Club Sapphire Merimbula proposed new hotel to diversify from gaming revenue

The NSW South Coast could be home to a new 100-room hotel, following a proposal from Club Sapphire Merimbula.

The hotel would be part of the club’s focus on establishing establish new income streams to offset declining gaming revenues.

The hotel would sit on top of existing club facilities and would be designed to bring more people to its restaurants, bars and events.

Club chief executive, Damien Foley, told The Australian Financial Review that the move was vital from an economic perspective.

“We still see gaming as a legitimate form of entertainment,”

“But from an economic perspective, gaming revenue peaked in 2005-6 and has gradually declined since, putting pressure on the future viability of the club.”

Foley expects gaming revenue to drop from 45% to below 40% in 10-20 years’ time.

The five-level hotel project is expected to go a long way to mitigating the impending loss.

Gaming losses are expected to be felt throughout all venues.

ClubsNSW represents 1270 venues across the state and diversification is now a priority.

A ClubsNSW spokesperson said, “Clubs now offer hotel accommodation, childcare centres, seniors’ living facilities, medical care and other community services to suit the changing needs of their members and patrons.”

Pent up demand for gaming grew during the pandemic, with profits from gaming machines from local venues hitting a record $3.8 billion in the first half of 2022.

However, venues are getting set to deal with reform such as cashless gaming technology and harm minimisation initiatives.

Both are expected to drive down revenues.

The NSW government will spend $100 million in gambling harm minimisation including funding for reforms.

Club Sapphire Merimbula has put its hand up to trial cashless gaming as it looks to become more socially responsible.

“We’re putting ourselves in a position, as interest in gaming declines, to backfill that revenue,” he told the AFR.

The proposed new hotel comes from local tourism research that shows a gap in the market. Merimbula has a local population of about 4000 people, which expands to 20,000 during the peak Christmas holiday period.

The state government has granted gateway approval to the club, mandating that the Bega Valley Shire Council modify local planning regulations. This is contingent on meeting certain conditions and will allow the club's height to increase from 16 to 26 metres to make room for a new multi-storey building.

Community consultations kicked off this week.

Jonathan Jackson, 19^th October 2023