NUSTAR Leans On Local Demand While Rebuilding VIP Business

NUSTAR Resort & Casino in Cebu is continuing to depend heavily on domestic play as it works to rebuild its VIP and junket business, according to chief operating officer Sean Knights. He said the integrated resort’s casino mix remains led by the local market, while mass play continues to deliver the strongest margins.

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Local Market Still Dominant

Knights said NUSTAR leans heavily into the local market, with just under 80% of visitation coming from locals. He added that another 15% is domestic, while the final 5%, in terms of visitation rather than spending, comes from international markets. He also noted that some guests who are from Cebu but hold foreign passports are classified as locals by the property.

The resort, which opened in May 2022 on the Philippine holiday island, has positioned itself as an important addition to Cebu’s tourism offering. Knights said the segment mix at the integrated resort is around 60% mass and 40% VIP, describing that as a healthy balance because the mass market supports the property’s margins. He said junkets remain important, but they tend to squeeze margins for gaming resorts.

Junket Rooms Return

There are 180 gaming tables and 830 slot machines on the casino floor, as per Knights. According to him, NUSTAR has been rebuilding its junket program as two of the major junket operators have moved out of the local market during the past year. New junkets have now come up as well. He added that the company will continue bringing in more.

Knights also said the resort has 2 other junket rooms that are empty and available for expansion, although he believes the current setup is enough for the property’s present needs. He said junket gambling depends on scale, explaining that operators need sufficient revenue to justify the cost while also having enough players to reduce hold volatility.

Trevor Hammond, senior vice president for gaming and IR operations, said NUSTAR currently has 5 junket rooms in operation. He added that South Korean patrons make up the bulk of VIP customers, while the group also conducts direct VIP operations supported by casual agents both locally and overseas.

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Markets Under Review

Knights said the property has made progress in exploring international markets, although some policy changes take time before they have an effect. He pointed to the Philippines’ visa-free policy for Chinese travellers, which took effect on 16 January and allows Chinese nationals to enter and stay in the country without a visa for up to 14 days.

He said marketing for such measures should begin early because it can take 3 to 6 months to see any impact. For China, he said the benefits would normally begin to show around mid-year or into the early third quarter, although he added that the current environment is not normal and is changing quickly because of the conflict in the Middle East. That, he said, could delay any upside.

Table Play And Growth Focus

South Korea remains an important feeder market for Philippine gaming, Knights said, while India is seen as a longer-term opportunity if direct air links are established. He said NUSTAR is focusing on markets that are showing growth and also looking to engage with Macau more forcefully, which he said is driving a large part of the resort’s recruitment effort.

The property is also evaluating smart tables, although Knights suggested current volumes may not yet justify the investment. He said such systems offer detailed operational data and improve gaming integrity, but their immediate relevance is greater in international markets.

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Source: GGR Asia