Crown updates shareholders on operations as staff shortages bite

Staff shortages have gripped Crown Resorts’ three venues in Perth, Melbourne and Sydney.

The Australian reports that the staff shortages are a “significant issue” at Crown Resorts, hurting operational capacity.

The under fire James Packer-backed company, which is hoping to secure its operating licence for its Sydney casino in early 2022 is the latest company to report staff shortages following extensive domestic and international border restrictions.

In the group’s investor presentation on December 13, Crown said operating restrictions have been progressively lifted for fully vaccinated visitors and staff at its flagship business Crown Melbourne.

Its main floor gaming revenue was around 75 per cent pre-COVID levels over the two weeks to December 5, with non-gaming revenue around 65 per cent.

“Encouraging weekend visitation, however mid-week performance continues to reflect subdued activity in the CBD and reduced foot traffic,” said Crown, which is chaired by Ziggy Switkowski following a board clear out.

Crown Perth activity remains mixed

Business at Crown Perth has been mixed with main floor gaming revenue down eight per cent from July 12 to December 5 from the same period in 2020, with “table games performance remaining subdued”.

It was up five per cent over the same period in 2020.

However, non-gaming revenue surged 31 per cent from July 12 to December 5.

That compares to an 11 per cent rise over the same period in 2020.

Crown said “non-gaming demand remains strong, particularly on weekends, supported by the leisure market.”

The group said its Crown Sydney hotel has been “well received” following its reopening on October 11.

“Occupancy has progressively improved since reopening, averaging around 40 per cent since mid-November with higher occupancy on weekends and average room rates around twice the competitor set in the Sydney market,” Crown said.

“Demand for food and beverage venues has been strong with average spend exceeding expectations, albeit operational capacity remains restricted given current staff shortages across the hospitality industry.”

However, Crown said limited domestic and international travel “continues to impact performance, particularly mid-week.”

Crown falls silent on Blackstone proposal

Crown made no mention of Blackstone’s offer in its presentation slides released to the ASX after announcing on December 2 it would open its book to Blackstone after receiving a $12.50 cash a share offer on November 10.

In Crown’s statement, it said the proposal does not represent “compelling value” for its shareholders, but will allow Blackstone access to non-public information to allow it to undertake initial due diligence inquiries on a non-exclusive basis so it can table a revised offer that “adequately reflects the value of Crown”.

“The Crown board is focused on maximising value for Crown shareholders and will carefully consider any proposal that is consistent with this objective,” Crown said on December 2.

The New York-headquartered Blackstone already owns 10 per cent of Crown and has been courting the scandal-plagued casino operator for months.

It lobbed its first takeover bid at $11.85 per share in March and increased that to $12.35 in May, but Crown said both were too low.

While previous offers were rebuffed, Blackstone is now dealing with a different leadership team at Crown following former executive chairman Helen Coonan’s departure amid damning revelations in Victoria’s royal commission into Crown.

Former Telstra and Optus boss Ziggy Switkowski officially took over as chairman last Wednesday after receiving clearance from state gambling regulators, joining former Lendlease boss Steve McCann who joined the company in June.

The Star Entertainment Group, which owns casinos in Sydney, Brisbane and the Gold Coast, is also interested in taking control of Crown and lobbed a merger proposal in May.

It withdrew the offer, however, when it appeared there was a real chance that Victoria’s royal commission into Crown would recommend that it lose the licence for its flagship Melbourne casino.