Ceasar’s Palace announced its proposal to build a $1 billion, fully integrated resort in Manila, at the side of idle government property next to Ninoy Aquino’s International Airport (NAIA)’s Terminal 2.
Steve Tight, Caesar’s president for international development, said that the American casino giant—made bigger through a merger with the legendary Harrah’s hotel on the Las Vegas Strip—brought in foreign experts to advise on their proposals for a complete re-design of NAIA, connecting Terminals 1 and 2 via a light railway transit, and expanding the number of flights on NAIA’s existing runways.
The resort company hopes to bring in as many as 3.5 million visitors annually to the Philippines.
Tight said that by building a new control tower with advanced technology able to guide aircraft from 150 miles away (instead of the current 50 miles), more take-offs and landings can occur from the airport, allowing for more visitors.
Additional high-speed exists are also proposed for planes to immediately clear the runway after landing, to give room for the next aircraft to land or take off.
Caesar’s Palace is projecting to generate initially 20,000 jobs and to make the Philippines a major tourist destination for everyone, not just casino players.
“Macau blossomed into a behemoth because it allowed all the major global players to operate there. Each operator spent huge sums to market Macau,” said Tight, referring to the casino, entertainment, and resort haven near Hong Kong, which expanded so quickly it overtook even Las Vegas revenues. “It will be the same with the Philippines, which actually has more to offer and should be a better destination.”
In a Forbes article by Muhammad Cohen, the company’s motives to expand to Asia have been widely criticized. Cohen wrote, “In some ways, Caesars and the Philippines seem to be a natural fit…the Philippines has cultural ties with the US, as a former colony and longstanding military outpost, giving the Caesars name more significance here than elsewhere in Asia. The Philippines has also been considered a regulatory pariah. Having a US operator in Manila could stamp the Philippines as a blue ribbon gaming destination.”
PAGCOR (Philippine Amusement and Gaming Corporation), which operates gaming halls under the Casino Filipino brand, has significantly improved its once-sloppy reputation as the main gaming regulator under President Aquino. PAGCOR, Cohen said, as well as other affiliated casino companies are not too open about Caesar’s plans to partner with shareholders and rebuild on Philippine soil.
Manila already has three billion-dollar integrated resorts and even a giant ferris wheel scheduled to open over the next four years, in PAGCOR’s Vegas-style Entertainment City complex on Manila Bay. Entertainment City’s first hotel, the Solaire Resort & Casino, opened last year in March.
Rather than granting a new license for another expensive hotel and gaming complex, PAGCOR’s first priority is to see how well the new resorts perform.
“It’s flattering for Caesar’s to consider Manila,” said PAGCOR vice president for licensing and business development, Francis Hernando. “But we are also deeply honored that some of the largest business groups in the Philippines and in the global gaming community are meaningfully supporting our project.”
Caesars Entertainment is reportedly $22.9 billion in debt, and conceded insufficient cash flow to meet its debt service. In the third quarter, analysts said, Caesars posted a $908.1 million loss (compared with $761.4 million last year), hurt by higher interest expenses, a reduced tax benefit and a declining stock, and slow revenue growth at its existing casinos, such as in Atlantic City.
Moreover, along the Vegas Strip, job layoffs among the hotel’s 65,000+ employees have been looming on the horizon, as the parent company (which owns hotspots Caesars Palace, Paris, the Flamingo, and LINQ) aims to cut costs amid its severe financial challenges.
The indebted company could file for Chapter 11 bankruptcy protection as early as January next year, a close source said.
Caesars Entertainment, which owns 44 different gambling and resort properties, said formal discussions with Wall Street creditors have already begun, and the company hopes to restructure its debt and vastly improve its financial condition.
“This latest and important step further reflects our commitment to working constructively with creditors to de-leverage Caesars Entertainment, and create a path toward a sustainable capital structure in the best interest of all stakeholders,” said Chairman and Chief Executive Gary Loveman.
“Moving forward, we see several dynamics that bode well for our future, including signs of improvement in regional markets, given limited supply growth and greater traction from our investments in hospitality and entertainment offerings across our network.”
(With reports from Forbes, Wall Street Journal, News 3 Las Vegas, Philippine Star.)
(www.asianjournal.com)
(Las Vegas November 13-19, 2014 Sec. A pg.1)
