Russia constructing casino to court Asian tourists
Published on 31/08/2015
When people think of visiting Russia, they often go straight to images of European tourists sightseeing in the main western cities of St Petersburg and Moscow. With over 1.2 million visitors to Russia per year coming from Europe, it is easy to see why this is the case. However, the nation is attempting to break this trend by looking to the east.
In order to increase the amount of money it gains from tourism, Russia is looking to attract wealthy travellers from Asia; specifically from China, Japan and South Korea. However, the method the nation and its investors have chosen is an unusual one: a new gambling centre is being built to rival the giants of Las Vegas and Macau.
The location of this new development, near Vladivostok, makes it clear that the centre will be intended for Asian tourists rather than those from Europe. The first casino - known as Tigre de Cristal - is scheduled to open on August 28th, but after that a range of others will be constructed.
Russia's Macau
In total, between 16 and 25 'supercasinos' will be built in the region of Primorsky Krai, which is to be known as the Primorye Entertainment Zone. This was declared one of four official gambling zones by the Russian government in 2007, but several delays have meant the area has not seen significant investment until now.
In an attempt to attract more investors to the region, Russia has offered extremely generous tax rates of between three and seven per cent to casino companies willing to commit financially to the Primorye Entertainment Zone. In comparison, the same tax rate in Macau is around 39 per cent. In total, the area has already managed to net around $2.2 billion in investments.
The aim is to have a complex that attracts around ten million visitors each year. It is hoped that this will bring in around $5.2 billion annually in ten years' time, after initial takings of around $1.2 billion. This will be extremely beneficial to the construction industry, as the sheer size of the complex means that the building projects will be extensive and potentially incredibly lucrative.
The size of the complex
To get an idea of the eventual scale of the Primorye Entertainment Zone, one only has to look at Tigre de Cristal. This casino resort - which is owned by Summit Ascent Holdings, the investment company of Macau's Lawrence Ho - is the first to open, and can be taken as a good template for future supercasinos.
The first phase of the facility alone cost $172 million to build. It consists of a casino suite, a gaming floor and 121 hotel rooms. The casino area will contain five VIP gaming tables, 42 mass market gaming tables, and 759 slot machines. More than 1,000 employees will be needed to staff the facility once it is operating at full capacity.
The full casino will cost $500 million once built. Eventually, it will increase its number of hotel rooms to 621 and have room for another 100 VIP gaming tables, 70 mass market gaming tables and 500 slot machines. A shopping mall, a spa, a nightclub and several conference facilities and food and drink retailers will also be constructed as part of this second phase of Tigre de Cristal.
Attracting more tourists
This is not the only construction project Russia has planned to increase tourism from Asia, particularly from China. It was recently announced that the nation will be building a 750 m cable car line between the Russian city of Blagoveshchensk and China's Heihe. This is intended to be part of a common tourist zone that the two cities will share.
The cable car or 'ropeway' will be the first in the world to cross an international border. It is thought that it will boost tourism, which could lead to a rise in construction work in both cities.