Star Entertainment has seen domestic revenue increase by 5.2 percent in the four months to October 22, but issues with its VIPs still persists.
Speaking at the company’s AGM on October 26, Star’s chief executive Matt Bekier said that the group’s casinos in Sydney and Queensland had performed well between July 1 and October 22, 2017. However, due to a low win rate from its international VIP business, overall revenue only topped 4 percent.
VIPs Aren’t Anteing Up
Owing to China’s continued crackdown on the casino industry, in particular high rollers visiting Macau from the mainland, Star’s overseas VIP revenue was down by 20 percent. Despite the slowdown outside of Australia, domestic takings have remained strong.
In a bid to increase local revenue, Star Gold Coast will soon open a newly refurbished gaming floor. Ahead of the Commonwealth Games, which get underway in Queensland on April 4 2018, the group’s Gold Coast casino will unveil a larger gaming space as well as a new luxury hotel.
But, while revenues continue to improve for Star, senior executives have stressed that they are closely monitoring the planned expansion of Crown Resort’s casino network.
With Crown’s Barangaroo venue set to open in 2021, Star Entertainment Group boss John O’Neill told AGM attendees that his company is in a state of “eternal vigilance.”
Although Crown director James Packer has said his new project will only cater to VIPs, O’Neil pointed to the fact that some games will have minimum bets as low as $20. On top of this, a turf war for employees could disrupt the daily running of Star Gold Coast.
Queensland Casinos to Compete for VIPs Attention
One area in which the two Queensland casinos will ultimately compete is the VIP market. With Star needing to plug its international leak, Chinese visitors to Australia are going to become more of a focus.
According to Bekier, the number of Chinese tourists visiting Australia is going to increase from one million to more than three million by 2026. This is something he wants to capitalise on, but, as his counterpart O’Neil has noted, Crown will be a strong competitor in this arena.
However, despite the possibility of Crown trying to acquire the services of Star’s VIP relationship managers, Bekier is buoyed by his company’s current performance.
“Growth rates in Star’s VIP business exceeded both Crown and Sky and VIP turnover for Star in FY17 exceeded both that of Crown and Sky combined,” Bekier said.