City of Dreams Mediterranean
Integrated resorts are a proven success wherever they are built. The U.S., Australia, and many countries in Asia can attest to their ability to create employment, generate massive tax revenues and increase tourism in quantity and quality. Why, then, have there been no IRs built in Europe, a continent that could surely appreciate those benefits? There have been no shortage of proposals, with many European countries floating the idea, but it has never come to fruition.
Why? The answer is often convoluted and includes politics, corruption, tradition, and often a lack of commitment to the process.
But all that is about to change in 2023. The first European IR will open in Cyprus. It’s been a five-year effort, and the Asian gaming company, Melco Resorts & Entertainment, is poised to open City of Dreams Mediterranean in the second quarter of the year.
Even before opening, COD Mediterranean seems to have reawoken interest in IRs in other countries.
In Greece, a plan to create a master community at the former Hellinikon airport that includes an integrated resort appears to be moving forward. Hard Rock International is the partner (replacing Mohegan Sun) with the GEK TERNA Group and construction is under way for a possible 2026 opening. The property promises a five-star hotel, premier convention and meeting space, a large entertainment component, world-class food and beverage and unique outdoor spaces.
In Spain, the Cordish Companies, known for its “Live!” gaming and non-gaming developments in the U.S., has reached an agreement with the small town of Torres de Alameda, east of Madrid.
The mayor of Torres de Alameda, Carlos Sáez, is fully behind the project, which will feature a variety of attractions including several smaller casinos, hotels, shopping areas, meeting and convention space, restaurants and much more. Sáez insists that Cordish is “in love” with the town and fully committed to the project.
But it will take more than the approval of the mayor of Torres de Alameda; it will require the OK from the Community of Madrid, a regional organization that rejected the first Cordish proposal for “EuroVegas” in 2017 because it was too “American” and failed to promote the Spanish culture. Cordish is hoping this time will be different with one of the attractions being the world’s largest flamenco table. The project will cost an estimated $2.36 billion with profits of over $4 billion projected within the first five years.
But with no timeline, the Melco project will get a long head start.
Grant Johnson, the property general manager for City of Dreams Mediterranean and Cyprus Casinos, tells GGB he thinks the company’s relations with the Cyprus government was the reason Melco was chosen.
“It takes a unique set of circumstances to make an integrated resort happen,” Johnson says. “Melco is always looking for growth opportunities, and I think in Cyprus, we finally found an opportunity where it was a destination that had a good base of tourism with a good location and potential to grow that tourism number. And more importantly, Cyprus was a government that seemed very interested to bring an integrated resort to the market.
“Europe is a complicated place with lengthy and complex regulatory processes, and it was a long time coming for this type of integrated resort, but it was a good match between our objectives and Cyprus.”
Johnson explains that Cyprus was looking to upgrade and increase its visibility by approving an IR.
“Cyprus has a small population of 1.2 million and competes with the tourism offerings of the Mediterranean—Greece and the islands off Greece, Southern France and Italy, and other places,” he says. “I think Cyprus is under-recognized. So they were looking to put themselves on the map a bit more for its blue water, beautiful beaches, 320 days of sun, and a mix of various cultures. There are Roman, Greek and Turkish influences. So it’s a unique place, and I think they were looking for new ways to help market themselves. And the integrated resort will do that.”
One of the issues Cyprus wanted to address was an expansion of the season, according to Johnson.
“It’s very much a summer market,” he says, “a seasonal market. So they were really looking to make us a year-round destination. With an integrated resort, you bring in the MICE business in the winter, alternative entertainment, and we’ll fill this place with content. It just enhances the offering.”
Four years ago, Melco began to open satellite casinos across the Republic of Cyprus, and four are open today. Johnson says they’re typical “locals” casinos.
“It’s a very much core local clientele of repeat visitation,” he says, “a nice base of business that we can start with here, but we need to grow that international space as we go. There were no casinos here prior to us operating in the Republic of Cyprus. There’s some in Northern Cyprus, but we had to basically build up a local casino operation team. We hired almost all of our dealers locally and trained locally. They will move up to supervisors when COD Mediterranean opens.”
As for that international visitation, Johnson says it will rely heavily on Israel and the surrounding Gulf states.
“In the summers there are 30 flights a week from Israel,” he says. “And that drops down to about 10 per week in the winter months. And then you go to the Gulf countries, which are also big for us. So the Gulf countries, and then Pan Europe and sprinkle a little bit of North Africa in there as well. And then we’ll see what happens with the conflict in Ukraine. Russia used to account for about 20 percent of the visitation to Cyprus. Not so much anymore, but longer term as Russia comes back, I think that will be in the mix as well.”
Another target for Melco is the tour operators who run excursions throughout the Greek Islands over the summer season. Johnson says extending these relationships is a priority for COD Mediterranean.
“We hope to work with over 90 tour operators by the time we open; we’re slowly starting to sign contracts,” he says. “There’s an existing tour operator business that now we’re tapping into. We think our product adds to this. We’re now going back and having to be a bit more aggressive with our partnerships and to push a little bit more on the off season, because that’s something where traditionally the tour operators haven’t come to Cyprus. So that’s where the Ministry of Tourism gets involved, and it’s working with the airlines together with tour operators and trying to develop off-season content.”
Melco made a commitment to the government to first hire Cyprus citizens, and Johnson says they are fulfilling that commitment. But he also notes that they’ve had to reach farther afield to fill some positions.
“We have 700 colleagues now that are employed through our satellite operations but we’re hiring another 1,800 as we get to COD Mediterranean,” he explains. “And we’re struggling, to be honest, to find enough locals within Cyprus, which is our priority. So we’re looking now across Europe and even non-EU countries.”
Johnson is confident not only that they’ll be well staffed for the opening, but that the Melco corporate culture will keep them engaged.
“As you know, that’s in our DNA, and it starts with Chairman and CEO Lawrence Ho and then trickles down to all of us. Melco has always been a global leader in hospitality with service, and we just moved it to Cyprus and applied it here. There are some adjustments, of course, as you get into a local market because you want to adapt to the local culture. But that’s really our strength as we come in, because there are probably hundreds of hotels throughout Cyprus, but what we’re bringing is the Melco global standard of hospitality.
“We’ve got 97 Forbes stars, and 7 Michelin stars we have now, but they are special here, and that’s actually helping us recruit.”