With a multi-billion dollar casino project already in motion, hopes are now high in the tourism industry that Phu Quoc will turn into a resort island that can compete against regional destinations.
Foreign investors were last week given the green light to develop the project on the southern island. The government this time decided to be selective: it set the minimum investment requirement at US$4 billion.
At least 10 investors have shown their interest in the project, despite the large amount of money required. Foreign investors will have to go through a bidding process later this year and must prove their financial capacity. The duration for the casino operating license is expected to be 30 years.
A source close to the matter told Thanh Nien that a Singaporean investor has already gained front-runner status. If this investor wins the bid, it’s likely that the project will be similar to the casino, resort and entertainment complex in Singapore, the source said, without giving the investor’s name.
The decision to kick-start the casino project came less than three months after the government announced big plans for Phu Quoc.
A site of 135 hectares in the island’s northeast has been put aside for a casino and resort complex. The 30,000-square-meter casino will have 2,000 slot machines and 200 to 400 game tables. The complex will have five or six five-star hotels with a total of 3,000 rooms.
The government plans to make Phu Quoc a special administrative and economic region by 2020, separating it from Kien Giang Province to which it now belongs. The goal is to turn the island into a top trade and tourism center of the region, with 10 million arrivals by 2020.
Experts think a casino complex could help realize that goal.
Jenny Goh, a Malaysian expat operating a travel agency in Ho Chi Minh City, said casinos have brought many tourists to her country and Singapore.
Malaysia’s Genting Highlands used to be difficult to get to and had very few hotels in the 1960s. A casino complex changed everything, putting the locality on the world’s travel map, Goh said.
Many hotels in Vietnam have gambling for foreigners now but they are too small to make an impact, she said.
Malaysia and Singapore have both successfully cashed in on the booming casino industry because their casino resorts incorporate a wide range of services and entertainment with good infrastructure, Goh said.
Nguyen Ngoc My, an overseas Vietnamese investor, said Phu Quoc does not have enough facilities and services to back a casino complex. Right now everything from transport to dining and entertainment on the island is poor, he said.
Singapore could make it work because tourists, after gambling, can engage in shopping and entertainment or use high standard medical services there, My said.
If Vietnam is to build a casino resort in Phu Quoc, it’s necessary to have a comprehensive plan to make sure the local tourism industry can really benefit from the tourists coming to gamble, he said.
Nguyen Van Hon, deputy director of an agency overseeing investment for Phu Quoc, said both local and central governments are trying to improve tourism infrastructure for the island.
Hon said a new international airport is set to open in early 2013 while a north-south road and a route around the island will also be completed by then. Transport infrastructure is expected to be ready for the casino resort by the time it gets going, he added.
Though popular as a tourist destination, Phu Quoc is still a fairly unspoilt island. Even electricity supply is not stable as it still depends on diesel-powered plants. The government in June approved an $87.5 million undersea power cable project that aims to solve the problem.
Nguyen Van Nhuong, chairman of Bai Thom Commune, where the casino will be built, also has great hopes from the project.
The poor area has a population of 5,000, and around 75 percent earn their living from catching and selling seafood and growing pepper.
Nhuong said the casino resort can become a magnet for other projects, creating more jobs for locals.
Hon said the island bears a strong resemblance to Singapore, geographically, and could be developed in the same manner.
He said Vietnamese officials are impressed with the Southeast Asian neighbor in how it has managed the casino resort, and they plan to pursue the same model in Phu Quoc.
But Robert Tan, a Singaporean business consultant, said if the casino on Phu Quoc is similar to others in Cambodia, Malaysia, the Philippines and Singapore, it will face tough competition.
These countries are sharing the same tourist demographic and more casinos mean falling profits for each of them, he said.
However, Tan still believed Vietnam’s tourism could benefit a lot from the project.
The investor of the casino would have to promote it heavily around the world and that’s also a promotional boost for Vietnam as a tourist destination, Tan said.
Casino tourists are generally wealthier than others, which means Vietnam can also attract higher revenues, he added.
My, the overseas Vietnamese investor, said foreign tourists are not the only ones the casino could target.
He said the Phu Quoc project is appealing to many investors also because they anticipate a legal change that may allow locals to gamble in casinos. They are looking at a future market of 100 million people, he said.
My said Vietnam may follow Singapore by requiring locals to pay a fee before allowing them to play at a casino. This can help prevent a large amount of money being taken out of the country by locals for gambling, he added.
The casino industry and gambling had been frowned upon for a long time until the government approved a Vegas-styled casino resort in 2008. The $4.2 billion Ho Tram Strip, around 80 miles southeast of Ho Chi Minh City, includes two casinos and five hotels.
The first phase of the project is slated for opening in 2013 and construction is reported to be well under way.
The country now has four casinos, all in the northern region, but they are small. The Do Son Casino in Hai Phong in particular targets Chinese players, and experts said it has not contributed much to the city’s tourism industry.