◆ Three consecutive months of over 600 billion won in revenue; Q2 revenue reaches 192.6 billion won
Lotte Tourism Development announced on July 1 that the casino (net revenue) and hotel (separate basis) segments generated 64 billion won in revenue last month, a 29.4% increase from 49.4 billion won in the same period last year. With this, Dream Tower has maintained over 600 billion won in revenue for three consecutive months since April, totaling 192.6 billion won in the second quarter, surpassing the previous record of 185.5 billion won set in the third quarter of last year.
The growth trend is also evident in the first half of the year. Following a strong first quarter, Dream Tower has shown a clear upward trajectory in the second quarter. Market analysts expect that the second quarter revenue will significantly exceed the break-even point (BEP), leading to a substantial increase in profit margins compared to the previous year.
◆ Casino hold rate rises to 22.1%; long-term foreign guests contribute
The growth of the Dream Tower casino, a key revenue source, has driven overall performance. In the second quarter, net casino revenue reached 147.088 billion won, a 33.7% increase from 110.038 billion won last year. The number of visitors for the quarter was 182,872, up 23.2% from the previous year, and the table drop amount (chip exchange amount) also rose by 11.1% to 637.498 billion won compared to the previous quarter.
Notably, profitability indicators have improved. The average hold rate for the quarter (the percentage of the total table amount won by the casino) increased to 22.1%, up 4.7 percentage points from 17.4% last year. This figure is approaching the average hold rate of 25.1% for the nine large integrated resorts in the Cotai area of Macau, which is considered among the best in the world. A representative from Lotte Tourism Development stated, "The increase in the average number of open tables due to expanded Jeju routes and the rise in long-term foreign VIP guests staying over a week have contributed to the improved hold rate."
◆ Grand Hyatt Jeju sees 77% foreign guest ratio; synergy between casino and hotel
The hotel segment (Grand Hyatt Jeju) has also shown solid performance, bolstered by the influx of international tourists. Hotel revenue in the second quarter reached 45.478 billion won, a 10.7% increase from the same period last year. The number of rooms sold was 128,600, with an average occupancy rate of 88.3%.
The proportion of foreign guests among total sold rooms reached 77.3%. In June alone, this figure rose to 78.2%, with casino customers occupying an average of 833 rooms per day, a 14.2% increase from the previous year. More than half (52.1%) of the total rooms were filled by casino-linked guests, demonstrating the synergy of the integrated resort model where the hotel and casino drive each other's revenue.
◆ High fixed costs in integrated resorts; significant increase in operating profit expected
Financial analysts are focusing on the second quarter results due to the strong operating leverage effect. Both the casino and hotel are capital-intensive businesses with high fixed costs. Once revenue surpasses a certain level (BEP), the majority of the additional revenue accumulates as operating profit, excluding marketing expenses.
In fact, when Dream Tower recorded 185.5 billion won in revenue in the third quarter of last year, Lotte Tourism Development's consolidated operating profit was 52.9 billion won, with an operating profit margin of 28.4%. The second quarter revenue of 192.6 billion won is 7.1 billion won higher than that figure. Simple calculations suggest that the quarterly operating profit is likely to exceed last year's record, and the cumulative operating profit for the first half of the year is expected to surpass market forecasts.
Additionally, the second quarter will also reflect the performance of cruise ship operations in the travel sector. A representative from Lotte Tourism Development stated, "With the strong performance in the first half and the onset of the summer peak season in the second half, we expect this year's annual results to also reach an all-time high."
* This article has been translated by AI.
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