Insight SAIPAN Imperial Palace
It’s a similar model to Las Vegas Sands, but were they own the casino, the shopping and build their own hotels - with the hotel companies managing them for a percentage; we will do the opposite. We will have the investors own, build and operate the hotels, leaving Imperial Pacific to own and operate the casino across all the development phases. At this moment we are focusing on the temporary and the Grand Mariana casino, once we’re fully opened then we’ll focus on the design and the numbers for the second property.
Compared to the operating environment in Macau, what are the advantages for Imperial Pacific to operate a casino in Saipan?
I continue to describe Macau as the ‘king of gaming.’ Yes, the VIP numbers have been dropping. Tese extremely high value players, billionaires in their own right, are looking for new places to go. We are very transparent, there’s no gaming tax, there’s no profit sharing. With junkets, the sub-junkets and our customers, the big question - crucial question - is where does my customer want to go?
When I was at NagaCorp for a year, our big question was “where do they go?” Do the VIPs go to Singapore, Cambodia, Korea, Vietnam, Philippines or Macau? Where do they go and who is giving the best deal? Fundamentally, it’s about where your customer wants to go - where do they feel safe? Not only at the table, but in general. Te guys coming to Saipan to bet $500,000 a hand on baccarat because they feel comfortable. In Saipan, you’re playing in the United States; the game is scrutinsed by the US Casino Control Commissioner, security guards, cameras etc. As counter intuitive as it sounds, we have VIP players coming to the US who like playing in a highly regulated environment.
always be a VIP market, because we are a plane destination. Our players will always have to fly to Saipan, so we will always be the preferred VIP destination because Saipan has more to offer than just gambling.
What are your expectations following the success of the temporary facility?
We’re looking at the temporary facility generating around US$250-300m EBITDA per year right now, which is from a temporary facility that doesn’t offer guest rooms. We’re achieving that from 42 tables and 106 slots, though in reality we’re doing the rolling $300m EBITDA from 10-15 VIP tables, having spent just $25m creating the facility. When the Grand Mariana fully opens in the first quarter of next year, our target for 2017 is $600m-700m EBITDA. We can easily double our current EBITDA based on the fact that we’re providing spectacular hotel rooms, offering 11 Michelin-starred-chefs’ restaurants, nightclubs, world-class spas and ballrooms etc.
As we build the second phase at the end of 2017 into 2018, our plan moving forward is that the next building will be ours, but as these other properties are built, this is going to be an asset-light company, whereby we have other investors building the hotels, whether they manage it themselves or have external chains like the Four Seasons to manage it for them.
We’re dealing with the players that want to experience everything that Saipan has to offer. Nothing compares to this. If you’re leaving Beijing or Shanghai and heading to Macau, or the Philippines, you’re leaving one block of buildings and heading to another. Here, it’s 82 degrees year round. And when you hear that the VIP players just love the tables and drink, and don’t care about anything else, that’s not true. Tey love the staying on the yacht, dining outdoors, fishing, snorkeling, fine dining, bringing their families - they’re loving everything about Saipan. Te fact that it’s a four-hour flight with visa on arrival means it’s more convenient, more comfortable and safer for them.
The relationship between operators and government in Macau and Singapore has often been ‘spikey.’ Is Saipan a stable environment for an integrated resort?
Te government in Saipan was facing some challenges. Te pension fund needed help. We have a 40-year monopoly license and Saipan only ever wanted to deal with one company, just one license. And while the license was a necessary measure to shore up finances, now the government has seen what we’ve done in the wider community, they know we are here to stay. In addition to the US$15m license fees each year, we
When you hear that the VIP players just love the tables and drink, and don’t care
about anything else, that’s not true. They love the
staying on the yacht, dining outdoors, fishing,
snorkeling, fine dining, bringing their families - they’re loving everything
about Saipan. The fact that it’s a four-hour flight with visa on arrival means it’s more convenient, more
comfortable and safer for them.
About Imperial Pacific International Holdings Limited: Imperial Pacific International Holdings Limited (HKEx Stock code: 1076), indirectly through its wholly owned subsidiary Imperial Pacific International (CNMI), LLC, has been granted with a 40-year exclusive gaming license on the island of Saipan, a US territory as part of the Commonwealth of Northern Mariana Islands.
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