The hotel at billionaire Lawrence Ho’s $500 million Tigre de Cristal casino resort in Russia’s farthest eastward facing corner is filled to capacity on weekend nights, but that’s not necessarily a good thing. Analysts say the hotel’s limited lodging capacity is preventing the property from attracting big spenders.
According to the development’s latest financial results released on Thursday, Tigre de Cristal finally reported an operating profit in 2016, albeit a relatively measly one of $71,454. But that’s still a turnaround from 2015, when the resort lost $11 million.
Gaming analysts say sluggish (ahem, nonexistent) development in Vladivostok on the part of Tigre de Cristal’s expected neighbors has strained the capacity of Ho’s hotel. Impatient Russian officials in Moscow took control of the Primorsky Krai special gaming zone in July after widespread criticism of development inactivity.
Ho is moving forward with phase two of development at Tigre, despite his resort’s unwanted monopoly. The $500 million project will add 500 hotel rooms to its current 121-room tower, as well as new retail space, a food court, and an expanded casino floor. The construction is scheduled to be completed in late 2019.
Russia aims to transform the Primorsky area into its version of Las Vegas or Macau. The gaming zone is located in a remote area about 30 miles north of downtown Vladivostok, and is one of four regions that the government approved in 2009 for legalized gambling and the development of up to seven casino resorts.
However, that vision has yet to materialize. To push development forward, Russia has begun taking back land from in cases where the officials believed developers weren’t moving fast enough with investments.
Located just 13 miles from Vladivostok International Airport, the casino enclave is less than a three-hour flight to some 300 million people. Primorsky will target areas in northeastern China, Japan, and South Korea for finding its first wave of customers, once it has enough rooms to accommodate customers.
Construction began in June at the Selena World Resort and Casino, a project bankrolled by a Russian-Asian investment partnership. However, the casino floor and 295-room hotel there likely won’t be ready before 2020.
In the interim, nearby non-casino hotel projects could allow visitors to stay in the region overnight. Daiwa, a global investment banking firm, said 180 hotel rooms within a 20-minute drive of the gaming zone are expected to begin taking reservations next year.
As of Aug. 1, foreigners from 18 countries, including China, Japan, United Arab Emirates, and Singapore, can obtain a visa upon arrival in Primorsky. Passengers simply need to e-file at least four days before their trip, and upon arrival at the Vladivostok airport, will receive visas valid for 30 days.
While giant casino resorts have been slow to develop, and Vladivostok’s “strip” still looks like mostly barren land, the Russian Bear remains bullish on the land’s prospect, and is trying to encourage investment.
Unlike China, which restricts how often its own citizens can travel to Macau, Russia has no limits on how frequently visitors from those 18 countries, or its own citizens, can travel to Primorsky.