By Ben Blaschke
Star Entertainment Group Managing Director and CEO Matt Bekier has lamented the impact the arrest and prosecution of 19 employees of Australian competitor Crown Resorts in China has had on Star’s VIP business, but insists it won’t hurt the company long-term.
Speaking publicly for the first time about the arrests, which saw 16 of the 19 employees jailed for between nine and 10 months and Crown Resorts fined a total of RMB8.62 million (AU$1.67 million) for illegally promoting gambling, Mr Bekier said Star is steering away from the upper echelon of VIPs with high-end tourists now firmly in its sights instead.
“That (large VIPs) is not the future of this business,” Mr Bekier told Inside Asian Gaming in an exclusive interview to appear in the upcoming August edition.
“The future of this business looks a lot more like the high-end tourism experience because for us, as an Australian proposition to promote gaming as the sole reason to travel just doesn’t wash.
“You don’t get a visa, you don’t book a flight and travel for 14 hours to do exactly what you can right next door in Macau.”
Star Entertainment Group is currently embarking on a multi-billion dollar overhaul of its Australian properties, with an AU$500 million Ritz-Carlton to be built alongside The Star Sydney and another luxury hotel tower with private gaming facilities nearing completion at The Star Gold Coast. Star is also partners in the AU$2 billion Queen’s Wharf project in Brisbane alongside Hong Kong’s Chow Tai Fook and Far East Consortium – a development Mr Bekier believes will tie in well with the company’s other properties in providing a unique tourism destination.
Nevertheless, he admits the Crown Resorts situation has hurt Star Entertainment Group’s bottom line.
“In the first four months of the financial year (July to October 2016) our VIP business was travelling pretty much on par with the previous period (Star reported international VIP revenue of AU$596 million in its 2016 annual report) and then the next three months we went backwards to the tune of 25%,” he said.
“Obviously when you look at our numbers, it had a negative impact there and it’s something that caught my attention straight away.
“It’s a space that we are watching with great interest obviously but I should say that we are acutely aware of the regulations in the different markets that we operate in and we take our obligations very seriously.”
Mr Bekier said the company’s focus on high-end tourism remained key to its future VIP business.
“Our proposition has really evolved into the customer who is into the tourism experience,” he said. “We can put experiences to these customers that they can’t have anywhere else. That’s the logic of our customers. Gaming is not the prime focus of what they’re doing but it’s the most sustainable business proposition for us.
“We need more hotel rooms for that because if you’re only going for a small number of high rollers, you only need a couple of hotel rooms. If you’re looking at a larger group of business people with children, a family that wants to go and cuddle some koalas and go on a boat trip while here, play golf on the Gold Coast, go deep sea fishing and hit the beach – for those people we need a lot more rooms.
“It’s not just about Asia either. Right now Asia is really hot but if our strategy of bundling tourism experiences at the very high end is correct, we want to make that available to everybody. We’re looking to diversify and we’ll be looking to enter new markets with that offer.”
IAG’s full interview with Matt Bekier can be read in our August edition, which will be available from Wednesday 26 July.
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