"The Eurovegas and BCN World resorts should be marketed together"
The chairman of the planned complex in Barcelona, Xavier Adserà, explains the details of the project
Plans for the tourism, gambling and business macro resort, BCN World, which was introduced in Catalonia in response to the Las Vegas Sands Corporation's decision not to bring Eurovegas to the region, are on hold until the local assembly passes a law that will allow it to open next to Port Aventura. This approval is required before the Catalan government can start issuing licenses and before the developing company, Veremonte, can begin closing deals with investors and operators. The chairman of BCN World, Xavier Adserà, has stated that investment for the first phase is secure and, just like its projected customers, will come from Asia. If the bill is passed this fall, he explains, work will begin in the first six months of 2014 and the project will open in 2016.
Question. Does BCN World have 100-percent assurance that it will be able to open?
Answer. As long as we secure the permits required to develop the project. It depends on the law being debated in Catalonia's regional assembly, which also must decide whether it wants this project or not. After that, the [Catalan] government will provide the necessary permits and licenses for gambling and for construction in the proposed area.
Q. How will this project be financed?
The regional assembly will decide whether or not it wants this project"
A. At the moment, we are working with Asian investors who are seeking tourist destinations for Asian agencies. They want to invest in a project linked to an integrated resort concept for family tourism, which is what they are used to. Right now, there is nothing like that in Europe, and we are encountering great interest in Asia and China, more specifically, to invest here.
Q. Are you talking about Chinese investors or banks?
A. We are mainly talking about our own resources, equity, start-up capital and, in order to seek financial efficiency, part of it will be debt. But the most important part will be equity, capital that, together with the investment contributed by Veremonte, will fund the first phase.
Q. What resources does the project have in order to launch the first phase?
We are working with Asian investors who are inclined to family tourism"
A. Veremonte always works with its own resources and, for the first phase, we are talking about an investment of one billion dollars. This is what we have tied into the commitment I mentioned above. Once we obtain the licenses to start working, we will be able to close many of the negotiations in which we are currently involved.
Q. There is still a period of six months until construction begins and you only have the support of Value, Meliá and Melco-Crown. Have you closed any final agreements?
A. There are agreements subject to the granting of the licenses.
Q. Are you satisfied with the pace at which you are attracting partners?
What has been achieved in this project is more than remarkable"
A. Yes. This is a project that began a year ago, and what has been achieved is more than remarkable. Until a year ago we couldn't go public and we couldn't go out on the market with it but what we have accomplished has been quite satisfactory.
Q. The preliminary agreement with Melco-Crown does not seem to be guaranteed. The bill being prepared by the government and that the regional assembly must pass states that all licenses required to operate casinos will go to a public tender and, therefore, Melco will be starting in the same position as any other operator bidding for a license. Do you foresee any problems?
A. Hopefully not because, as the law says, if passed, the licenses will be limited to this district, and therefore there will not necessarily be any problem. Melco is a listed company on the US Stock Exchange and has a commitment to transparency. When they came here announcing an agreement, it was subject to a number of authorizations that do not exist at the moment. There is no commitment because the conditions required to operate do not exist. This is a very important point to make.
Q. Do you have a plan B? Have you contacted other operators?
It will be possible to sell both destinations at the same time"
A. There are many operators interested in the project. This will be a destination where all operators will want to be. When it comes to big operators, there are not that many. These are groups looking for growth and the existence of the only integrated resort in Europe will be an opportunity. The new destinations are very successful; the turnover in Macao is six times that of Las Vegas.
Q. The land where BCN World will be located belongs to La Caixa. Have you closed the purchase operation?
A. It has been agreed but, once again, it is subject to the granting of the licenses.
Q. Can you reveal the figure?
A. No. In any case, we believe that it will be a significant operation for La Caixa that will generate capital gains for its Foundation, enabling it to do its charity work, as well as remove assets from its balance sheet that had become inactive due to the crisis.
Q. Are the legislative changes announced to date enough? The smoking ban could be a problem in Madrid [...] and in Tarragona?
A. From the beginning we made it clear to our investors that Europe offered great advantages for this type of resort but that we have to respect the lifestyle of the people regarding health, labor relations, looking after children [...] and they understand. There are casinos in the world where people can smoke and others where they cannot; ours will be of the type where you cannot smoke.
Q. Are the tax cuts enough for BCN World? They are greater in Madrid...
A. We have always said that we would ask for what we needed to be competitive and 10 percent is just that: it attracts operators and capital. In the current environment, the revenue that the government will earn through this will be positive.
Q. Do you think there is enough room in Spain or in Europe for both Eurovegas and Barcelona World?
A. Yes. It is true that we shall be competing in certain fields, in tourism and in conventions with Eurovegas, with Barcelona itself and with other destinations. But it is also advantageous from the point of view of gambling: people may arrange their holidays to spend some time in Eurovegas and some time in Barcelona World. The distance that separates us is only two hours by high speed train, not much for an Asian tourist. It will be possible to sell both destinations at the same time. We are not going to build a hotel or a casino, we are going to build a destination and economies of scale will be positive.
Q. How many visitors do you expect in the first year?
A. The goal is to reach 6 million in addition to those coming to Port Aventura, which attracts 4.5 million, in two years. We think we will reach cruising speed in the second year.
Q. Barcelona was not happy with the use of its brand...
A. The Barcelona brand is a key aspect for attracting visitors; another issue is to obtain authorization. In any case, there is no entrenched opposition because it will benefit the city, which needs new ways of attracting more tourists.