Donaco delight at new Lao Cai casino

Australia’s Donaco has boasted good returns on its existing Lao Cai International Hotel – photo Duc Thanh

“This will allow the company to open its expanded five-star hotel and casino complex on schedule,” a company statement announced, adding that the soft opening of the new property was set for May 19 this year.

The five-star hotel and casino Lao Cai International Hotel will comprise 428 rooms and be located near the existing identically-named three-star hotel which was built in 2003. Donaco holds a 95 per cent stake in the hotel, with the token remainder held by the Vietnamese state-owned Sa Pa Petroleum Tourism Joint Stock Company.

According to Donaco, the Vietnamese government had given permission for a maximum of 50 gaming tables at the new Lao Cai International Hotel.

The Lao Cai International Hotel joined seven hotel and casino complexes licensed in Vietnam, and acted as the flagship business for Donaco International. Located in Lao Cai city, which borders China’s Yunnan province, Donaco anticipated most of the casino’s clients would be cross-border visitors from China.

Donaco managing director and CEO Joey Lim on the release of the company’s annual financial report in March claimed the level of demand for gambling at the Lao Cai International Hotel had given the firm “great confidence in the success of our new 428 room, five-star property.”

According to the financial report, the company’s operating revenue for the six months ending December 31, 2013 increased 100 per cent compared to the previous corresponding period. This was driven by a 44 per cent increase in VIP turnover at the company’s already-operational three-star Lao Cai International Hotel which comprises 34 rooms, eight gambling tables and 36 slot machines.

However, visits to the casino declined by a marginal 3.2 per cent, primarily as a result of bad weather which reduced the number of walk-in customers. In September 2013, heavy rains caused a temporary closure of border crossing from China, and in December 2013, snow blanketed the highlands surrounding Lao Cai.

Donaco explained their growth was driven by an influx of higher spending VIP customers, reflecting the success of the company’s ongoing junket marketing programme. Due to the decline in walk-in customers, mass market turnover declined by 15 per cent, but this was more than outweighed by the growth in VIP turnover, with the total table game turnover increasing by 33 per cent.

Slot machine turnover boasted very strong growth of 122 per cent, primarily due to the introduction of 12 new machines in February 2013. These have proven to be far more popular with customers than the 24 older machines, which remained in operation.