Packer taps a new China boom

James Packer's play for greater casino exposure in Sydney puts him in prime position for a looming Chinese tourism boom, and should teach Tourism Australia a lesson.

James Packer is the first leading Australian business person to adjust his strategies to reap a fortune from the looming Chinese tourist boom. The Chinese love the Great Ocean Road, the Great Barrier Reef and the Sydney Harbour but after they have seen one or two of those sites many want to know where the action is.

And that’s where they discover James Packer’s Melbourne based Crown Casino group, which also controls the Perth casino. Perth is a key Chinese tourism market. And Crown taps Chinese tourists wanting to stay closer to home with its casino operation in Macau.

But to take full advantage of the looming China tourism boom, Crown needs a casino in our largest tourist market, Sydney. That’s why Packer’s Crown has bought 10 per cent of Echo, which owns Sydney’s Star Casino, and wants the regulations changed so he can buy more.

In addition, Packer is lobbying NSW Premier Barry O'Farrell to build a $1 billion hotel and second Sydney casino at Barangaroo, formerly East Darling Harbour, near the site of the old Patrick’s stevedoring operation. Sydney is limited by law to one casino until 2019.

Packer is therefore driving to gain control of a Sydney casino on two fronts. If he wins, Crown will then have three licences – in Melbourne, Sydney and Perth.

In Victoria the Baillieu government is looking to substantially increase transport links to Avalon airport to take advantage of the impending boom.

Australia is held back because of a lack of investment in tourist facilities. But our failure to recognise the looming boom is reflected in many areas.

In a dollar affected tourism market, Chinese visitors jumped by around 20 per cent in 2011, to a record 540,000 – our biggest single market. Tourism Australia spends only about a quarter of its overseas budget on China, and tourism groups spent a fortune on the Oprah visit for limited rewards because the US is not our market – Americans say it's too far.

Someone needs to light some mild Chinese fire crackers under the Tourism Australia board seats.

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