Melco Resorts has announced that its City of Dreams Mediterranean being built in Cyprus will seek to attract visitors from the Middle East, Russia, UK and eventually Asia to fill the gaming tables and hotel rooms at its EUR 550 million resort.
At present the tourism market in Cyprus is highly seasonal with a strong correlation between average temperatures and visitor numbers. The City of Dreams Mediterranean, therefore, will need to act as a catalyst both for new visitors and to extend the holiday season beyond the summer months.
In a January 2018 interview CEO Lawrence Ho said “Melco as a company attracts sophisticated customers, middle and upper class customers.”
The UK accounted for 34% of visitors to Cyprus in 2017, the largest share of any country. But when GBGC assessed the market a few years ago, the UK tourists that GBGC observed during a week-long visit did not have the profile of high-end, sophisticated gamblers.
Russians made up 23% of visitors in 2017. GBGC’s recent experience on other European casino projects, however, has shown that the high-end Russian consumers have been hurt by economic sanctions, particularly when it comes to buying overseas assets.
Similarly, many sophisticated consumers from the Middle East tend to visit London during the summer months precisely to avoid the heat that Cyprus offers at that time of year.
The first phase of the main resort is due to open in 2021 and the geo-political situation will have changed by then but not necessarily for the better. For example, if a Corbyn-led Labour government is in power in the UK, the threat of capital controls (which has been hinted at) could reduce UK tourists visiting Cyprus, depending on the extent of the restrictions.
The Gulf States (1% of 2017 Cyprus tourists) and China (0.1%) will have to become key markets for the City of Dreams Mediterranean in the next decade.