The strong rise in Chinese tourism over the past decade continued into 2018, with overall numbers up 13% to 1.4million. But for Crown Resorts they’re spending less – although there are no indicators yet from tourism bodies as to whether the non-gambling spenders are leaving less in Australia.
- Chinese big spender gambling results in Australia are well down on last year according to Crown Casino’s 1H2019 financial year report;
- VIP turnover – mostly Chinese high rollers were down a whopping 12% year on year; in 1H2018, numbers rose 16%;
- Chinese gamblers are also finding more options closer to home with Cambodia’s port city of Sihanoukville among the new favourite destinations.
The high roller gambling number drop is consistent with a similar Jan-2019 drop in gambling spending in Macau, a favourite haunt for Chinese gamblers. Numbers may be down because Australia is having some high level policy differences with China, with suggestions of spying and a rejection of Huawei’s investment in Australia’s telecoms network.
Crown’s normalised revenues were down 1.2% and “normalised” pre-tax profit rose just under 1%, to AUD432.5 million. Premium spenders are still “coming to the property at the same numbers, but spending less,” according to Crown Resorts CFO Ken Barton.
The broader contraction of the Chinese economy that is moderating expenditure views would have had an influence on this performance. It also doesn’t help that there is an ongoing confrontation between the US and China over trade issues, raising uncertainties not just in China but globally.
But a more likely cause is that the steep increases of recent years has begun to moderate, at least to take a breather from the recent incline. If that’s the case, this performance can be expected to spread more widely across the Chinese tourism profile.
There may also be the fact that Chinese gamblers are finding more options closer to home. One example is the port city of Sihanoukville, once pulling in Cambodia’s jet-setting elite, before than becoming a popular backpacker destination in the 1990s thanks to its tranquil beach charm. Now, it is proving a popular destination for Chinese travellers – particularly gamblers – with annual visitors from the country now easily outweighing the local urban population.
Sihanoukville is riding the wave of the Chinese outbound tourism boom and more than 120,000 Chinese travellers are now arriving in the city each year, supported by increased nonstop air connectivity from the country. In 2018, ten new cities were directly linked to Sihanoukville, comprising Wenzhou, Tianjin, Shenzhen, Shantou, Kunming, Hangzhou, Fuzhou, Changsha, Chongqing, Guangzhou.