CEO of Crown Resorts: Rising Inflation Negatively Impacts Casino Resort Spending
Crown Resorts is going through a new phase after various inquiries and royal commissions discovered that the gambling company didn't follow regulatory norms and didn't stop its gaming areas from being utilized by criminals to launder money.
Crown still has its three casino licenses but is under the close observation of government-appointed supervisors. This Australian gaming business is also dealing with a shifting customer base and economic conditions that require Crown to modify its operations.
In a recent conversation with Sky News, Crown Resorts CEO Ciaran Carruthers disclosed that inflation has caused a decrease in discretionary spending. This has affected Crown Melbourne, Crown Perth, and Crown Sydney.
Carruthers remarked, "We're facing the consequences of the inflationary pressure and the 13 interest rate rises in the last 18 months." The CEO stated that these factors are impacting the company, making it compulsory for them to modify their business model.
Carruthers assumed his position as CEO at Crown in July 2022, taking over from Steve McCann, who oversaw the organization's restructuring and implemented a new work culture at the casino corporation.
Prior to joining Crown, Carruthers worked in China's Macau at The Venetian and Wynn.
Appeals to Patrons
Since customers are not willing to spend as much on entertainment and hospitality due to inflationary pressures after the COVID-19 pandemic, Carruthers reveals that Crown is shifting away from its reliance on gaming operations and luxury offerings. The CEO mentions that their marketing initiatives target a broader range of potential customers who "don't have to be VIPs" to gamble at a Crown casino, stay, eat, or drink.
We've improved our brand image. We've had some difficult years in terms of people's perceptions of who we are and what we stand for. We're making it much clearer that we're more than just casinos.
"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," Carruthers added. "Our full range of entertainment options enables us to appeal to a larger audience."
Apart from broadening their resort amenities, Carruthers also shared that Crown is more aware of diverse budget levels. Therefore, more casual dining options will be introduced at the resorts, as well as more affordable shows.
Outdated Business Model
Carruthers held a conversation with Sky News from Crown Sydney, the $1.5 billion development in New South Wales' Barangaroo, which overlooks Sydney Harbor. Crown Sydney was a vision of billionaire James Packer, Crown's founder, former CEO, and chairman.
Packer's father, Kerry Packer, had long desired to open a luxury casino resort in Sydney. Crown Sydney was envisioned in 2016 as an ultra-luxury resort destination with 76 luxury apartments and 349 hotel rooms catering to the city's wealthiest residents and travelers.
Carruthers commented, "Crown Sydney was built for a model that does not exist anymore. The market for high-end gamblers is gradually becoming like London, where people go for reasons other than gambling."
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