City of Dreams in Sri Lanka, the new flagship destination for gaming and luxury

With the opening of City of Dreams in Colombo, Sri Lanka is entering the ranks of the world’s leading luxury tourism and gaming destinations. Backed by a strategic partnership between Melco Resorts & Entertainment and John Keells Holdings, this colossal $1.2 billion project aims to transform the region in the same way that Macau did for China.

Is Colombo the new entertainment capital of Asia? That is the clear ambition of the developers of City of Dreams Sri Lanka, which opened last Saturday in the capital. The result of a collaboration between global casino giant Melco Resorts & Entertainment and Sri Lankan conglomerate John Keells Holdings (JKH), this $1.2 billion integrated resort is billed as the first of its kind in South Asia. It is a bold but strategic move at a time when Sri Lanka is trying to reinvent itself as a tourist destination after a severe economic crisis.

A monumental project to revive the country

Located in the heart of Colombo, City of Dreams is already the largest private investment in the country’s history. The complex includes two luxury hotels – including the 687-room Cinnamon Life – a 16,700 m² casino, and a wide range of bars, restaurants, clubs and leisure facilities. In addition, it boasts the port’s largest conference centre, capable of accommodating up to 5,000 participants.

The second phase, recently completed, added the prestigious Nüwa Hotel (113 rooms) and the official opening of the casino, designed to the highest industry standards. 

Strategic geographical positioning

Sri Lanka’s geographical advantage has not escaped investors. Located less than a four-hour flight from key markets such as India, China, Southeast Asia and the Middle East, the country could become a nearby alternative to Macau or even Singapore. Melco Resorts, which already operates resorts under the same brand in Macau, the Philippines and Cyprus, sees this as a unique opportunity to replicate its model in a new, untapped market.

Lawrence Ho, CEO of Melco, spoke at the opening: 

‘This project is more than just a luxury resort. It is about helping to raise Sri Lanka’s international profile and strengthen its tourism economy.’

Opening marked by optimism

The initial signs are encouraging. Since the partial opening of Cinnamon Life last October, bookings have risen sharply, according to JKH. With the winter high season approaching, forecasts point to record visitor numbers. 

This momentum is being reinforced by the upcoming extension of the free visa policy to 40 additional countries as part of the post-crisis economic recovery in 2022.

Strategy inspired by Singapore

Like Marina Bay Sands and Resorts World Sentosa in Singapore, Colombo’s City of Dreams aims to create a complete ecosystem combining business, leisure, gaming and culture. JKH is banking on the knock-on effect of this infrastructure to attract high-value visitors and boost the urban economy.

For John DeCree, an analyst at CBRE Equity Research, the project is an innovative model of lean investment for Melco, which could be replicated elsewhere if it proves successful. However, he warns that it will take time to gain momentum, as the local market has never seen anything like it before.

A ‘small bet’ with huge potential

Melco has invested approximately $125 million in the development of the casino, a ‘small bet’ according to Lawrence Ho, but with the hope of annual gross revenues reaching $250 million. A potentially rapid return on investment, especially since the operator has obtained a 20-year operating licence from the Sri Lankan government.

Melco’s contribution is not limited to financing. Its expertise in management, international marketing and loyalty programmes gives City of Dreams an immediate competitive advantage. As JKH points out in its annual report, this alliance is a testament to confidence in the country’s tourism potential.

Sri Lanka, the future hub of Asian gaming?

The positioning strategy of City of Dreams is clear: to make Sri Lanka to India what Macau is to China. A challenge commensurate with regional ambitions. India represents a huge market waiting for opportunities abroad.

Lawrence Ho concluded: 

‘City of Dreams is a symbol of possibility. A celebration of Sri Lanka’s potential as a global destination.’ 

If forecasts are confirmed, Colombo could well become a hub for luxury tourism and gaming in South Asia, consolidating its status on the international stage.