Hong Kong investor takes a gamble on casino in Cairns
Tony Fung plans to build a HK$31 billion resort in Queensland, despite a tourist slump there
Bloomberg in Sydney
Sandwiched by forested hills and the Great Barrier Reef, the city of Cairns and its surrounding region are enduring a tourist slump. More than a third of the 3,892 hotel rooms in the tropical Australian getaway were empty in the second quarter of the year.
Hong Kong investor Tony Fung Wing-cheung has plans to reverse that with a A$4.2 billion (HK$31.2 billion) casino resort, with an artificial lagoon, golf course and 25,000-seat arena. The complex will almost double the number of hotel rooms in a region where oversupply has fuelled an 18 per cent slump in overnight rates since 2007.
Companies including billionaire James Packer's Crown and Echo Entertainment are looking to expand or add casinos in Cairns' home state of Queensland, to lure Chinese tourists away from Macau.
A record 110,100 Chinese arrived in Australia in February, more than double the 42,600 who came during all of 1995, and China is now the country's biggest source of tourist revenue.
"Whether they gamble or not, casinos are one of the prize attractions" for Chinese tourists, said Justine Chien, director of Sydney-based tour agent Golden Dragon Travel.
Queensland, twice the size of Texas and with a shoreline longer than India's, is seeking to emulate Singapore, where Asian tourists helped Genting and Las Vegas Sands resorts draw US$5.85 billion in revenue last year.
"We're in a global competition for tourists and the offering we have at the moment, I'm afraid, is not up there with our competitors," Queensland Premier Campbell Newman said last week while announcing plans to offer as many as three new casino licences. "The infrastructure that we have in this state is from a different era."
New projects, in particular Fung's Cairns casino, had the "potential to reinvigorate Asian tourism" in Queensland, said Matthew Jones, director of Brisbane-based Liquor & Gaming Specialists.
"If someone is prepared to build something of a much higher standard, that's going to encourage more visitors," he said.
Fung's Aquis is the most ambitious so far. With 3,750 hotel rooms as well as 1,335 villas and apartments according to its plan, it could accommodate more people than Singapore's two integrated resorts put together.
That might be a stretch, said Justin Casey, managing director of Macau-based Asia Pacific Gaming Consultancy.
"Everyone's got a marble floor, chandelier and a Chinese restaurant now," he said. "If you had a pocket full of money and you were looking to establish a new destination in Asia, I don't know Australia would be the first cab off the rank."