tables and 830 slot machines, according to the COO.
Mr Knights said the firm has been rebuilding its junket operations following the exit of two major operators from the local market last year. “We’ve been plugging those rooms, and we have introduced new junkets into this market, and we’ll continue to do so,” he stated.
“We have two other junket rooms that are empty at the moment that we can expand into,” the executive told GGRAsia. “But currently, I think what we have is sufficient for our needs.”
He described the junket segment as reliant on scale. “You need sufficient junket revenue to justify the expenses, but you also need sufficient junket players coming through to remove some of their [hold] volatility,” he explained.
Trevor Hammond, senior vice president for gaming and IR operations, said the casino currently has five junket rooms in operation, with South Korean patrons forming the bulk of VIP customers. The group also conducts direct VIP operations, supported by casual agents locally and overseas, he added.
Smart tables, side bets
Mr Knights said progress has been made regarding exploring international markets, but that some measures take time to yield results, namely the visa-free policy for Chinese travellers.
The Philippines government said on January 16 that Chinese nationals would be allowed to enter and stay in the country without a visa for up to 14 days starting from that date.
“These things take time to ramp up, but this is when the marketing effort should start. You’re talking anywhere between three and six months to start to see any impact from such measures,” he noted.
“For China, it’s probably mid-year, maybe into the early third quarter” of the current year “in normal circumstances,” before benefits from such national tourism policy would be seen, he added. “But we’re not in a normal situation now, and it’s rapidly evolving due to the conflict in the Middle East, which could drag this longer.”
South Korea remains a key feeder market for Philippines gaming, Mr Knights acknowledged, while India is viewed as a potential growth opportunity over the longer term, particularly if direct air links are established.
He stated: “We are focused on areas that are exhibiting growth, and Macau is obviously very strong at the moment; so, we’re looking to engage with that market in a more forceful way as well, which drives a lot of our recruitment effort.”
Mr Knights also said the group was evaluating the use of smart tables but suggested that current volumes may not yet justify the investment. While such systems provide extensive operational data and enhance gaming integrity, their immediate relevance is greater in international markets, he noted.
“The rolling segment for us, at this point in time, probably does not justify the investment” in smart tables, the COO noted. “We probably need to grow it a bit more”.
Baccarat remains the dominant table game at the NUSTAR complex as observed during a tour of the casino floor, chiefly Tiger baccarat, providing additional side bets. Such features are “becoming popular” among players and are helping improve the house edge, said Fabio Moretti, assistant vice president for table games, noting that the game was offered across both VIP and mass-market areas.
* Disclosure: The GGRAsia reporter was a guest of NUSTAR Resort & Casino.
