The Star hospitality operations in Queensland and NSW – including its hotel, restaurant and bars tenants – face an uncertain future if casino operator enters voluntary administration or has its administration enforced over poor financial results.
“All bets are off,” said one hospitality operator insider if its landlord, The Star Sydney, goes under.
“It’s not pretty. Footfall is at record lows. It’s not good at all and morale is at its lowest as well,” the operator added. The combined forces of a new registered gaming card, capping punters at $5000, will push gamblers to pubs, The Star outlaying $300 million on compliance and facing further fines of anything from $130-$330 million, the future looks grim.
One high is that numbers, though, are expected to lift with the securing of MJ, the Michael Jackson musical, at the Lyric Theatre.
Meanwhile, at Brisbane’s recently opened $3.6 billion Queen’s Wharf precinct, one operator said their operation was run as a tenant of Destination Brisbane Consortium, not the financially troubled casino operator itself.
“It’s business as usual,” the operator said. If The Star Entertainment Group came to grief, and the gaming operation was sold, “just the landlord would change,” the insider said. Food and beverage venue staff have also been assured their jobs are safe, the operator said.
Inside The Star, at the $3.6 billion Queen’s Wharf redevelopment
While hotel and F&B operations continue to trade at all Star venues, the future of the casino operator and its connected hospitality operations are in question as it faces its ongoing financial crisis. It continues to seek the release of $100 million in loans but governments in both states have declined to offer any financial assistance.
The privately-owned and operated Queen’s Wharf joint venture has a lead partner of The Star Entertainment Group, alongside two Hong-Kong based partners, Chow Tai Fook Enterprises and Far East Consortium.
The aim of the precinct was to attract an extra 1.39 million visitors to the city each year, adding a further $1.69 billion annual increase to the Queensland tourism.
But embattled casino operator Star Entertainment has warned that it faces “material uncertainty” over its future. In its quarterly update to investors on Monday, ASX-listed Star said revenue had fallen 15 per cent in the December quarter, citing expenses caused by a series of regulatory and compliance problems, among other costs.
The Star offers a wide range of restaurants, bars and cafes at its destinations, including Japanese venue Sokyo, in Sydney, Brisbane and Gold Coast venues, chef Luke Nguyen’s Fat Noodle in Brisbane and Sydney and versions of Black steak and seafood restaurant in both Sydney and Brisbane.
At Queen’s Wharf Nguyen’s offers the new Luc Lac, Zac Sykes’ venue Azteca on the Terrace, plus Italian restaurant Cucina Regina, by Gambaro, the Mediterranean Dark Shepherd and Pompette’s French-style dining. Sky Deck restaurants include Aloria, Babblers and Cicada Blu. Other Sydney Star venues include the Sports Bar and Cherry bar, which are also replicated in Brisbane, plus there is the LiveWire entertainment venue.
In 2015, the Destination Brisbane Consortium was chosen by the Queensland Government to transform the historic Queen’s Wharf site following a tender process, which came about after a state government announcement in 2012 to redevelop the precinct.
The Queen’s Wharf redevelopment resulted in the closure of the heritage-protected Treasury Casino in the CBD with plans to turn the building into a high-end boutique retail centre. That is yet to happen with only the hotel aspect of the former casino still operating.
The consortium said it would deliver $272 million to the Queensland Government before the development opened then guarantee minimum state gaming tax payments of $880 million in total over the first 10 years of operation.
Who owns The Star Brisbane
The Star Entertainment Group (50 per cent owner) – The Star Entertainment Group (formerly known as Echo Entertainment Group) is an ASX top-100 listed company that owns and operates Treasury Brisbane, The Star Gold Coast, and The Star Sydney. It purchased the Sheraton Grand Mirage Resort Gold Coast in 2017. The Star Entertainment Group also manages the Gold Coast Convention and Exhibition Centre on behalf of the Queensland Government.
Chow Tai Fook Enterprises (25 per cent owner) – Chow Tai Fook Enterprises, a private Hong Kong investment company, with a business portfolio in more than 50 cities across Greater China, Asia, Europe and the Americas. It also operates one of the largest department store chains in China and has approximately 60 hotels worldwide through the Rosewood Group and third-party hotel brands such as Four Seasons, Hyatt, Marriott, and Renaissance.
Far East Consortium (25 per cent owner) – Far East Consortium, one of Australasia’s largest developers, has been operating in Australia for more than 20 years and has operations in property, hospitality and car parks. It has a strong property and hotel development track record and an experienced on-the-ground Australian development team. Among its significant works portfolio, it is involved in the development of hotels for The Ritz-Carlton in Australia, plus large residential developments in Melbourne and Perth.
Who owns The Star Sydney
Apart from The Star Entertainment Group, pub baron Bruce Mathieson owns 9.586 per cent of the Sydney operations. Other major investors include Perpetual Investment Management Ltd at 4.990 per cent, pharmacy group Washington H. Soul Pattinson & Co. Ltd at 2.883 per cent and Far East Consortium International Ltd.
which has just 2.808 ownership of the Sydney operations.
Feature image: The Star Sydney. Photo: iStock Kokkai Ng
