Silver Heritage Group, a renowned gaming operator in Asia, has been operating an international class casino The Millionaire’s Club and Casino at Shangri La Hotel in Kathmandu. The group’s latest offering is the Tiger Palace Resort. Located in Bhairahawa, the integrated entertainment destination had its grand opening in March of this year. The luxury property’s General Manager Brett Model is an executive with over 15 years of experience in the Asian resorts and casinos sphere and has executed multiple resort openings in China, Macau, Vietnam and Bhutan. He sat down with Madan Lamsal, Editor-in-Chief of New Business Age to talk about the opportunities and challenges in operating a USD 52 million resort in Nepal. Excerpts:
What are the key features of Tiger Palace Resort?
The 100-room property covers over roughly 18 bighas of land. It’s the largest integrated resort in Nepal with the largest casino swimming pool in the country. We are a full-scale entertainment venue with many layers of experience. We have something to offer to every family member visiting the Tiger Palace Resort as guests. Moreover, at USD 52 million, it’s the largest investment in terms of tourism in Nepal. We have plans to build additional rooms on the property and we aim to expand within Nepal.
What clientele are you targeting?
At the moment, the majority of our guests are from India. But with time this will change. We are looking forward to the opening of the new airport in Bhairahawa. It will have a significant impact on Bhairahawa, Butwal and the entire Rupandehi district and it will influence our business as well, in terms of what it does in bringing in international visitors. So we are looking to receive visitors from all over Asia. While India is important to us in terms of our casino business, if you look at the resort itself, we are seeing many Nepali guests from Butwal, Bhairahawa and people from Kathmandu. We recently hosted Nepal’s largest pool party, and that crowd was from the country’s capital. Actually, since we began operation in September 2017, we have been fortunate to receive over 100,000 guests at the resort. With over 500 local staff, we are happy to be present here.
We want to support the local economy, which also means supporting the local tourism industry.
What are your major income sources and your expectations in terms of Return on Investment (ROI)?
The success of our business model is based on the success of the casino. Recouping a USD 52 million investment will not happen by selling rooms and selling food and beverages. However, we are event-driven as well. We are a wedding destination and are seeing great interest from locals and Indians to have weddings at the property. We constantly do things to remind ourselves and to remind the local community we are here to support the country’s tourism.
In terms of the ROI, it’s difficult to say at this stage as the Tiger Palace Resort is a new hospitality property. It is a massive investment which will take time to get the returns. I can’t give an exact figure per se but we hope as the conditions of the roads improve, as the airport opens, we will also benefit and gain returns and reinvest the money in Nepal.
What has been your experience as a foreign investor in Nepal?
This is an emerging market and Nepal is a developing country. Therefore, in terms of opportunity, there is a lot of potential here for foreign investment to come in and grow together with the country’s economic development.
That being said, with opportunity comes challenges. As exciting as it is to be a part of that opportunity and grow with Nepal, it’s also a daunting and challenging exercise on a daily basis. Issues related to work permits are one of them. It took six months to secure work permits for foreign employees. And considering it’s a USD 52 million FDI in Nepal, you would think it would be a smooth process. You would think the government would want to facilitate and welcome the investment. Instead, it was very challenging, and we faced many hurdles to acquire those work permits.
Another major challenge we see is the local corruption, particularly in the police department. On a personal level, what is most upsetting is that you have areas in Nepal where children from poor families are starving because there’s no food and in stark contrast to that we have senior police officers coming into the hotel and ordering meals to feed their staff without paying. We have these sorts of issues every week and there’s no one to complain to. Everyone seems to be too busy or doesn’t want to get involved or, doesn’t care.
Have you gone to Kathmandu and lodged a complaint in writing?
If the government wants to develop the tourism industry, it must realise that it’s a two-way street. It shouldn’t be just us voicing our complaints. It should be the government asking ‘Hey, how are you doing?’ Not only is it the professional thing to do, but it’s also the respectful thing to do. We have invested heavily here and we want to be successful with Nepal. The government should also want us to be successful. The only way FDI will continue is if other foreign investors see successes. But if they only see challenges and frustrations, they will invest somewhere else.
Have you found any supportive aspects here at all?
There are areas that have been helpful and encouraging for us. The Nepal Tourism Board (NTB) is an example. We have worked well with NTB. There are people who have helped us on a high level, and we have had some great meetings. However, we find that most times, the words aren’t translated into actions and implementations. We have noticed that there’s a lot of talk in Nepal, but it’s not always backed up by actions. But I have hope and believe that things will improve. I have to believe in myself, in my team and ultimately in the country.
Are you facing any political type of disturbances from local organisations?
We haven’t faced any political disturbances but the recurring strikes affect us. I wish the government would be more involved in protecting investments like ours and also the people. It is very unfortunate when people can’t go to work. And it’s terrible that guests can’t come to visit us. It has affected our business and has affected the local economy as well. Ultimately, it impacts the people working on our property because they are earning on a salary basis and also on service charges. So, if we don’t have guests visiting the property, the locals aren’t able to earn money and can’t reinvest it into the local economy. Nepal is great at punishing itself; the only people they hurt are themselves.
What are your expansions plans?
It’s an evolving business and we are constantly making improvements every day. I’m a firm believer in initiating projects and pushing innovations to improve the physical property as well as enhancing the skills of the people working with us. The two most important things in this business are the product and the people. If we can make improvements to the infrastructure and develop the hotel in the physical sense, that’s fantastic. But we also need to improve our people through training, exposure to guests and to different cuisines. We are looking to add a further 200 rooms to the property. We will also continue to host events that are entertaining to an entire family. We have also recently acquired some land in Jhapa and its proximity to India and Bangladesh is exciting for us. We believe it will be another successful project and a great opportunity for Nepal to develop that part of the country.
Nepal has not been able to attract high-end tourists. What is your take on that?
I was once with Bhutan’s royal family while working there and we talked about tourism. I asked why they charge the USD 40 for visa fees. The response I received was ‘we don’t want to become like Kathmandu’. If you want the high volume business, then you have to be prepared to take the bad aspects that come with that and if you want the high-end business, then you have to be prepared to decrease the volume. High-end tourism will develop as more 5-star properties like the Tiger Palace Resort come to Nepal. There will be a shift towards the high-end tourism market.
Anything else you would like to add about the Nepali tourism sector?
I think the outlook for tourism in Nepal is extremely positive. It’s a wonderful time to be here and I believe more 5-star properties will come here. Nevertheless, the government needs to be mindful of the challenges a property like ours faces now and there should be more interactions to learn and gain experience so hospitality businesses who will invest here in the future can have a smooth time.