“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 existing identically named three-star hotel which was built in 2003. Donaco holds a 95% stake in the hotel, with the token remainder held by the Vietnamese state-owned Sapa Petroleum Tourism Joint Stock Company.
According to Donaco, the Vietnamese government has given permission for a maximum of 50 gaming tables at the new Lao Cai International Hotel.
The Lao Cai International Hotel has joined seven hotel and casino complex licensed in Vietnam, and acted as the flagship business for Donaco International. Located in Lao 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% compared to the period. This was driven by a 44% increase in VIP turnover at the company’s already –operational three-star Lao Cai International Hotel which comprises 34 rooms, 8 gambling tables and 36 slot machines.
However, visits to the casino declined by a marginal 3.2% 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%, but this was more than outweighed by the growth in VIP turnover, with the total table game turnover increasing by 33%.
Slot machine turnover boasted very strong growth of 122%, 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.