Reef Casino Trust’s Cairns casino profits surge

One of the smallest players in Australia’s gaming industry, Reef Casino Trust, has hit a winning streak with a surge in profits from its hotel and casino in Cairns.

After a failed takeover attempt by Hong Kong businessman Tony Fung last year, the trust has reported a 47.5 per cent jump in its half-year profit to June — compared to the same period last year — of $6.4 million.

The single-purpose trust, which owns the Reef Hotel and Casino in the north Queensland tourist town, posted the profits on the back of a jump in gaming and hotel revenues and a 5.9 per cent cut in operating expenses.

With international tourism numbers rising this year as the value of the Australian dollar slumped, the Cairns tourism industry has begun to recover, although the regional economy remains flat.

The surge in the trust’s profits follows the introduction of a loyalty program, new gaming machines and promotions to lure high rollers with the recently added direct flight service on SilkAir from Singapore.

In his half-yearly review, Reef Casino Trust chairman Ben McDonald said the trust was in a strong position as the casino and hotel moves into the “high tourist season’’ in Cairns. The Reef Hotel and Casino is the only casino in Cairns.

Mr MacDonald reported that overall casino revenues were up 7.7 per cent in the first half of the year, with electronic gaming revenues rising 4.4 per cent and table gaming revenues jumping 15.8 per cent.

Some of this revenue growth on the tables came from the growing Chinese tourism market, particularly a “strong Chinese New Year holiday season’’.

Hotel revenues were also up by 5.8 per cent, with both occupancy and average rate per room higher than the same period last year.

“Overall, the outlook for the second half (of 2015) is positive for Cairns’ biggest entertainment complex,’’ Mr MacDonald said in his report.

“We will continue to leverage off the good momentum in electronic gaming.

“Underpinning revenue growth includes a new tiered membership loyalty program, a full schedule of promotions and entertainment and the introduction of new gaming machines and games on the casino floor.

“Our VIP gaming team has reactivated efforts to market our casino to players in Singapore and Southeast Asia to leverage off the new direct flight service from Singapore to Cairns on SilkAir which started in May.

“Cairns remains a very popular destination with Chinese tourists,” he said.

“Much will depend on the Chinese economy.

“However, the recent anti-­corruption crackdown in China is not expected to affect our operations in a major way.

“The lower Australian dollar should attract more overseas visitors to Cairns.’’

Mr Fung last year abandoned his takeover of the casino and hotel after failing to meet the deadline for state government regulatory approvals.

The billionaire had wanted to use the casino licence as part of his now-stalled plans to build a $8.5 billion resort casino north of Cairns.

Source:  The Australian - 28th September 2015