THE STAR VIP DOWNTURN – CUTS 400 JOBS
Trading and earnings
Domestic revenue growth trends for The Star properties had “softened” with domestic revenue through June 8 was up 0.3%. Total domestic revenue for year-to-date was up 3.1% compared to last year. International VIP trends from the first half to the second half of 2019 continue downward, with turnover down 31.1% through June 8.
Explanations
- Star Entertainment Group CEO Matt Bekier told Reuters that trade tensions between the United States and China have been affecting gamblers from Asia. This subsequently affects the high-roller gamblers who comprise VIP revenue at Star casinos.
- Slowing domestic growth was blamed on more challenging macroeconomic conditions in the markets.
- lower hold rates on table games.
- disruption from capital works on The Star Sydney.
Consequences
In the Star Entertainment update, the company noted that major capital projects are “progressing to plan.”
The project most in need of stability in order to move forward is Queen’s Wharf Brisbane. This integrated resort development will include 2,000 residential apartments, more than 1,000 premium hotel rooms, and a thousand-seat ballroom. The $3.6 billion development should open in 2022.
As for the Star Gold Coast project, the first joint tower is underway and scheduled for completion in 2022.
The Star Gold Coast work will not conflict, however, with the recent announcement of the World Poker Tour’s maiden voyage to Queensland. That series of live poker tournaments will run from September into October later in 2019
Job Cuts
The above-mentioned projects will offer jobs in the tourism and resort markets. However, that doesn’t lessen the hurt of the jobs lost.
No jobs have been cut yet, but as much as 20% of the backroom staff would be laid off before the end of June. The move is supposed to “stem the bleeding” and save up to $50 million per year, according to the Sydney Morning Herald.
The staff under consideration for the cuts includes workers in IT, hospitality, human resources, and finance departments. They will “take out duplication” of roles and hit nearly every aspect of the business.
Sources:
https://www.2gb.com/the-star-to-slash-jobs-as-high-rollers-stop-spending/
https://www.casinoaus.com/star-entertainment-group-job-cuts/
https://www.intergameonline.com/casino/news/high-rollers-down-star-suffers
