James Packer’s Crown group of casinos bases its large and continuing investments on its strong belief in the incredible power of the rising Asian, particularly Chinese, middle classes.
At its annual general meeting in Perth today, Crown pointed to its net profit of $655.8 million, up 66% on the previous year.
And chairman Packer outlined the reasons for his belief in the power of the rising middle class of Asia:
Two-thirds of the world’s middle class will come from Asia by 20130
There are more than 300 million middle class consumers in China alone, equal to the entire population of the US. By 2030, China is expected to have 1.4 billion middle class consumers compared to 365 million in the US and 414 million in Western Europe.
This translates into spending on travel
And as the Chinese middle class gets wealthier, they are increasingly travelling for education, recreation, enjoyment and new experiences. China is the world leader in tourism spending, having grown its tourism spend 10 times from US $13 billion in 2000 to $129 billion in 2013.
China’s outbound travel is the fastest growing in the world
In the year 2000, 10.5 million Chinese people travelled abroad. This number has risen to 97 million in 2013, and is now estimated to reach 200 million by 2020.
China is Australia’s most valuable tourist market
The total economic value of inbound Chinese tourism to Australia is estimated to increase $8.2 billionCrown by 2022, demonstrating that China is Australia’s most valuable source of tourism.
Packer says there’s been much talk about how businesses can meet this market and position themselves to take advantage of this burgeoning market.
“Crown is not just talking about this, it underpins our business decisions and future strategies,” he says.
The Boston Consulting Group’s submission to the Australia in the Asian Century White Paper, identified and profiled 13 successful Australian export companies and one of which was Crown.
The report said: “Crown has a relentless focus on customer experience. Through its training facilities and hiring practices Crown aims to ensure its Australian staff members are Asia-literate. Multi-lingual staff members assist customers with their needs and casino services are offered with the Asian customer in mind.”
About $1.1 billion of Crown’s $3 billion revenue in in the last financial year was estimated to be generated from international visitors.