Star targets China in hotel tower play
CASINO operator Star Entertainment is in talks with major international hotel brands to operate a new hotel and apartment tower planned for Jupiters Casino.
It is planning to target cashed-up Asian tourists, particular from China, to lure them to the Gold Coast.
The Star casino in Sydney and an improved international VIP result were the best performers as Star Entertainment posted a full year 2016 profit hike of $194.4 million, up almost 15 per cent.
CEO Matt Bekier said those two markets were “a standout”, but a major spend will ensure Queensland, and the Gold Coast in particular, becomes its top performer.
“Once we have the new tower built on the Gold Coast, we expect that market to be our best and the majority of our business will be in Queensland,” Mr Bekier said.
He said Star was in talks with major hotel operators to run its new Gold Coast hotel, due by 2020. It is planning a 200m-high hotel tower in addition to a $345 million refurbishment of the existing casino and sixstar hotel under construction.
“We are currently talking to international brands that are of particular relevance to the Chinese market to operate the new tower,” Mr Bekier said.
“We expect to announce them, subject to successful pre-sales of tower apartments, later this year.”
Star and its Hong Kong partners may build up to seven new towers as part of a $2 billion masterplan to expand Jupiters.
It is adding a $1 billion tower in Sydney, including a Ritz Carlton hotel, and the $3 billion Queens Wharf complex in Brisbane.
Star Entertainment owns The Star casino in Sydney, Jupiters on the Gold Coast and Brisbane’s Treasury Casino.
Mr Bekier said projects like its new Gold Coast tower were essential to attract a booming Chinse tourism market.
“Now only 3 per cent of our market comes from tourism (because) we can’t get them to stay in our properties,” he said.
“We are working with the relevant Chinese tour operators to get more of that market.”
The casino operator’s revenue rose 6 per cent to $2.27 billion.
Revenue at The Star was up almost 9 per cent and down slightly (0.2 per cent) in Queensland.
International VIP business grew 7 per cent after Star improved its win rate in a major turnaround. It hit 1.5 per cent in the FY16 second half, compared with just 0.88 per cent in the first half, when the casino only won 88 per every $100.
Star will pay a fully franked dividend 7.5 a share, taking the full year fully franked dividend to 13 . Its shares closed $6.04.