An employee touches gold bangles as they sit in display inside a Chow Tai Fook Jewellery Group Ltd. jewelry store in the Central district of Hong Kong
Echo Entertainment Group Ltd. needs a way to penetrate the exclusive community of the world’s top gamblers and lure them to its Brisbane casino. It’s partnering with the world’s largest jeweler to get a foot in the door.
A loyalty program that offers yacht cruises and truffle tastings to people who spend more than HKD1 million ($129,000) a year at Chow Tai Fook Jewellery Group Ltd. stores will help bring in high-rollers to Echo’s new casino resort in downtown Brisbane, according to its Chief Executive Officer Matt Bekier.
“The universe of very, very serious VIPs is probably 1,500 to 2,000 players,” he said in an interview Thursday, referring to gamblers who typically bet more than USD2,000 an hour on games of high-stakes baccarat. “We can de-risk the project by building a pipeline of visitors back into China.”
Echo will partner with the jewelry chain’s sister company Chow Tai Took Enterprises Ltd. and with property developer Far East Consortium International Ltd. to build the 1,100-room hotel and casino that will open on the shores of the Brisbane river in 2022.
The Hong Kong-based companies, which will each take 25 percent stakes in the resort, will win fees for each VIP customer they refer to the new property.
“They have a very large customer base in Asia,” Bekier said. “If they bring them in they want to be able to generate an extra fee for that.”
Echo shares fell 0.8 percent to A$4.86 at 1:03 p.m. in Sydney, trimming their gain this year to 28 percent. The S&P/ASX 200 benchmark dropped 0.1 percent.
Cheng Yu-tung, the Hong Kong billionaire whose family controls the Chow Tai Fook group, owns a stake in closely held Sociedade de Turismo & Diversoes de Macau SA (STDM), founded by his longtime friend Stanley Ho. The stake in STDM gives him control of 293 million shares of SJM Holdings Ltd., Asia’s largest casino operator by revenue.
Chow Tai Fook Enterprises is also linked to Suncity Group, Macau’s largest junket operator, and the duo will develop a casino project in Vietnam.
Cheng’s and Far East’s connections will help “add value to the Brisbane VIP business, given their relationships and deep knowledge of the high-end consumer in China,” Sam Theodore, a Sydney-based analyst at UBS AG, wrote in a July 20 note.
It’ll cost about A$2 billion (USD1.5 billion) to build the resort and the casino could see A$22 billion a year being wagered in its VIP rooms by 2023, Theodore said.
More money needs to be spent on new hotels and resorts if Australia wants to stop Chinese tourists losing interest and going elsewhere, according to the country’s former Prime Minister Paul Keating. Chinese tourists spent A$5.7 billion in the country last year and make up the biggest group of visitors after New Zealanders, according to government data.
The country has the best image among Chinese consumers but only comes 14th in terms of destinations they actually visit, Bekier said, citing Echo’s internal research.
Australia’s natural environment and clean air are the top attraction for Chinese tourists, he said. Echo hopes to capitalize on this by offering speed ferries to dolphin-petting sessions on the islands off Brisbane’s Moreton Bay.
“You’re looking at a massive trend where as people become wealthier they seek to have more experiences,” he said. “There’s a lot of investment flying out of China right now, so that group of customers is growing very quickly.” David Fickling, Bloomberg
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