The Drop had great pleasure in hosting a finance focused industry lunch last week, with a keynote address from media personality and business and finance guru Ross Greenwood. He made some interesting points that are worth mulling over for clubs and hotels in the current environment.
Some of the main takeaways from his address were:
- Wages are in a very slow growth period after dropping from one of the highest average wages in the world. And whilst some people feel they might have less money to spend, the upside is that businesses can keep a lid on wage costs.
- The economy is actually very strong – low interest rates, dollar rising, unemployment rate dropping and property still solid.
- As the price of petrol, groceries and goods in general are coming down, we are consuming more and more. Australians are one of the biggest spending consumer demographics in the world.
- Retail in particular is enjoying a massive boom and over 92% of Australians still prefer to shop in bricks and mortar establishments as opposed to online. Shopping strips may be dying but retail centers like Stocklands are going through a massive expansion phase as people flock there as a form of entertainment – no matter what the weather or time of year.
- The gambling market is fragmented. There’s huge growth in online sports betting but a big decline in on course betting and at TAB outlets. People want the convenience and immediacy of betting online or wherever they are. This has big implications for clubs and pubs that rely on foot traffic.
- Total gaming revenue on poker machines is still increasing, but not nearly as fast as online gambling.
- Sydney population expected to double in the next 30 or so years to 8 million. Australian population expected to reach 45 million in the same period.
- Big growth areas forecast for tourism and education in particular.
- Clubs and pubs need to look for new opportunities to grow and expand and new ways to entertain people…but the future looks bright and the industry just needs to take advantage of the situation.
The lunch also featured an industry discussion panel with Edward Camilleri, CEO of Revesby Workers’ Club; Greg Russell Principal and Director from Russell Corporate Advisory and Mark Malloy owner of two leading Sydney Hotels including one of the top gaming sites, the Railway Hotel Lidcombe.
Take outs form the panel included:
- All agreed with the need to keep your gaming floor as up-to-date and as comfortable and convenient for gamers as possible to maximize ROI.
- A program of continuous planning and reinvestment back in the business with new amenities and services that fit the community was highlighted.
- Long-term planning in particular was important with a goal for 10 years into the future vital in strategic planning.
- Hotels looking to add additional gaming options in the sports betting area that has a positive flow back into pokies. It fits their market and drives traffic…and in particular gaming traffic to the hotel.
- A major challenge highlighted was the staff shortages, particularly with chefs at the moment. They believe this is only going to continue and could get worse as more casinos come online attracting staff away from suburban pubs and clubs.
For those who missed out on the day you will have an opportunity to watch Ross Greenwood’s full keynote address online shortly. You must join THE DROP as a member to access this exclusive content.