Crown Perth hopes new stadium and Qantas direct flights can help revive profits
Crown Resorts is hoping the new stadium on its doorstep and Qantas’ direct flights can help revive profit growth in Perth as high-rollers continue to desert its local gaming tables.
While reported earnings from Crown’s Burswood complex rose 11 per cent in the December half thanks to better-than-expected winnings from VIP gamblers, its preferred measure of profit is one which strips out variances in the average win rate.
On that measure, Crown Perth’s “normalised” earnings before interest and tax plunged 15.9 per cent to $84.5 million.
The fall came after an alarming 41 per cent fall in VIP program play to $3.2 billion, which flowed into a 3 per cent fall in Perth’s revenue to $427.5 million.
In contrast, VIP play at its sister Melbourne casino surged 37.5 per cent to $19.5 billion.
Crown executive chairman John Alexander said Qantas’ plan to make Perth a hub for direct European flights and the new stadium could bring more gamblers to its tables.
“We've had a number of conversations with Qantas about how we can really embrace that and I think the new football stadium will help our property,” he said.
“But it is going to be slow, hard yards, though we think Perth had effectively bottomed out. We are confident in Perth on a long-term basis. Tourism there is coming off a low base and can only get better.”
Perth’s main floor gambling revenue was down 3 per cent at $241.4 million, though the impact of the fall was offset by contributions from the new Crown Towers hotel. Its occupancy rate improved to 75 per cent from 58 per cent in June but average room rate fell to $306.
Crown’s group profit was 33.6 per cent off at $238.6 million after big one-off gains last year.
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