Betting on the Growth of Integrated Resorts
The growth of global tourism is occurring in all sectors of the industry and tourism infrastructure appeals to travelers on both low and high budgets. However one of the most notable global growth areas at the high end of the travel market has been the development of integrated resorts. Professor Brian King, a widely respected tourism scholar from the Hong Kong Polytechnic, explained the growth of integrated resorts and some of their associated problems during his keynote address at the 2017 CAUTHE Conference held in Dunedin, New Zealand February 7-10, 2017.
The CAUTHE (Council of Australasian Tourism and Hospitality Educators) Conference is one of the world’s largest annual gatherings of tourism and hospitality educators from the higher education sector. The 2017 conference was hosted by The University of Otago in Dunedin, New Zealand and attracted over 270 academics and higher degree researchers who presented over 170 papers. The papers covered a wide range of research in the field of tourism, hospitality and events. Although CAUTHE is officially an association of Australian and New Zealand tourism, hospitality and events academics, participants from over 20 countries attended CAUTHE’s 27th annual conference.
Professor King’s paper indicated that the world’s leading growth area for integrated resorts was the Asia Pacific region. His working definition of an integrated resort was “a multi billion dollar, multi dimensional resort that includes a casino occupying less than 10% of the public floor space but which generates more than US$300 million in gaming revenues.
Based on that definition its takes little imagination to appreciate that such resorts are tourism magnets in cities as dispersed at Las Vegas, Macau, Manila, Melbourne and Singapore. Professor King identified the Marina Bay Sands resort in Singapore as the highest earning integrated resort in the world. Traditionally, high levels of gambling revenues have enabled integrated resorts to charge relatively modest accommodation and meal rates relative to the luxurious standard of accommodation, dining and entertaining they provide their guests. The more successful integrated resorts become key attractions for the destinations in which they are located.
Most of the integrated resorts in the Asia-Pacific have targeted the growing Chinese outbound market. Many have made financial arrangements for “high rollers” to circumvent the strict limits on foreign currency the Chinese government has imposed on Chinese travelers who travel outside of China.
Although gambling is a significant element in the earnings of integrated resorts, many non-gambling guests and visitors are attracted to the resorts due to the high quality of their accommodation, dining, meeting and convention facilities, entertainment options and the many activities offered. There are well advanced plans to develop and expand integrated resorts in Japan, South Korea, Philippines, Malaysia, Vietnam and Cambodia.
Common problems which arise from gambling based businesses include the attraction of organized crime syndicates who engage in extortion. Usury, based on gamblers accepting loans at inflated interest rates which they cannot repay is a common problem. In Macau, crime rates in 2016 related to gambling experienced a 20% increase in 2016. However, gambling all over the world leads to a range of social problem related to addictive gambling behavior.
As Professor King pointed out, integrated resorts have proven to be successful tourist attractions for the resort’s owners and its associated destination but unless their gambling operations are carefully regulated, that success can come at a high social cost.