Chinese highrollers has lowered VIP segment turnover at Crown Resorts
The economic situation in China has contributed to a decrease in the turnover of the VIP segment at resorts in the Asia-Pacific region. The Australian casino Crown Resorts was no exception.
The casino operator, registered in Australia, reported a decrease in the turnover of VIP-games by 12.2% in the second half of 2018. It amounted to $14.2 billion. Income from the provision of VIP-services at Crown in Melbourne decreased by 11.2% with a turnover of 17.3 billion Australian dollars ($12.38 billion). Another operator’s gambling establishment, Crown Perth, noted a reduction of 18.5% with a turnover of 2.6 billion Australian dollars ($1.86 billion).
Crown Melbourne's earnings before interest, taxes, depreciation and amortization (EBITDA) decreased by 3.2% due to non-compliance with the casino resort's VIP sales program. Nevertheless, revenues increased by 2% and amounted to 630.7 million Australian dollars ($451.33 million) due to an increase in revenues from table games (2.7%) and gaming slot machines (0.9%).
At Crown Perth, EBITDA fell by 8.6% to AUD 117.6 million ($841.55 million). Revenues from table games decreased by 5.2%, while from slot machines increased by 0.7%. Non-gaming operations also showed a positive trend - + 1.8%. Despite the volatility of the indicators, Crown's total income increased by 0.9% and amounted to 194.1 million Australian dollars ($138.9 million).
Crown Executive Director John Alexander believes that the decrease in VIP segment revenues was caused by the worsening economic background in the PRC and Australia.
It was originally planned that Crown Resorts will be positioned as an operator of integrated luxury resorts. The company has successfully implemented its goals, but tough measures by the Chinese government in relation to foreign gambling companies have led to a decline in the popularity and income of the Australian casino operator.
According to Crown CFO Ken Burton, the decline in VIP turnover does not only affect Australian casino resorts. Macao and Singapore’s gambling houses also suffered from the macroeconomic situation.
The recent decline in VIP revenues does not seem to have disturbed the Australian gambling operator, which is building a casino resort in Sydney, intended only for VIP clients. The Barangaroo project is scheduled to open in 2021.
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