Crown Resorts CEO Says Inflation Has Hurt Discretionary Spending at Casino Resorts
Posted on: June 10, 2024, 01:27h.
Last updated on: June 10, 2024, 02:01h.
Crown Resorts is amid its next chapter following several inquiries and royal commissions that found the casino company failed to adhere to regulatory rules and prevent the company’s gaming floors from being used by criminals to wash dirty money.
Crown retained its three casino licenses but remains under the close supervision of government-appointed monitors. The Australian gaming firm is additionally amid a changing customer demographic and economic conditions that have forced Crown’s hand to adjust its operations.
Speaking recently with Sky News, Crown Resorts CEO Ciaran Carruthers says inflation has resulted in reduced discretionary spending. The impact has been felt at Crown Melbourne, Crown Perth, and Crown Sydney.
Certainly, we’re not immune to the impact of the inflationary pressure and the 13 interest rate increases over the past 18 months,” Carruthers explained. “It’s having an impact on us, and we’re having to change our business model as a result.”
Carruthers became the chief executive at Crown in July 2022. He replaced Steve McCann who led the company’s organizational and management restructuring and ushered in a new culture at the casino corporation.
Before arriving at Crown, Carruthers worked in China’s Macau at The Venetian and Wynn.
Patron Appeals
With consumers not willing to spend as much on entertainment and hospitality as they did before inflationary pressures arrived in the aftermath of the global COVID-19 pandemic, Carruthers says Crown is lessening its dependence on its gaming operations and luxury offerings. The CEO says its marketing initiatives are focused on informing a wider range of possible customers that they “don’t have to be a VIP” to gamble at a Crown casino or stay, eat, or drink.
We’ve done a lot of work rehabilitating our brand. We’ve clearly had a bad couple of years in terms of people’s perceptions of who we are and what we represent. We’re making it much clearer that we’re so much more than casinos,” Carruthers said.
“We’re restaurants, we’re bars, we’re entertainment, we’re live music, we’re shows, we’re wonderful spas and wellness and great hotels,” he continued. “The totality of the entertainment offering means that we can and should be reaching out to a much wider audience.”
Along with broadening its resort offerings, Carruthers said Crown is more conscious of different budget levels. That means more casual dining options are coming to the resorts in the coming years and more well-priced shows are in the works, too.
Former Business Model No Longer Exists
Carruthers spoke with Sky News from Crown Sydney, the $1.5 billion development in New South Wales’ Barangaroo overlooking the Sydney Harbor. Crown Sydney was a legacy project of billionaire James Packer, Crown’s founder, former CEO, and chairman.
Packer’s father, Kerry Packer, had long wished to open a luxury casino resort in Sydney. Crown Sydney was conceptualized in 2016 as an ultra-luxury resort destination with 76 high-end residential units and 349 hotel rooms catering to the city’s wealthiest residents and travelers.
Carruthers said the business model used by Packer and the former Crown leadership team was flawed.
“[Crown Sydney] was built for a model that frankly doesn’t exit. The market for high-end gamblers has really gone the way of the UK and London where people are coming for reasons other than just a visit for gambling,” Carruthers said. ?
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