Crown calls for upgrade of tourism infrastructure
Unveiling a 22.9 per cent fall in full-year profit to $395.8 million, the owner of casinos in Perth, Melbourne, London and Macau is set to splurge billions on a new gambling-hotels facility at Barangaroo, while also participating in a government review to build a casino in Brisbane.
But Mr Craigie said more needed to be done to polish up the nation's tourism and entertainment infrastructure if it wanted to gain a larger share of the huge middle-class Chinese holiday market.
"It's going to be a lot about the ability to get that middle-class Chinese tourist to come to Australia," Mr Craigie said.
"Visas become important, direct flights, what's the airport experience, what's the accommodation like, the restaurants ... language skills of staff servicing those markets.
"That middle to upper Chinese tourist market, which every country in Asia and around the world is chasing, gets back very much to what are the competitive fundamentals of your tourism industry."
Crown is hoping to play both sides of the tourist battle through its 34 per cent investment in Melco Crown Entertainment, the operator of the City of Dreams casino resort in Macau, and its casinos in Australia.
But its portfolio had mixed results for fiscal 2013 as VIP high rollers were scarce in Macau following the changeover in Chinese leadership, while crowds of premium mass market gamblers in Australia boosted earnings at its flagship Crown Melbourne casino.
Normalised group profit - excluding variations in the win rate in VIP gaming and $70 million lost from its investment in rival casino group Echo - rose 14 per cent to $473.2 million.
Continued weak consumer sentiment and disruptions to patrons from refurbishments resulted in revenue from its main gaming floor at Crown Melbourne rise by only 0.9 per cent. Basic games and pokies were down, with the gaming floor dragged higher by the premium mass market betting in private rooms within the casino.
VIP gaming revenue at Crown Melbourne lifted 9.2 per cent.
At its Perth casino main floor gaming revenue rose 9.7per cent, and VIP revenue rose by 3.3 per cent.
The Macau market was subdued with growth of only 5 per cent against recent highs of closer to 40 per cent year-on-year growth.
Shares in Crown closed an at all-time high on Friday, up 76¢ at $14.34.
Frequently Asked Questions about this Article…
Crown reported a 22.9% fall in full‑year profit to $395.8 million. Investors should note the difference between statutory profit and the company's normalised profit figures — normalised profit (which strips out VIP win‑rate swings and a $70 million loss on an Echo investment) actually rose 14% to $473.2 million, showing underlying strength despite headline weakness.
The headline decline reflected swings in VIP gaming win rates and a $70 million loss from Crown's investment in rival casino group Echo. When those items are excluded, Crown's normalised group profit rose 14% to $473.2 million, indicating better operational performance across its portfolio.
Performance was mixed: Crown Melbourne's main gaming floor revenue rose only 0.9% (with basic games and pokies down) but VIP gaming revenue lifted 9.2%. In Perth, main floor gaming rose 9.7% and VIP revenue increased 3.3%. Premium mass gamblers in Australia were a key earnings driver.
Macau was subdued for Crown, with growth of only about 5% compared with recent highs closer to 40% year‑on‑year. The slowdown was linked to a scarcity of VIP high rollers following a changeover in Chinese leadership, which weighed on Crown's Macau‑exposed assets.
Crown plans to spend billions on a new gambling‑hotel complex at Barangaroo in Sydney and is participating in a government review for a possible Brisbane casino. These large developments could drive future revenue and tourism exposure if approved and executed, but they also require significant capital and depend on broader tourism demand.
Crown's 34% investment in Melco Crown Entertainment gives it a meaningful link to Macau through the City of Dreams resort. That stake provides geographic diversification but also increases Crown's sensitivity to Macau market swings — particularly VIP volatility — which investors should factor into risk assessments.
Rowen Craigie urged more investment in tourism infrastructure — faster visa processing, more direct flights, better airport and hotel experiences, restaurant quality and language skills — to attract middle‑class Chinese tourists. For shareholders, improved infrastructure could boost visitation and spending at Crown properties, while weak infrastructure could limit growth opportunities.
Crown shares closed at an all‑time high on the Friday after results, up $0.76 at $14.34. Everyday investors should watch trends in VIP gaming win rates, progress on Barangaroo and Brisbane plans, Macau visitation and policy developments, and any future one‑off items (like investment losses) that can swing headline profit figures.
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