Star Entertainment Chair Warns Against Over Reliance On Chinese Market

Australian casino operator Star Entertainment Group chairman John O’Neill has warned against the country’s tourism industry depending too much on Chinese market despite its potential.

Speaking to a media outlet, O’Neill said that Australia could easily attract nearly five times more Chinese tourists than today but noted that excessive reliance must be avoided. He pointed out that other neighboring markets like Thailand, Indonesia and Singapore were also lucrative and must be targeted as well. O’Neill emphasized that the Australian tourism industry needed to carefully track developments in China, particularly shifts in governmental policies.

In a statement, O’Neill said,

We operate in a highly regulated environment in all our various jurisdictions. Each market has its nuances which must be understood by operatives. There cannot be any room for complacency. Early warning signals, or changes to the rules of engagement, must be monitored carefully and responded to proactively.

O’Neill however did not refer directly to last year’s incident involving rival Crown Resorts where 19 employees were arrested by Chinese authorities on the mainland for gambling crimes. All of those charged including three Australian nationals were recently sentenced to 9-10 months of jail time. Among those arrested included the head of Crown’s VIP business. The arrests were reportedly made because the employees were promoting gambling which is barred in China.

He nonetheless highlighted the large potential of the market. Noting that out of the nearly 100million Chinese tourists that currently travel internationally today, Australia gets around 1.2 million per year, or about 1 percent. He believes that this can go up to almost 5 percent. Star Entertainment currently operates The Star Sydney, The Treasury Casino and Hotel in Brisbane and Jupiters Hotel and Casino Gold Coast in Queensland.

The arrest of Crown Resort employees shook up the Australian casino industry, with VIP gaming taking a hit. According to latest results based on the first half of 2017, Star Entertainment suffered a decline of 11.9 percent in VIP revenue bringing in $20.8 billion. Crown Resorts saw a drop of over 45 percent in VIP revenue. O’Neil said that there were no current plans for the group to expand internationally. He highlighted the fact that Star Entertainment was partnering with Chinese firms to bring in investment to its properties in Sydney, the Gold Coast and Brisbane.

Referring to the group’supcoming A$2.5 billion casino hotel project in Brisbane’s Queen’s Wharf area, O’Neil said that it was a model case of how investment from China or Hong Kong could be attracted into Australia.