* Fosun to fund $1.6 bln project construction
* Atlantis Sanya hotel to be Kerzner's first in China
* Hainan seen as place where China could allow casinos
By Farah Master
HONG KONG, Oct 10 Chinese conglomerate Fosun
International Ltd and South Africa's Sun City casino
king plan to build a $1.6 billion resort on China's Hainan
holiday island, joining a pack of players betting on a surge in
upscale tourism in the country.
Long touted as a place where China could liberalise casino
gambling, the balmy island off the country's southern coast has
attracted scores of international developers in the past two
years, including InterContinental, Starwood, and
casino operators MGM Resorts and Caesars Entertainment
The latest Hainan project, an Atlantis brand hotel in
southern coastal city Sanya that Fosun will jointly develop with
tycoon Sol Kerzner's company, will not include a casino, Kerzner
chief executive Alan Leibman told Reuters in an interview.
"We have been very successful with and without gaming within
our business. It is nothing we have anticipated in why we are
building Atlantis" in Hainan, Leibman said.
The executive put the cost of the project at "about $1.5
billion" in the interview, while Fosun and Kerzner said in a
joint statement that Fosun will invest "over 10 billion yuan
($1.63 billion)" in the project.
Casino gambling is illegal in China outside of the former
Portuguese colony Macau, an hour's flight from Hainan by plane.
Earlier this year, the local government shut down a casino bar
that had been operating illegally in Hainan after a Reuters
report drew attention to it. The bar has
reopened now, according to a hotel employee.
While Chinese authorities have maintained an official ban on
gambling in Sanya, tourists continue to flock to the southern
island. Over 22 million overnight stays were registered in
Hainan in the first eight months of the year, most of them by
Kerzner, which operates the Atlantis casino resort in the
Bahamas and Atlantis hotel on Dubai's artificial Palm Island,
said the 62-hectare resort in Sanya, close to half the size of
London's Hyde Park, will feature a luxury 1,300-room hotel.
Developed by South African tycoon Sol Kerzner, who built the
Sun City empire in 1979, the Atlantis brand is known for
extravagant attractions, including a six-storey water slide
through a shark aquarium and underwater hotel suites.
The Atlantis Sanya, scheduled to open in 2016, comes at a
time when Sanya already has more than 200 hotels and an
aggressive pipeline for future developments as local authorities
seek to tap into the growing upmarket tourism business in China.
The Atlantis Sanya will be Kerzner's first in China and
targeted mainly at local clientele. Designed as a sleek
dorsal-shaped building, surrounded by lush greenery, lagoons and
marine attractions beside the ocean, the resort will employ more
than 3,500 staff.
Haitang Bay, a 22 kilometre strip of white sand where
Atlantis will be located, will see the development of 30
five-star hotels in the next five years.
The expansion of lavish resorts targeting affluent travelers
from Asia including China is taking place at a rapid pace around
Macau has more than seven mega casino resorts under
construction. Neighbouring countries such as the Philippines and
Vietnam are developing large-scale integrated resorts, while
China's Hengqin Island in southern Zhuhai province across the
water from Macau is preparing to open the first phase of a $5
billion marine-themed hotel resort in November.
The total construction cost is expected to be around $1.5
billion, the same as Kerzner's Dubai property and will be
financed by Shanghai-based Fosun, Leibman said.
Kerzner, which signed a $145 million loan refinancing in
March this year to help reduce costs and extend its debt
maturity profile to five years, will take on a management role.
Fosun, headed by Chinese billionaire Guo Guangchang who
started the conglomerate with friends from university, has more
financial power and is in the process of finalizing a takeover
of French company Club Med, pending regulatory
approval. The company has said it is keen to invest in
businesses that give the group exposure to the Chinese consumer.
Partners with U.S. buyout giant Carlyle Group on
China investments through a 50-50 joint venture, Fosun's
divisions also include property, pharmaceutical, insurance and