Packer makes strong case for his Lankan casino
14 November 2013 03:27 am
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Making a compelling case for his controversial integrated resort (IR) project in Sri Lanka, the Australian casino mogul and the Chairman of Crown Limited, James Packer yesterday stressed the need for Sri Lanka to identify the importance of providing the right tourism offering, if the country is serious about achieving her ambitious tourism targets.
Packer said the rising middle class in India and China would increasingly look for luxury travel and hotels, signature restaurants, quality entertainment, gaming, casinos and high-end retail, all under one roof, could only be offered through an IR, which is not just a place of gambling.
“Unless tourism operators and authorities appreciate exactly what these rising Chinese middle class wants and unless we cater for their desires, we have little hope in taking advantage of these opportunities,” he said.
Packer is currently planning to invest US $ 400 - 450 million on an IR, which also houses a casino in Colombo. However, the project is now delayed indefinitely due to protests by the Opposition and various religious groups.
Despite the popular belief that the rising middle classes in India and China could help Sri Lanka to achieve her target tourist arrivals, Packer expressed his doubt.
“They are only achievable with the right tourism infrastructure and attractions,” he said, addressing the Commonwealth Business Forum (CBF) attended by over 1,000 foreign and local business delegates.
According to a McKinsey study, India’s 170 million middle class is expected to grow by 50 million per annum to reach 580 million by 2025. China’s 300 million middle class is projected to reach 1.4 billion by 2030, higher than the combined population of the US and European Union (EU), which is only 780 million.
Meanwhile, by 2020, India’s outbound travel market is estimated to reach 50 million, while China’s to 100 million by 2015, of whom, the larger proportion of spending revolves around leisure-related purchases.
Referring to a study done by Dr. Mark Faber, a wellknown US investment analyst, Packer said that he had found that 80 percent of the Chinese travelling outside the country for the first time, head for a casino and 90 percent of the Chinese who travel to the US visit Las Vegas, the biggest gambling city in the world.
Presenting a case study from Singapore Packer showed how it could increase its gross domestic product (GDP) by 14.5 percent in 2010, the year the worldrenowned Marina Bay Sands hotel opened.
Singapore’s two IRs contributed as much as 1.7 percent to GDP in 2010, while providing at least 60,000 direct and indirect jobs. Singapore received 1.5 million Chinese visitors in 2011, an increase of 35 percent year-on-year (YoY) and a 68 percent increase from 2009, before the IRs. Overall hotel occupancy too has increased over the last three years, averaging 85-87 percent, compared to 76 percent in 2009, before the IRs were built.