Crown chief bets on luring more Chinese tourists
He wants to attract middle-class Chinese tourists, as rival hot spots such as Singapore and Macau covet the valuable gambling and leisure demographic.
On Friday Mr Craigie announced a 22.9 per cent fall in full-year profit to $395.8 million.
But as the owner of casinos in Perth, Melbourne, London and Macau, Crown is set to splurge billions on a new gambling and hotels facility at Sydney's Barangaroo, while also participating in a government review to build a new casino in Brisbane. Mr Craigie said more needed to be done to polish up the nation's tourism and entertainment infrastructure if it wanted a larger share of China's huge middle-class 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. 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 ring of casinos in Australia.
But its portfolio had mixed results for fiscal 2013, as VIP high rollers were scarce in Macau after the changeover in Chinese leadership.
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 the rival casino group Echo - rose 14 per cent to $473.2 million.
Continued weak consumer sentiment and disruptions to patrons from refurbishments saw 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 9.7 per cent. Shares in Crown closed at an all-time high on Friday, up 76¢ at $14.34.
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Rowen Craigie urged more investment in Australia's tourism infrastructure to attract middle-class Chinese tourists. He highlighted the importance of faster visa applications, direct flights, improved airport experiences, better accommodation and restaurants to win a larger share of China's middle-to-upper holiday market.
Crown announced a 22.9% fall in full-year profit to $395.8 million. However, its normalised group profit — excluding variations in VIP win rates and a $70 million loss from its Echo investment — rose 14% to $473.2 million.
Crown's normalised group profit excludes short-term items that can distort earnings, specifically swings in VIP gaming win rates and a $70 million loss from its investment in rival Echo. By removing those factors, the normalised figure was $473.2 million, up 14% versus the reported full-year profit of $395.8 million.
Crown Melbourne saw only a 0.9% rise in main floor gaming revenue due to weak consumer sentiment and refurbishment disruptions, but VIP gaming revenue there lifted 9.2%. Perth's main floor gaming revenue rose 9.7%. In Macau, VIP high rollers were scarce after China's leadership change, which weighed on results.
Crown plans to spend billions on a new gambling and hotels facility at Sydney's Barangaroo and is participating in a government review for a potential new casino in Brisbane. Crown also holds a 34% investment in Melco Crown Entertainment, the operator of the City of Dreams resort in Macau.
Despite the fall in reported profit, Crown shares closed at an all-time high on the Friday of the announcement, rising 76 cents to $14.34.
The article notes that weak consumer sentiment and disruptions from refurbishments dampened Crown Melbourne's main floor gaming revenue. Basic games and pokies were down, while premium mass market betting in private rooms helped lift overall floor results.
Crown is positioning itself on multiple fronts: investing in domestic casino and hotel projects like Barangaroo and exploring a Brisbane casino, while holding a 34% stake in Melco Crown Entertainment to participate in Macau's market. The company believes improving travel links, visas and tourism infrastructure will be key to attracting middle-class Chinese tourists that many regional competitors are chasing.
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