The President of US private equity giant Blackstone says the company is planning to invest heavily into a much-needed renovation and upgrade of Crown Melbourne following its AU$8.9 billion (US$6.5 billion) acquisition of the property’s parent company, Crown Resorts, last year.
Speaking with The Australian while in town this week, Jon Gray said he was confident Crown could become one of the world’s leading casino operators again in the coming years but that significant improvements were required across its long-time flagship operation in Melbourne.
Describing Crown Melbourne as “truly one of the kind, given its scale”, Gray explained, “Melbourne is a physical turnaround story and our objective would be to invest significant capital there and enhance the asset, which we think will be great for the community and great for tourism there as well.”
On Crown’s recent regulatory issues, which found the company deemed unsuitable to hold casino licenses in Melbourne, Sydney and Perth but given two years in each market to return to suitability, Gray added, “We want to be a best-in-class entertainment company and hotel business. We understand that there was a lot that wasn’t done right and we’ve got to come in here and operate at the highest standard, the highest standard from a compliance standpoint, but then make them as attractive as possible to customers.”
Despite the challenges still faced by Crown, which last week agreed to pay a whopping AU$450 million (US$293 million) fine to settle litigation by Australia’s financial crimes watchdog AUSTRAC, Gray has likened Crown – and particularly Crown Melbourne – to The Cosmopolitan of Las Vegas.
Blackstone famously acquired the struggling Las Vegas Strip property for US$1.7 billion in 2014 and eventually sold the business for almost US$5.7 billion after investing heavily into the property.
“If you went back to that (Cosmopolitan) story, it was a company that had been built, foreclosed on and had a number of staff issues and needed capital to complete it,” he recalled. “And we went in, we brought in a lot of capital and hardware, but then software in terms of restaurants and entertainment, a great management team.”
Asked by The Australian what role Crown’s three Australian casinos could play moving forward, Gray replied, “We think these are great tourism assets. And frankly, I think tourism is one of Australia’s great growth engines. Sydney, Melbourne, Perth – these are world-class cities that people want to visit. So isn’t it a good idea to own world-class assets in those cities?
“It’s a new day at Crown. That’s what we want to convey to people – we’re committed to operating this business at the highest standard possible and ultimately, we want tourists to come back in a big way.”