Alphabiz - Choi Jong-hwan, the CEO of Paradise Group, announced that they plan to build a top-tier hotel in Seoul.

(Photo= Yonhap news)

[Alpha Biz= Reporter Kim Minyoung] On the 2nd, Choi Jong-hwan, the CEO of Paradise Group, announced plans to build a top-tier hotel in Seoul. During a media and investor relations event held at Paradise City on Yeongjong Island, he stated, "Major cities like London, Paris, and New York have iconic landmark hotels, but Seoul lacks a top-tier luxury hotel." He emphasized their intention to surpass existing luxury hotels in Seoul such as The Shilla and Signiel by establishing a "luxury flagship hotel." Choi mentioned that the target clientele would primarily include VIPs who travel by private jets.

The basic plans for the new hotel have been finalized. It will be constructed on Paradise Group's existing headquarters site, spanning 13,950 square meters (about 4,220 pyeong), with a 5-story underground and 18-story above-ground structure housing approximately 200 rooms. The investment is estimated at around 550 billion won, with construction expected to commence in the latter half of this year and aiming for an opening in 2028.

The initiative to expand into hotel construction comes amid the COVID-19 pandemic, which prompted Paradise, primarily known for its casino operations, to diversify its business. Choi noted, "As a foreigner-only casino, we felt the need for business diversification after three years without foreign visitors." Last year, casino revenue accounted for 85% of Paradise's total revenue.

Additionally, Paradise plans to expand its casino operations. In September, they will open a VIP-only casino for high-stakes betting on the premises previously used as a buffet restaurant at Seoul Walkerhill Hotel. It is expected to generate revenues of 22 billion won next year and 32 billion won in 2025, targeting primarily Chinese customers.

Choi attributed the company's ability to achieve record sales and profits last year to successful marketing efforts in Japan since 2022, where Paradise now occupies approximately 80% of the market share among Japanese visitors to their casinos in Korea. Looking ahead, they plan to focus on the Chinese market, anticipating an increase in Chinese visitors.

Despite achieving record performance, Choi mentioned that the company's price-to-book ratio (PBR) remains below 1, indicating undervaluation. He outlined plans to enhance shareholder-friendly policies such as dividend increases and share buybacks to raise the target share price to 22,000 won. Paradise expects annual sales of 1.1708 trillion won this year, projecting 1.2467 trillion won in 2023 and 1.3226 trillion won in 2026.

Alphabiz Kim Minyoung Reporter(kimmy@alphabiz.co.kr)