Second Gold Coast Casino Will Struggle to Deliver Return, Macquarie Analysts Say
The Gold Coast is “not the most attractive market” for the development of a new integrated resort with a gaming floor, local news outlet the Gold Coast Bulletin reported citing research firm Macquarie Research.
According to a recent analyst note by Macquarie, the construction of a multi-billion-dollar global tourism hub would have a considerable impact on the market. As previously reported by Casino News Daily, the development of global tourism hubs across Queensland is part of the state Government’s strategy to boost the local tourism industry, which is believed to be worth over A$25 billion and to support more than 200,000 jobs.
Macquarie’s analysis was released just as the Queensland Government is gearing up preparations to weigh in on whether the state’s Gold Coast region needs a second integrated resort with a casino floor. It is believed that state MPs will announce their decision before Christmas.
News emerged earlier this month that the Japanese division of Florida gaming and hospitality company Hard Rock International has approved a A$2-billion plan for an integrated resort development in the Gold Coast.
According to Macquarie analysts, the region is not the most attractive market for a property of this kind, “relative to other regions within Australia.” The research firm also advised that the Queensland Government assess “the net community benefits and determine whether [a second integrated resort] deters The Star Gold Coast from completing its recently approved A$2 billion masterplan.”
Macquarie analysts believe that a development larger than A$400 million “would struggle to deliver an ‘appropriate return.’”
Hard Rock’s Gold Coast Expansion Plan
The company has said that it would look to replicate namely its Tarragona property, if it is given the green light by the Queensland Government to develop a resort in the Gold Coast. Aside from casino, the property will also feature 1,000 hotel rooms, retail area, an entertainment center, and a number of other facilities.
At the same time, Australian casino operator The Star Entertainment Group received earlier this month Government approval for its A$2-billion masterplan for the expansion of its The Star Gold Coast property. The recent announcement represented the second phase of an overall expansion scheme, the initial phase of which was given the nod by MPs in late 2016. That first phase included the construction of five new towers at the existing property.
The recently approved plan includes the addition of new restaurant and bar precincts, entertainment and retail options, and new resort facilities. Once its expansion is complete, The Star Gold Coast will feature 3,000 hotel rooms and apartments.
The Star has said that each stage of its expansion masterplan will be dependent on “the market and competitor landscape at the time.”
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