FOUR LONG YEARS AFTER the Asian economic crisis struck, the Australian casino industry is finally getting back on its feet. As Asian economies have picked up and the Australian dollar has weakened, making the country a cheap destination, tourists - and their cash - are making their way back Down Under. Late last year, casino owners saw their profits soar five-fold as gamblers exchanged record sums for chips. News-paper reports declared a resurgence in gambling as tourist figures improved and casino takings soared. 'There has been recovery as the economies strengthen,' says Gary O'Neill, Melbourne's Crown Casino corporate relations general manager. But the markets have changed, he adds. 'The demographic is different. Our two biggest markets are now Taiwan and Hong Kong.' On the other side of the continent at Perth's Burswood Casino, general manager John Schaaps adds: 'During last year, Burswood achieved some growth in visitation from our traditional markets of Thailand, Singapore and Malaysia.' They were also focusing on Hong Kong, Taiwan and China. While Indonesians are still not back in numbers, the Chinese are making themselves known on the Australian tourism scene. In 1999, 87,500 Chinese travelled there compared with just over 50,000 in 1996 and insiders believe that the mainland will provide ever-growing revenue for the industry. Also adding to the tourist tally in the past four years have been 66,000 more Singaporeans and an extra 12,000 Malaysians. Strengthened Asian economies and the fragile Australian dollar have been major factors in the recovery, as has strong domestic airline competitiveness, which has seen ticket prices slashed to previously unthinkable levels. Internationally, increased services linking Asia and Australia - most recently Ansett Airline's introduction of a direct Hong Kong-Melbourne route and salubrious business class attracting high rollers - have also assisted. It's a long way from the shock of the 1997 Asian tiger collapse. It was not just the countries directly affected which suffered near-catastrophe; the repercussions of the crisis sent major aftershocks throughout the world and to countless industries - one of the first to be affected was tourism and, subsequently, gaming. For Australia, the self-titled 'lucky country', in the midst of its biggest-ever gambling boom due to liberalisation of gaming laws and new casinos along the east coast, the consequences were dire and almost instantaneous. 'We certainly felt the impact of the Asian economic crisis as far as revenue was concerned but more significant was the loss of growth. The growth stopped almost overnight,' recalls O'Neill. The casino, a A$1.2 billion (HK$5.23 billion) industry newcomer at the time of the crisis, was one of the hardest hit in the country and found itself A$350 million in debt, severely damaging an already fragile national industry. 'Our three big markets were Hong Kong, Indonesia and Singapore. What is true is that a lot of the premier players at the top end of the high-roller market really did not stop coming even though the economic crisis did affect a lot of people. Where we lost business was in the developing markets, particularly Indonesia but including Hong Kong and Taiwan,' says O'Neill. 'The international segment of our market would then account for 25-30 per cent of our numbers. Now I think it's more like 15 per cent.' Tourist numbers plummeted and, with some Asian countries taking longer to recover than others, it wasn't until 1998 that the full impact of the collapse could be observed. Indonesia, still in recovery, provided the most shocking decline with the number of Indonesian visitors to Australia dropping from 108,000 in 1996 to 82,000 in 1998. Meanwhile, the average number of nights spent by most Asians shrunk from 31 to 24, each person spending around A$600 less during a visit. Crown pitched itself as a resort-style casino, offering an enormous hotel complex, cinemas, restaurants and shopping at a prized Yarra River-side location in the centre of the city. As a result, the huge drop in Asian package tourist numbers hit it hard. 'The extent of the impact has been more severe than was anticipated,' Crown said in a statement to the Australian stock exchange in 1997 as its share price fell to a tenth of that the year before. But it was not alone in being fried in the Asian economic meltdown. Christmas Island Casino, once a major player in the high-roller market, closed when its mostly Indonesian guests stopped arriving. Adelaide Casino was put up for sale but failed to find a buyer. Cairns' Reef Casino battled to avoid liquidation. Canberra, Alice Springs and Townsville casinos remained largely empty. Burswood saw a 54 per cent profit decline in 1996 and posted a loss of A$8.9 million in 1997. With its proximity to Indonesia, things were slow to improve and continue to be affected by the state of play of some Asian economies. 'Burswood looks forward to a continuation of the promising signs which have begun to show in key Southeast Asian markets, as some of them emerge from their recent economic stresses,' says Schaaps. 'However, the industry continues to be affected by continuing instability in Indonesia.' The casinos have had to rethink their strategies in order to avoid such losses in the future. 'To improve our performance in international markets, a review of the international marketing department was undertaken,' Schaaps explains. 'Our new international marketing strategies are designed to cater to a much broader spectrum of clientele. The benefits offered with our programmes have been 'repackaged' in a way that encourages new and repeat visitation, as well as recognising our frequent and valued customers.'
