Wednesday, October 26, 2011

Singapore’s Integrated Resorts (IRs) overtake Aussie’s

imageCrown owns the Crown casino of Melbourne and the Burswood casino of Perth and aims to attract more high rolling VIP gamblers to the Australian casinos despite losing some of its shares of VIP businesses to the new casinos that sprung up in Singapore.  Australian casinos tend to target high-rollers from Australia and Hong Kong and the casinos imagegenerate  about S$895 million annually from VIP gamblers, contributing to around 15% of the entire casino revenue. 

 

Singapore now possess two of the most valuable and profitable casino resorts in the globe, presenting a competitive challenge for the Asian tourist dollar for Australia. It is expected that Singapore would overtake South Korea and Australia by 2011 to become Asia’s second largest casino imagemarket across the globe, coming after Macau. Singapore has enjoyed 13 consecutive months of record tourist arrivals and the highest tourist arrivals in a single month was in December 2010 which saw 1.1 million visitors. Opening of the $4.4 billion Resorts World Sentosa (RWS) casino and $5.94 billion Marina Bay Sands (MBS) casino had directly impacted the regional casino market, bringing 8% VIP decline in Crown and Burswood.

Besides the emergence of new casino operators to compete for the share of revenue, the way in imagewhich Australia presents and markets itself to the global stage also has an influencing role to play in the declining casino revenue and loss of tourists. The issue is further pressured by recent calamities such as the earthquake and tsunami that devastated, and the recent spate of floods and cyclone that struck Australia. Casino operators in Australia are required to pay taxes to the federal, state and municipal government, amounting to more than twice that of their net profits after taxation. Owner of Crown and Burswood James Packer had the impression that the Australian government has been performing the good role of being the ‘silent majority player’ whilst they are competing against other successful companies to attract tourists to Australia and promote the expansion of the tourism sector and other economic activities. However, Australian casino operators are in fact spending more on capital expenditure, limiting the amount of reach cash available to its stakeholders.

Packer is now pushing for a more integrated tourism strategy that Australia could plausibly adopt, so as to regain competitiveness in the integrated resorts sector with other Asian economies, especially Singapore. Australian Federal Tourism Minister agrees that casinos have an essential role to play in the nation’s tourism strategy, but highlighted that more research has to be executed before major decisions are made. Australia is undertaking a global tourism marketing campaign known as ‘There’s Nothing Like Australia’ and the National Long Term Tourism Strategy, requiring close cooperation to be forged among casinos, airlines, hotels, tour imageoperators and many other small businesses that are engaged in the tourism sector, working together to promote Australia as a competitive and attractive travelling destination. Casino operators such as Crown and Tabcorp in Australia are also seeking greater assistance from the government and the private sector with regards to issues such as coordinating access and enhancing airport facilities for VIP visitors of the casino.  They are consulting the strategies image that Singapore is undertaking, where high rollers would be greeted by custom officials at Changi Airport and escorted via a private lounge for fast-tracked customs and immigration facilities at the Premier Check-in of Changi Airport Terminal 1 and 2.  In April 2010, the Singapore Airport Terminal Services (SATS) opened the 97 sq m Premier Check-in Lounge at Terminal 2, following the success of its predecessor at Terminal 1. The new lounge would offer premium passengers to enjoy a hassle-free travel experience, coupled with the convenience and exclusivity of checking in at a private lounge which offers direct access to the immigration area. The ease in travelling and presence of fast-forward immigration facilities could have enabled Singapore to be an increasingly appealing site for high rollers.

 

References:

at
Labels: