Crown Melbourne's Contribution to Victoria
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Crown Melbourne’s
Contribution to Victoria
March 2014
Crown Resorts Limited ACN 125 709 953
a
Contents
01
Major Awards
02 04 06
Key Facts Letter from our About
Chairman Crown Resorts
11 12 32 34
Crown Resorts’ Economic and Proven track record Track record in
Investments Tourism Benefits of developing and attracting VIP
to Victoria operating luxury tourists
hotel resorts
36
Crown Melbourne’s Employment and
Training Contribution
54 58
Crown’s A world leader
Commitment in responsible
to Indigenous gaming
Employment
68 74 76
Community Corporate Awards
Partnerships Governance
Major Awards
2013 Australian
2013 Victorian Employer of the Year
Employer of the Year 2014 Casino/Integrated Resort of the Year
2012 Victorian Training Award in the 2012 Australian Human Resources Institute Recommended Community
Apprentice Development category Success Factors Team Award Employer award at Contribution award
the 2012 Australian at the 2012 Australian
Business Awards Business Awards
2012 Victorian Training 2013 Education 2013 Victorian Financial Review BOSS
Employer of the Year Award and Training Award Tourism’s Magazine Most Respected
at the Victorian Tourism Education Companies for 2012
Tourism Award and Training Award
Community and Project Partners
1
2 Key Facts
Crown College Melbourne has
4,600
graduated approximately
apprentices and trainees
since inception
Crown Melbourne Crown Melbourne
provides attracted
employment for more than
8,800 people 17 million
visits in F13
Crown Melbourne Crown is investing
was awarded
2013 Australian
Employer of
$1.7b
in Melbourne’s
the Year tourism
at the 2013 Australian infrastructure
Training Awards from F07-F16
In FY13 Crown contributed
$360million
in taxes
to the Victorian Government
2
Crown’s partnership with
Reconciliation Australia:
‘Crown has had an extensive Indigenous
Employment Strategy in place for a number
of years, and through their RAP (Reconciliation
Action Plan), will also build opportunities for
Aboriginal and Torres Strait Islander businesses…
Reconciliation Australia thanks Crown for its
commitment and contribution to reconciliation.’
Leah Armstrong, CEO,
Reconciliation Australia
Crown’s partnership with
National Centre of Indigenous Excellence:
‘Crown’s commitment to training and good quality
jobs for Indigenous Australians, that was special
for us.’
Jason Glanville, CEO, National Centre of Indigenous
Excellence, Redfern
‘I commend Crown for its
continued leadership in building
Aboriginal employment and
reconciliation efforts together with
Victoria’s Aboriginal community.’
The Honourable Jeanette Powell, Victorian Minister
for Aboriginal Affairs, 14 August 2013
3
3 Letter from our Chairman
Making a Major Contribution
to Victoria
Almost 8,800 people come to work at Crown
Melbourne, ensuring that world-class service is
provided to all visitors. This makes Crown Melbourne
the largest private sector single-site employer in
Victoria.
Training Contribution
We recognise that our employees are our most
valuable asset and we dedicate significant resources
to their development. Crown has an outstanding
record in employee training. We have built a
$10 million dedicated training facility in Melbourne,
and to date approximately 4,600 apprentices and
trainees have graduated with nationally accredited
qualifications from our onsite Crown College. We
are constantly working to improve the quality of the
opportunities we provide our employees.
Crown’s training and development program is widely
I’m extraordinarily proud of the contribution Crown acknowledged as a best practice model, as is our
has made to the State of Victoria over the past two Indigenous Employment Program. Crown was the
decades. We have played a major part in helping first company to sign the Australian Employment
to turn Melbourne into an exciting global tourist Covenant in 2009 with an initial pledge to create
destination. 300 job opportunities for Indigenous Australians. In
2012, we revised our commitment and increased
Attracting over 17 million visits a year, Crown the number of opportunities we will provide for
Melbourne is one of Australia’s most visited tourist Indigenous Australians to 2,000 by 2021. We
destinations. We’ll be investing $1.7 billion over ten believe our community partnerships with respected
years from financial year 2007 to financial year 2016 to organisations such as Reconciliation Australia and the
make sure our Melbourne resort remains competitive National Centre of Indigenous Excellence will assist
with the best integrated resorts in the world. us to honour this commitment.
Crown assists Melbourne to compete with other Crown is also a major contributor to Victoria’s tax
cities in Australia and the world for major domestic revenue. Over the last four years we have contributed
and international conferences and events. Crown over $1.3 billion in taxes to the Victorian Government.
Melbourne is a critical asset when Victoria bids for
these events, complementing the State’s first class We Support our Local Communities:
sporting facilities.
Crown recognises it can play a significant role within
the community and seeks to do so by providing
Employment Contribution financial donations and employee support to a
I believe we are a model corporate citizen. In 2013, broad range of community activities, local sporting
Crown was awarded the Australian Employer of the clubs and charities. Crown’s contributions include
Year at the Australian Training Awards and in the sponsorship arrangements, employee time, the use
same year was also awarded the Victorian Employer of Crown facilities and donations of Crown hospitality
of the Year by the Victorian Government. We have packages. In addition, Crown partners with local
previously won both awards as recently as 2010. community organisations to support them in their
charitable work.
4
On behalf of the Board, I would like to acknowledge philanthropic arm of Crown Resorts, the Foundation
the commitment of our employees and management will engage with and provide financial support to
on these worthy community projects. programs with demonstrated success in the areas
of community welfare, education, health care and
Crown seeks to act responsibly in all of its activities, research, the arts and the environment.
recognising that a company is assessed not only on
its financial performance but also by its standards of While Crown Melbourne has helped achieve much for
corporate governance, the conduct of its employees, Victoria over the last two decades, there is so much
the quality of its workplace, its environmental footprint more we can do. With our major investment in tourism
and level of community engagement. By focussing on infrastructure, our internationally recognised brand
these measures, Crown will ensure more sustainable and our extensive Asian marketing network, Crown
business growth. will be critical in helping Victoria take advantage of
the great tourism opportunity offered by the booming
The Board is committed to promoting Corporate Asian middle class.
Social Responsibility (CSR) initiatives across the
business. To oversee Crown’s commitment, the It is through our experience, our efforts and our
Board established a dedicated CSR Board commitment that Crown Melbourne will continue to
Committee, chaired by The Honourable Helen make a major contribution to the Victorian economy
Coonan. The CSR Board Committee supports in the future.
and promotes continuous improvement in Crown’s
CSR performance.
The Crown Resorts Foundation:
The Crown Resorts Foundation, announced in
September 2013, will formalise Crown’s community
involvement program and aggregate the range of
community initiatives already being undertaken James Packer
across both of our Australian resorts. As the Chairman, Crown Resorts Limited
5
4 About Crown Resorts
Crown Resorts is Building a
Global Luxury Tourism Brand
Crown is one of Australia’s largest entertainment and impact associated with the capital expenditure and
resort groups. It has businesses and investments in operations in 2012 of Crown’s Australian resorts are
the integrated resort and entertainment sectors in significant.
Australia and Macau and wholly-owns and operates a
high-end casino in London. KPMG estimated that in 2012:
Crown’s Australian resorts in Melbourne and Perth • Crown Melbourne contributed $2.1 billion in
feature over 2,300 hotel rooms, VIP villas, casinos, economic value added;
resort pools, luxury spas, signature restaurants, retail
• Crown Perth contributed $800 million in economic
outlets, convention centres and live entertainment.
value added;
Every year Crown’s Australian resorts attract over
• Crown Melbourne directly and indirectly supports
25 million visits. Crown’s resorts are renowned
employment for more than 23,200 full time
globally, particularly in Asia, for their focus on luxury
equivalent (FTE) positions across the Victorian
accommodation, service, quality dining and shopping
economy; and
experiences, world-class gaming and entertainment
facilities. • Crown Perth directly and indirectly supports
employment for approximately 7,700 FTE positions
Over one third of Crown’s revenue in financial
across the Western Australian economy.
year 2013 was estimated to be generated from
international visitors. The majority of this revenue is Source: KPMG, ‘Integrated Resorts and Asian Tourism –
from Asian patrons – predominantly Chinese. This the Role of Crown Melbourne and Crown Perth – 2012’
(October 2012)
makes Crown one of the most significant international
tourism operators in Australia, with a particular focus
To make sure Australia can continue to compete with
on tourism from Asia.
the best hotels and resorts in the world, Crown will
In 2012, Crown engaged KPMG to conduct an be investing $1.7 billion between financial year 2007
assessment of the contribution that Crown Melbourne and financial year 2016 in upgrading and opening new
and Crown Perth makes to the Australian economy. attractions at its Melbourne resort.
The results of the KPMG analysis show that both the
economic value-added impact and the employment
6
Crown Melbourne
Crown Melbourne is a leading world-class luxury •• Construction of Crown Metropol Melbourne,
resort, featuring over 1,600 hotel rooms and VIP villas, one of Australia’s largest hotel, comprising 658
spas, swimming pools, luxury retail outlets, signature guest rooms, spa and leisure facilities, meeting
restaurants, a convention centre, gaming areas and rooms and a private lounge. Crown Metropol
live entertainment venues. Melbourne was awarded ‘Best Luxury Hotel’ at
the 2012 Victorian Tourism Awards;
Crown Melbourne attracts over 17 million visitors
annually, making it one of Australia’s most visited •• Extensive refurbishment of the six-star Crown
tourist attractions. KPMG estimated that Crown Towers hotel, which was recently awarded
contributes approximately $2.1 billion (value-added) to Australia’s ‘Best large luxury hotel 2012’ and
the Victorian economy annually. ‘Best Large Luxury Hotel 2013’1;
Crown Melbourne has Victoria’s largest single- •• Significant upgrade to the VIP salons and villas
site workforce with 8,800 people employed at the resulting in Crown being awarded the ‘2012 VIP
complex. Gaming Room of the Year’2;
•• Extension and refurbishment of the premium
Crown Melbourne has been awarded “Casino/ gaming offering - the Mahogany Room and the
Integrated Resort of the Year for 2014” at the Teak Room - and the opening of Club 23;
prestigious International Gaming Awards (IGA) in
London, which is considered the ‘Oscars’ of the •• Development of the West End—a 15,000 sqm,
gaming industry and celebrates the outstanding all-encompassing entertainment precinct
performance of industry worldwide. including a number of restaurants, bars and
gaming options; and
From financial year 2007 to financial year 2016 Crown
will have spent approximately $1.7 billion to ensure •• Extensive refurbishment of the main
that Crown Melbourne remains one of the world’s gaming floor.
leading integrated resorts. Refurbishment and
expansions have been undertaken and include:
1 A
warded as part of the Reader’s Choice Gourmet Traveller
2012 and 2013 Travel Awards
2 Awarded at the International Gaming Awards 2012
7
4 About Crown Resorts
Crown Perth
Crown acquired Crown Perth (formerly Burswood •• Expanded conference and meeting facilities;
Entertainment Complex) in 2004. In the years prior and
to Crown acquiring the property, minimal capital •• Extension and ongoing refurbishment of the
had been invested in the property. Since acquisition, main gaming floor.
Crown has modernised and expanded the facilities
In addition to its developments, Crown has also
at Crown Perth to bring them up to the standard of a
acquired a 140 foot super yacht to host VIP
world-class resort which is capable of competing in an
customers.
expanding and increasingly competitive global market.
Crown Perth is now one of Western Australia’s
Developments to date have included:
largest tourist destinations, attracting more than
•• Development of the roof top “Sky Salon” and eight million visits each year. With more than 6,100
refurbishment of the hotel resort pool resulting people employed on-site, it is also the State’s largest
in achievement of the National Commercial/ single-site employer.
Industrial Construction Award ($10 million to
$20 million)3 and Crown Perth being recognised Crown Perth’s estimated annual contribution to the
for ‘Best Gaming Space’ and ‘Best Resort economy of Western Australia is $800 million of
Pool’ at the 2012 HOSPY Awards in Las Vegas; value-added.4
•• Extensive refurbishment of Crown Metropol In August 2012, Crown demonstrated its long-term
Perth (previously the InterContinental Perth commitment to Australian tourism, with the decision
Burswood) including luxury day spa and beauty to undertake the development of a new six-star, luxury
and fitness facilities to a five-star standard; hotel to be known as Crown Towers Perth.
•• Development of the “Pearl Room”, an
international gaming facility including VIP Crown’s ongoing investment at Crown Perth
private gaming salons; illustrates a commitment to making it a world-class
entertainment precinct to compete not only in the
•• Development of luxury VIP villas, the
region (with the resorts in Singapore and Macau)
“Mansions”, situated on the Swan River
but also globally, where large hotel resorts are being
overlooking Perth city;
developed to capture a share of the expanding
•• Opening of new food and beverage outlets, tourism market, particularly out of China.
including internationally acclaimed restaurants
Rockpool Bar & Grill, Nobu and Bistro
Guillaume;
4 K
PMG, ‘Integrated Resorts and Asian Tourism — the Role of
Crown Melbourne and Crown Perth – 2012’ (October 2012).
3 A
warded at the Masters and Builders 2012 National A copy of the report is located behind Tab 1 of Volume 1B—
8 Excellence in Building and Construction Awards Attachments to the Project SubmissionCrown Sydney
Crown has announced plans to develop and operate VIP gaming into such a hotel resort will provide a
an iconic six-star hotel resort, including VIP gaming further attraction to high net worth tourists from China
facilities, at Barangaroo South, Sydney. and other Asian countries.
Crown’s plan for an iconic six-star hotel resort on
Sydney Harbour aims to give Sydney a landmark hotel Melco Crown Entertainment Limited
it can be proud of. It is widely accepted in the tourism As at 31 December 2013, Crown held a 33.6% equity
sector that Sydney’s luxury hotels are not competitive interest in Melco Crown Entertainment (MCE), a joint
with the best hotels in Asia, and the city is missing out venture between Crown and Melco International
on a valuable segment of the luxury tourist market. Development Limited. MCE has a dual listing on the
NASDAQ and the Stock Exchange of Hong Kong.
The Crown Sydney Hotel Resort will be the city’s
first six-star hotel resort. Crown’s plan includes 350 In Macau, MCE has two premium properties (City
hotel rooms and suites, luxury apartments, signature of Dreams and Altira Macau), operates the Mocha
restaurants, bars, retail outlets, pool and spa facilities, Clubs, and has a 60% equity interest in Macau
conference rooms and VIP gaming facilities. Studio City, an integrated resort project on Cotai.
In the Philippines, MCE, through its 76.4% owned
The ‘iconic’ status of the hotel resort will be assured subsidiary, Melco Crown (Philippines) Resort
through the appointment of Wilkinson Eyre, one of the Corporation (MCP), has an interest in a consortium
world’s best architects, to design a landmark building that will develop and operate an integrated resort in
that will be instantly recognisable around the world Manila.
and will complement Sydney icons like the Sydney
Harbour Bridge and the Sydney Opera House. Crown’s shareholding in MCE, one of Macau’s major
integrated resort operators facilitates the promotion
The Crown Sydney Hotel Resort will deliver significant of its Australian resorts. This has also contributed to
and unique benefits for the people of New South making Melbourne one of the destinations of choice
Wales, including increases to employment, business for high net worth Asian visitors.
investment, export income, and Gross State Product.
Crown has the track record and experience to deliver Crown Aspinall’s, London
something very special for Sydney-siders and visitors Crown Aspinall’s is an exclusive high-end London
from interstate and overseas. Crown believes that casino. It is one of only five licensed high-end casinos
the world-class Crown Sydney Hotel Resort will in London’s prime West End entertainment district.
assist New South Wales to meet its tourism targets
by attracting a larger share of the booming Asian Crown Aspinall’s extends Crown’s global network of
outbound tourism market. Incorporating world-class VIP gaming facilities and provides a superior level of
service and amenities to VIP customers in London.
94 About Crown Resorts 10
Resorts
Crown Melbourne Crown Perth Crown Aspinall’s
Melbourne, Australia Perth, Australia London, United Kingdom
100% owned 100% owned 100% owned
Investments
Melco Crown
Macau, Special
Administrative
Region of the People’s
Republic of China
33.6% interest
115 Economic and Tourism Benefits to Victoria
Crown Melbourne’s Role in the
Victorian Economy
Crown Melbourne is a generator of economic In 2012, Crown engaged KPMG to conduct an
activity that provides valuable tourism infrastructure, assessment of Crown Melbourne’s contribution to the
employment and training opportunities, and is a Australian economy. The results of the KPMG analysis
tourist and entertainment hub for local, interstate and show that both the economic value-added impact
international visitors. and the employment impact associated with the
capital expenditure and operations in 2012 of Crown
Crown Melbourne also provides employment for Melbourne is significant.
8,800 people and Crown Melbourne is a recognised
industry leader in the provision of learning and KPMG estimated that in 2012:
development opportunities for its employees.
•• Crown Melbourne contributed $2.1 billion in
economic value added; and
Indirect Economic Value Generated
•• Crown Melbourne directly and indirectly
As well as the direct earnings generated through
supports employment for more than 23,200
the business and the employment provided by the
full time equivalent (FTE) positions across the
resorts, Crown Melbourne has a significant indirect
Victorian economy.
benefit on Victoria’s economy. These indirect benefits
range from intangible benefits associated with Source: KPMG, ‘Integrated Resorts and Asian Tourism –
Crown’s support of state and national tourism bodies the Role of Crown Melbourne and Crown Perth – 2012’
(October 2012)
through to the employment opportunities provided
by the significant capital investment program being
undertaken at both resorts.
KPMG rown Melbourne directly and indirectly
C rown Melbourne
C
supports employment for more than contributed
estimated
that:
23,200 $2.1b
full time in economic
equivalents value added
Source: positions across the
Economic contribution
of Crown Melbourne Victorian economy
and Crown Perth,
KPMG, October 2012
12Investing $1.7 billion in large scale Australian economy, directly employing 5% of the
tourism infrastructure in Victoria Australian workforce and generating 8% of Australia’s
export value.
Through the extensive capital expenditure program
which has been underway at both resorts, Crown will The size of the tourism opportunity
have invested over $1.7 billion from financial year 2007
until financial year 2016 in Melbourne. This investment
from Asia
has created employment opportunities and further There are over 300 million middle class consumers in
enhanced the quality Crown’s Melbourne resort as China today (equal to almost the entire population of
a world-class facility, and enabled it to continue to the USA) and by 2030 China is expected to have over
attract international, especially Asian, tourists as a billion middle class consumers.
competition increases.
China’s growing wealth and its transformation from a
production-based to a consumption-based economy
Victorian Tourism and the Asian provides Australia’s tourism sector with massive
Opportunity opportunities.
The importance of tourism China’s outbound travel market is one of the fastest
growing in the world as the middle class spend
Tourism was Australia’s sixth largest export in 2011 increasing amounts of money on luxury travel, which
and therefore makes a significant contribution to the is one of their preferred leisure activities.
overall level of economic activity and employment in
Victoria and Australia. In financial year 2012, tourism
contributed $98 billion in total expenditure to the
135 Economic and Tourism Benefits to Victoria
A report by the Boston Consulting Group in 2011 destinations in China, while France continues to be
noted the following: the most popular international destination, followed
by the US and Australia.”
“The rapid escalation in social and economic
Source: GroupM Knowledge and Hurun Report, ‘GroupM
mobility in China has brought a relatively rapid Knowledge and Hurun Release Wealth Report’ (31 July 2012)
increase in discretionary income available for travel.
Chinese travelers (including the affluent segment) Many countries right across the world are now
are therefore more eager than Westerners to investing significantly in tourism infrastructure to take
increase their spending on travel.” advantage of the immense opportunity provided by
Source: The Boston Consulting Group, ‘Taking Off: Travel and the rapidly increasing Asian wealthy and middle class,
Tourism in China and Beyond’ (March 2011) in particular, in China.
Figure 1 shows that in the year 2000, just over 10 Australia is losing market share
million Chinese people travelled abroad. This number
Australia’s share of China’s total outbound travel has
has risen approximately 820% to 97 million people
decreased from 1.2% in 2001 to only 0.7% in 2012.
in 2013, and is now estimated to reach 100 million by
This is despite a significant increase in Chinese tourist
2014.
arrivals to Australia over the last 10 years.
In addition to the middle class, China now boasts 250
Figure 2 shows the increase in China’s outbound
billionaires (up from only 15 six years ago) and over
tourism and the gold bars show how Australia has
one million millionaires.
been losing share of this market.
The Hurun Report and GroupM Knowledge found
This loss of market share is despite Australia being
that travel is the biggest area of consumption for
considered the top long haul ‘must visit’ destination
Chinese millionaires:
for Chinese travellers. This decline would suggest
“Travel is the biggest area of consumption for the that Australia is not keeping up with other countries
Chinese millionaire. They spend an average break of like Singapore, in appreciating, planning and creating
20 days a year. The main reasons for going abroad tourism products to meet the desires of these
are holidays and business. Sanya (Hainan Island), Chinese tourists.
Hong Kong and Yunnan are the top three
Figure 1: Size of China’s outbound tourism market, 2000–2014
110
100 100.0m
97.0m
90
83.0
80
70 70.3
60 57.4
50 47.7
45.8
40 41.0
34.5
30 28.9 31.0
20 20.2
16.6
10 10.5m 12.1
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Source: Data from China Outbound Tourism Research Institute and UNWTO
14The ‘Australia in the Asian Century White Paper’ also In the same year, China became Australia’s most
noted that Australia’s reliance on Asian tourism is still valuable tourism market, and over time it will also
low when compared with other Asian countries. become the source of the highest number of visitors.
Strong growth from India and Indonesia, supported by
“Asia has become the biggest source of visitors for a younger demographic and expansion in other
the Australian tourism sector, contributing around promising Asian markets, such as Vietnam, is
40 per cent of visitor arrivals. Even so, Australia’s expected to complement the growth from China.
reliance on Asian tourism is relatively low compared This anticipated boost to tourism will have benefits for
to that of most Asian countries (Boao Forum for Asia Australia’s tourist industry, including for Indigenous
2012) —more than 70 per cent of arrivals to China, Australians engaged in tourism and for regional
Hong Kong, Japan, Malaysia, South Korea and Australia. In particular, there are opportunities for new
Taiwan come from Asia.” tourism hubs in northern Australia around the growth
Source: Australian Government, ‘Australia in the Asian Century of new Asian markets.
White Paper’ (October 2012)
While overseas tourist numbers from all regions are
The importance of China’s outbound expected to increase to 2020, the growth in numbers
from within Asia will outpace growth from all other
tourism sector to the Australian and markets in both percentage and absolute terms. By
Victorian economy 2020–21, Asia’s share of inbound arrivals is expected
Given the relatively low growth in tourism from to have increased from 41 per cent to 45 per cent
Australia’s traditional tourist markets like the UK and (TRA 2012a). This will drive the total economic value
the USA, visitors from Asia are critical to Australia’s of inbound tourism to around $35 billion by 2020.”
tourism future. Source: Australian Government, ‘Australia in the Asian Century
White Paper’ (October 2012)
The Australian Government’s recent ‘Australia in the
Asian Century White Paper’ noted that while Asian Victoria launched its own China Tourism Strategy
tourism to Australia is already significant, there are in May 20121 which outlines the actions required to
significant economic benefits if we can increase it increase the share of Chinese visitors to the State.
further over the next decade.
“In 2011–12, seven of Australia’s top 10 most valuable
inbound tourism markets were in Asia (TRA 2012b). 1 S
tate Government of Victoria, ‘Victoria’s China Tourism
Strategy’ (May 2012)
Figure 2: China Total Outbound & Australia’s Market Share
100,000 1.4%
Outbound Travellers (000s)
Market share (%)
50,000 0.7%
0 0.0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012(f)
Total Outbound (000s) Australia’s Share of Total Outbound (%)
Source: Tourism Australia, ‘China Market Profile’ (April 2013)
155 Economic and Tourism Benefits to Victoria
To succeed, Australia must “The preferences of visitors from these Eastern
understand and meet the demand of markets are different from the traditional markets in
terms of the experiences and destinations being
Asia’s new middle class tourists sought, as well as their spending and travel patterns.
While there has been a very large increase in Understanding, meeting and exceeding the
outbound tourism from countries on Australia’s expectations of these visitors, while maintaining and
doorstep, Australia can only take advantage of growing NSW’s share of the traditional inbound
this opportunity if the Australian tourism industry markets, will be essential if the 2020 target is to be
appreciates what the rising Asian middle class want, reached. Resource allocation must be directed to
and can cater for their desires. target the growth outlooks of the respective markets.”
Source: New South Wales Visitor Economy Taskforce, ‘Final
The ‘Australia in the Asian Century White Paper’ made Report of the Visitor Economy Taskforce: A Plan to Double
this clear: Overnight Visitor Expenditure to NSW by 2020’ (June 2012)
“And Australia’s tourism industry will benefit from
investing time and resources into better A Boston Consulting Group Report in 2011 found that
understanding and catering to visitors from growing travel providers who understand and meet the needs
tourist markets such as India, China and Korea.” of Chinese tourists, have the most to gain from the
massive increase in outbound tourism from China.
Source: Australian Government, ‘Australia in the Asian Century
White Paper (October 2012) A survey conducted by the Boston Consulting Group
in the third quarter of 2010 found that the rapidly rising
Last year’s New South Wales Visitor Economy demand for travel in China, together with the lack of
Taskforce Report also urged New South Wales offerings for Chinese tourists (both within China and
tourism operators to start understanding and catering abroad), presents a rare opportunity to gain a first-
to the taste of Asian visitors: mover advantage—which can be enormously valuable
in a market where consumers are desperate for
brands that meet their needs. Equipped with better
insight into targeted segments, travel providers could
develop differentiated products for affluent travelers,
as well as for the burgeoning segment of middle-class
tourists emerging in China’s large and smaller cities.2
2 T
he Boston Consulting Group, ‘Taking Off: Travel and
Tourism in China and Beyond’ (March 2011)
16China’s rising middle class have a A preference for major cities and
preference for luxury goods and luxury hotel resorts with gaming
services The preference of the Chinese wealthy and middle
A 2011 McKinsey study into the consumption habits class for a luxury experience explains why most
of China’s middle class found that the rapid increases Chinese tourists prefer spending time in major
in wealth, and the shifting social conventions that cities, where they can enjoy luxury products and
sanction the display of that wealth, are driving a experiences. In fact, Chinese tourists in Australia
growing infatuation for luxury goods. spend approximately 80% of their nights in Sydney,
Melbourne, Brisbane and Adelaide when they travel
The study found that by 2015, China will account for within Australia.4
20% of the global luxury goods market.
The desire for a luxury experience also explains why
The Chairman and Chief Researcher of the Annual so many Chinese tourists are attracted to luxury hotel
2012 Hurun Wealth Report, which studies the number resorts.
of wealthy Chinese, is quoted as saying:
The Allen Consulting Group Report (August 2012)
“As China is set to become the world’s biggest noted the following:
market for luxury, it is critical to understand the
Chinese luxury consumer.” “Given the importance of luxury goods and services
to China’s rising middle class, it is easy to
Source: GroupM Knowledge and Hurun Report, ‘GroupM
Knowledge and Hurun Release Wealth Report’ (31 July 2012) understand why they are attracted to luxury
integrated resorts which have unparalleled
Eve Lo, the Chief Knowledge Officer of GroupM accommodation, world-class restaurants and
China, which works on the Hurun Report, also noted high-end retail.”
the value of understanding the preference of China’s Source: Allen Consulting Group, ‘Crown Sydney Proposal—
wealthy and middle class consumers for luxury An Economic Benefit Assessment’ (August 2012)
brands:
Chinese travellers are also attracted to resorts with
“Understanding the behavior, attitudes and gaming facilities. Dr Marc Faber, a well-known US
preferences of the wealthy class will help luxury investment analyst found that “80% of Chinese
brands to actively connect and engage with Chinese travelling outside the country for the first time head
millionaires and their unique lifestyles. With luxury for a casino and 90% of Chinese who travel to the US
consumption as one of the main drivers of the visit Las Vegas.”5
Chinese consumer market, such insights into the
world of the super-rich are invaluable to brands.” This all explains why governments globally and in
Source: GroupM Knowledge and Hurun Report, ‘GroupM
particular Asia, are now considering and supporting
Knowledge and Hurun Release Wealth Report’ (31 July 2012) luxury hotels, which incorporate gaming, in their push
to increase tourism from China.
The Allen Consulting Group Report (August 2012)3
noted the following in relation to China’s growing
middle class consumers:
“The evidence suggests these consumers are
attracted to luxury hotels, great restaurants and
high-end retail shopping, which is why there is a
boom in luxury hotels and goods outlets across
China and also in many international tourist
destinations which are trying to attract Chinese
consumers.”
Source: Allen Consulting Group, ‘Crown Sydney Proposal—An
Economic Benefit Assessment’ (August 2012)
4 T
ourism Research Australia, ‘China—Inbound and Outbound
Travel, Snapshot 2011’ (June 2011)
5 M arc Faber, ‘The Chinese Tourists like Casinos’ (22
3 A
llen Consulting Group, ‘Crown Sydney Proposal— December 2011) available at http://marcfaberchannel.
An Economic Benefit Assessment’ (August 2012) blogspot.com.au/2011/12/chinese-tourists-like-casinos.html
175 Economic and Tourism Benefits to Victoria
IMAGE TO COME
Crown has a 33.6% interest in MCE, which operates two premium properties in Macau, City of Dreams (pictured here) and Altira Macau.
Macau’s success at attracting Asian Altira Macau (formerly known as Crown Macau)
visitors opened in 2007. Altira was designed as a VIP-
focussed property with exceptionally luxurious
The success of Macau at attracting a very large facilities, unparalleled service, private and main
increase in Asian visitors is another example of the gaming floor options, world-class culinary
importance of hotel resorts with gaming facilities in experiences and an internationally awarded spa.
the competitive international tourism industry:
The Forbes Travel Guide has awarded Altira Macau
•• Visitors to Macau have increased from their highest accolade, the Forbes Five-Star rating,
9.5 million in 2001 to 29.3 million in 2013;6 consecutively for the last five years, recognising it as
•• Macau received 18.6 million Chinese mainland one of the best hotels in the world. In addition, Altira
visitors in 2013, an increase of over 10.5% Macau’s spa has also won the corresponding spa
on the previous year; award for the last four years.
•• In 2012, 25.1 million of Macau’s visitors With primarily VIP guests, Altira Macau has forged a
were from Mainland China, Hong Kong and reputation of exclusivity and aspiration. Altira Macau
Taiwan; and showcases MCE’s in-depth understanding of the
•• Gaming revenue: hospitality landscape in Asia and its commitment to
elite tourism.
– In 2013 gaming revenue reached
$45.2 billion, up 19%; When it opened, Altira Macau set the benchmark
– Was up 13.5% in 2012 to $38.1 billion; for luxury accommodation and VIP gaming in
the diverse Macau market. Altira Macau’s luxury
– Was up 42% in 2011 to $33.5 billion; attractions continue to attract large numbers of VIPs
– Grew by 58% in 2010; and from mainland China and Hong Kong in a rapidly
– Is now 7.1 times larger than Las Vegas. expanding and evolving tourist market.
Macau has seen the development of large scale
integrated resorts, luxury hotels with a gaming
component and lesser quality hotels with a gaming
component which attract Chinese tourists of all
demographics. A case in point is MCE’s Altira Macau.
6 M
acau Government Tourist Office, ‘Visitor Arrivals’, available
at http://industry.macautourism.gov.mo/en/Statistics_and_
Studies/list_statistics.php?id=39,29&page_id=10
18Help attract a greater share of Asia’s Meeting the needs of Asian consumers
booming outbound tourism to Victoria Crown Melbourne and Crown Perth now offer luxury
Crown is firmly focussed on the tourism opportunities accommodation, dining, retail and entertainment
from Asia and in particular China. Crown’s Melbourne facilities tailored and targeted at the rising Asian
and Perth resorts have demonstrated their wealthy and middle class and matching the best the
understanding of the target market and their strength world has to offer.
in attracting a large proportion of tourists from Asia.
Crown has invested heavily in both its infrastructure
The ‘Australia in the Asian Century White Paper’, while and its employees to ensure that its Australian
suggesting that the tourism industry develop greater integrated resorts are of major appeal to the rising
luxury experiences to attract Asian tourists, singled number of Asian wealthy and middle class tourists.
out Crown’s tourism offering as an example of what is
Crown has tailored its facilities and service to appeal
required to succeed.
to high net worth Asian visitors including in relation to
accommodation, shopping, dining, entertainment
“Importantly, the tourism industry and events.
needs to develop culturally relevant
products to capitalise on growing The importance of Crown’s brand in
Asian interest in Australia as a tourist China
destination. This will mean developing Crown’s strong brand recognition in China and its
detailed understanding of the desires of Chinese
sophisticated luxury urban tourism tourists will help ensure that the Crown Melbourne
opportunities, such as those offered attracts a growing share of high net worth visitors to
by Crown Limited, as well as Victoria.
showcasing Australia’s outstanding Crown’s brand recognition in China, assisted by its
natural beauty.” investment in Macau through MCE, gives it a major
advantage in the Australian market as brand familiarity
Source: Australian Government, ‘Australia in the Asian Century and loyalty is very important to Chinese middle class
White Paper’ (October 2012) consumers.
195 Economic and Tourism Benefits to Victoria
A 2011 Boston Consulting Group Report noted the Over the past 20 years, Crown has invested
importance of brand to Chinese travellers, especially significantly in building its brand in Asia and Australia.
in terms of hotel and airline choice:
One of the hotels at MCE’s City of Dreams property is
“Our survey participants listed brand—the promise called Crown Towers. It is a prestigious, luxury hotel
of quality and service—as the most important factor which in itself further promotes the Crown brand in
in their choice of hotel or airline. Indeed, they said Asia.
that they rarely choose brands that are entirely
unknown to them. However, they are always eager Crown has opened sales offices throughout Asia.
to try a new brand if they have heard of it.”
In September 2012, Burswood Entertainment
“…establishing brand loyalty is both an imperative Complex was rebranded ‘Crown Perth’. This has
and a challenge in China’s travel market.” allowed Crown Perth to utilise the internationally
Source: The Boston Consulting Group, ‘Taking Off: Travel and recognised Crown brand in order to increase the
Tourism in China and Beyond’ (March 2011) number of international and interstate visitors to Perth,
especially from China.
The Boston Consulting Group, in September 2012,
released a report titled ‘Imagining Australia in the In 2011, to help promote the Crown brand to hundreds
Asian Century, How Australian Businesses are of millions of people in Asia, Crown entered into a
Capturing the Asian Opportunity’. In the report they two-year sponsorship agreement with Li Na, the
mentioned Crown’s growing international brand as a most successful tennis player in China’s history.
key factor in Crown’s success: Recognising the importance of this partnership,
Crown has extended the agreement until 2015.
“Crown’s success is driven by: a strong domestic
and growing international brand; a partnership Li Na won the 2011 French Open singles title,
model for its expansion into Asia; innovative product becoming the first player from Asia to win a Grand
offerings; and Australia’s own strong brand.” Slam in singles. She is currently the highest ranked
Source: The Boston Consulting Group, ‘Imagining Australia in
Chinese tennis player. Recently Li Na won the 2014
the Asian Century’ (September 2012) Australian Open singles title.
20Li Na’s Australian Open women’s final victory is Other endorsements of Crown’s
being called the first great sporting win of the “Asian Asian strategy
century” and economists say it could open up multi-
billion dollar opportunities for Australian companies. In addition to the favourable comments in the
Australian Government’s ‘Australia in the Asian
An estimated 100 million people watched the Century White Paper’, the following organisations
Australian Open across the Asia Pacific region and have also recently endorsed Crown’s Asian
figures from China indicate that the Australian Open tourism strategy.
finals were watched by over 20 million people on
CCTV5 alone. This figure does not include regional Tourism Australia
networks around China.
Tourism Australia’s former Managing Director,
Li Na has worked hard to help Crown promote Andrew McEvoy, had the following to say about
its brand in China. When Crown announced the Crown’s approach:
sponsorship in Beijing in September 2011, over 200
“Shopping, dining and entertainment are what the
newspaper articles were published in the Chinese
Crown complexes are all about and that is what
press. Li Na features in promotional materials and
Asian tourists want.”
advertising campaigns, making favourable media
comments about Crown in press conferences and Source: Herald Sun (29 August 2012)
actively promoting Crown to hundreds of thousands
of followers on her Facebook and Weibo Chinese
social media account.
The combination of these capabilities will help
ensure the Crown Melbourne offering is unrivalled
in Australia. Crown’s strong brand presence in Asia,
supported by a strong Asian sales network, presence
in Macau and sponsorship of Li Na, gives Crown a
significant strategic advantage in its drive to attract
high net worth Asian tourists and VIP customers to its
Australian properties.
Li Na winner of the 2014 Australian Open singles title
215 Economic and Tourism Benefits to Victoria
The Boston Consulting Group members are Asia-literate. Multi-lingual staff
The Boston Consulting Group’s submission to the members assist customers with their needs and
‘Australia in the Asian Century White Paper’, identified casino services are offered with the Asian customer
and profiled 13 Australian companies, one of which in mind.
was Crown. Of these companies the report said: Crown has sought to differentiate its customer
“They are part of a vanguard of companies offering through innovation. It was an early leader in
leading the way based on observable competitive offering private gambling salons for VIP customers.
advantages, understandable patterns of Asian Privacy, discretion and a complete, integrated
needs and constant innovation of their customer experience are key differentiators for the Crown
propositions and business models. brand in Asia and continue to drive innovation in the
organisation.
Above all, these companies share a vision of an
interconnected future. Crown has adapted its expertise to the Asian market.
It provided its intellectual property, expertise and
Others should take note and prepare to follow.” capital in taking a 33.6 percent stake in Melco Crown
Source: The Boston Consulting Group, ‘Imagining Australia in Entertainment. Crown’s abilities to maintain
the Asian Century’ (September 2012) relationships and adapt its expertise to Asia are now
key components of its operating model.
The report also noted the following regarding Crown’s The Australian brand is an important aspect of
operating model: Crown’s product offering. Australia’s cities, their
“Crown’s operating model is to be customer focused, attractions and their businesses are central reasons
provide an innovative and exciting product and for foreign visitors to choose Crown as a destination.
leverage its own and Australia’s brand and expertise. Crown customers also care about non-gaming
experiences when they visit Australia. While Crown
Crown has a relentless focus on customer can provide many of these experiences through its
experience. Through its training facilities and hiring integrated resorts, it relies on the Australian brand,
practices Crown aims to ensure its Australian staff infrastructure and some third parties for support. As
22such, Australia’s status as a top five destination for This has also helped foster Melbourne and Perth as
tourists from countries such as China is an essential destinations of choice for persons of high net worth.
driver of Crown’s continued success. The strength of
Australia’s brand helps drive customers to Crown’s Crown’s strong brand in Asia is supported by the
resorts, while the continued strength of Crown’s fact that:
brand and offering helps drive Asian tourists to
Australia.” •• City of Dreams Macau featuring Crown Towers
as its luxury hotel has been awarded the
Source: The Boston Consulting Group, ‘Imagining Australia in “Forbes Five Star” rating in both Lodging and
the Asian Century’ (September 2012)
Spa categories since its inception;
•• The Crown brand features throughout the
Crown’s strong Asian marketing guest rooms and other facilities within the
network Crown Towers hotel at City of Dreams Macau;
Crown’s brand, resources and relationships in China and
will be invaluable in helping the Victorian Government •• The Crown Signature Club magazine features
to market Melbourne and Victoria as an aspirational in each Crown Towers hotel room (and features
destination. Crown’s Australian properties).
Crown promotes the Crown Melbourne resort by Crown maintains an active presence in Asian
leveraging its global brand and reputation and utilising countries with an internationally based sales,
its international sales team. marketing and support team in excess of 60 people.
Crown’s shareholding in MCE, one of Macau’s Crown and MCE sales staff throughout Asia (including
major integrated resort operators, and its extensive in Macau) collaborate to ensure that MCE VIP
marketing network and commitment in Asia, has customers are cross-referred to Crown’s Australian
facilitated the promotion of its Australian resorts. properties and Crown VIP customers are cross-
referred to MCE’s Macau casinos.
235 Economic and Tourism Benefits to Victoria
Crown has been a major driver of international tourism Crown contributes significantly to tourism as both
for Victoria and Western Australia. Crown Melbourne and Crown Perth are major tourist
attractions in their states, with the combined sites
Crown has an unparalleled understanding of the attracting approximately 25 million visits each year.
tourism industry and has continued to successfully Crown’s strong brand, market understanding, and
increase visitation to its two resorts despite the trends marketing efforts throughout Asia help Victoria
in the broader Australian tourist market. Tourism and Western Australia capture their share of the
Research Australia’s International Visitor Survey in international tourist market.
2011 ranked Crown Melbourne as the third most
visited tourist destination in Victoria for all international •• Crown is focussed on attracting Asian tourists
visitors. Figure 3 shows that Crown Melbourne was – the fastest growing and most valuable tourist
also ranked third for Chinese visitors to Melbourne. market in the world
In financial year 2010, Crown’s significant contribution •• Crown recognised the opportunity offered
to Australian tourism was recognised by Euromonitor by Asia’s middle class traveller early and has
International, which ranked Crown Melbourne as identified what facilities and services must be
Australia’s top tourist attraction based on its ongoing offered to capture its share of this market
ability to attract tourists, its unique mix of world-class •• Crown has invested significantly in both its
facilities and the value this creates for Australia’s Australian resorts and its workforce to tailor
tourism industry. its offering to meet the demands of the Asian
middle class traveller – providing world-
Crown estimates that approximately one-third of its
class, luxury goods and services. Crown has
revenue is generated from international visitors.
complemented this investment with targeted
The majority of this revenue is from Asian customers
marketing throughout China to ensure the
— predominately Chinese. This makes Crown one of
Crown brand is widely recognised as a luxury
the most significant international tourism operators
entertainment offering
in Australia, generating valuable export income and
ancillary benefits to the States of Victoria and •• Crown’s strong brand recognition in China, has
Western Australia. in-turn helped promote Australia as a desirable
destination for Asian travellers. Crown has also
supported national and state tourism bodies
helping to promote Australia as a destination
globally.
24Crown’s effective marketing Crown Melbourne’s support of State tourism bodies
partnership with State tourism bodies incorporates preferred partnership agreements.
This support covers accommodation and restaurant
Crown works very closely with State tourism bodies utilisation for media and trade visits, meeting space
in Victoria and Western Australia in marketing for press conferences, airline bid opportunities,
those States interstate and globally. The Victorian marketing promotions, joint sales calls and
Government’s China Tourism Strategy identifies attendance at key trade events and missions. Crown
Crown Melbourne as one of the key partners it will is committed to supporting the needs of the State
work closely with in achieving their targets. tourism offices and ultimately sees itself as an
extension of these organisations and appreciates the
“Work with industry partners to impact this has overall on the success of Australian
promote Melbourne and regional and State tourism.
Victoria in China, including the Crown Crown also provides bespoke experiences to the
Integrated Resort, Phillip Island Nature State tourism offices and utilises its assets and
connections to enhance the State’s brand and
Park, Sovereign Hill and the Bendigo tourism messages. This incorporates access to the
region.” exclusive Capital Golf Course, key sponsored Crown
Events and Crown Ambassadors such as Li Na,
Source: State Government of Victoria, ‘Victoria’s China Tourism
China’s number one professional tennis player.
Strategy’ (May 2012)
Figure 3: Chinese Visitors to Melbourne’s Attractions
Federation Square 56%
Queen Victoria Market 50%
Crown Entertainment 44%
National Gallery
of Victoria 32%
Melbourne Museum 32%
Southbank/Southgate 16%
Docklands/Etihad
Stadium 13%
Melbourne
5%
Cricket Ground
% of Melbourne attractions visited by Chinese overnight visitors
Source: International Visitor Survey, Tourism Research Australia, Canberra, year ending December 2011
255 Economic and Tourism Benefits to Victoria
Crown has initiated VIP tailored package experiences cinemas, restaurants and retail outlets etc., which
for the China market supported through the State results in further tourism on-spend.
tourism offices, incorporating various tourism
suppliers throughout the States which facilitates The Australian VIP business mainly consists of
regional dispersal and marketing exposure for these high-value players, predominantly from Asia, and
key operators. more specifically from mainland China and Hong
Kong. There is an estimated 30 million Chinese
The State tourism offices often request Crown in the patrons in the VIP gambling market.
first instance for key media and trade visits due to its
brand and the superior product and services offered In 2011/12 the international VIP business in Australia
that will ensure hosted guests have a truly is estimated to be worth $1 billion (prior to including
memorable visit. the value of the tourism on-spend). Proceeds
generated in VIP rooms enable casinos to further
In recognition of the pivotal role Crown Melbourne invest in tourism infrastructure, including world-class
plays for tourism in Victoria, Crown Melbourne hotels, convention and conference facilities, theatres,
was recently awarded the 2013 ‘Education and cinemas,restaurants and retail outlets, which results
Training Award’ at the Victoria Tourism Awards. This in further tourism on-spend. Currently the casino
achievement means Crown Melbourne is representing industry is in the process of spending over $4.6
Victoria at the Australian Tourism Awards 2013 which billion on redeveloping and building new tourism
will be announced in February 2014. infrastructure. Of equal importance is the fact that 35
per cent of all revenue earned in Australian casinos
Attract high net worth tourists and returns to the community through taxes paid to the
three levels of government.
greater visitor spend
Crown’s resorts through their world-class Despite Australia’s geographic isolation, Australian
accommodation and gaming facilities attract high casinos currently attract about 3 per cent of the
net worth tourists who typically spend significantly highly competitive international VIP gaming business.
more than average tourists during their visit. High net
worth tourists are therefore of much greater value Looking to replicate Singapore’s and Macau’s
to the local businesses and economies they visit, success, competition for this market is increasing
which explains why so many governments, both with new integrated resorts opening in the
domestically and internationally are competing to Philippines and Vietnam, and possibly Japan and
attract them. Taiwan.
When VIP customers come to Australia they visit
The benefits of VIP gaming for for five to seven days (a much longer stay than for
Melbourne local and interstate customers) and are mostly
accompanied by family or friends who participate in
VIP gaming delivers significant revenue which will
a range of other tourism activities beneficial to the
benefit the taxpayers of Victoria and support Crown’s
economy, such as shopping, visiting major tourist
investment in other areas of Crown Melbourne such
attractions and other destinations apart from the
as hotel rooms, restaurants and leisure facilities.
city in which they are staying.
The Allen Consulting Group Report (August 2012)
It has also been known for these influential and
described the benefits of VIP gaming customers:
highly regarded business people’s contribution to
“The value of VIP casino gaming customers to the develop beyond tourism expenditure into investment
Australian economy can be summarised as: in Australian businesses.
The VIP Casino business in Australia is estimated to State and territory regulators recognise the
be worth $1 billion in FY 2012 and it also generates importance of the high-roller business and
additional significant high tourism on-spend. Australia’s place within a global market. For that
reason state and territory governments have
The VIP business supports Australian integrated responded with a different taxation scheme for the
resorts in investing in additional non-gaming VIP business, setting rates, which are competitive
infrastructure, including new and upgraded hotels, with Las Vegas and the Asian markets.
convention and conference facilities, theatres,
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