Chinese junkets will be integral to the success of the proposed $8.15bn Aquis Great Barrier Reef Resort set to open 13km north of Cairns, Queensland. Tony Fung, the Hong Kong billionaire behind the project, noted the operation would be based on the Macau model and setup junket tours to bring in big spenders.
“I have recognised the unique stability of Cairns to develop an integrated resort, based upon the Macau model,” noted Fung. “Facilities of the like of Aquis don’t only attract Chinese mass-market middle class, but also the big spending, high value, ever expanding Chinese upper class.”
Having already spent some $30m on government applications and advocacy work on the ground, Aquis is now waiting for clearance on probity and its environmental impact study. If it receives final approval, construction is scheduled to begin in 2016 with a 2018 opening. The project is expected to create 7,000 construction jobs and 20,000 full-time positions when complete.
The plan is to redevelop 343ha of rural land into a large-scale integrated tourism resort. Aquis expects to attract more than 1 million visitors to Cairns and Far North Queensland every year, injecting billions of dollars into the local economy. Fung has received approval by the Foreign Investment Review Board to acquire the land on Yorkeys Knob for approximately $40m from a sugar cane farmer.
Renderings of the dramatic project submitted to the government resemble something from science fiction. The pioneering complex would pay homage to its surroundings, integrating the essence of the Great Barrier Reef into the facility. Two internal lagoons, a 65ha lake and one of the world’s largest aquariums will intertwine throughout the inimitable facility, giving Aquis a unique draw.
Developed in two phases, Aquis Great Barrier Reef Resort will be Australia’s largest integrated resort and compete with the best in the world. The huge $8.15bn budget will be spent on 8 luxury hotels with a total of 7,500 rooms. It will also house 1,200 apartments, 135 villas, an 18-hole championship golf course, a 25,000-seater stadium and a cultural heritage centre.
The profit-centre of the operation will be two world-class casinos that will aim to attract both mass-market tourists and VIP gamblers. These high rollers account for the largest revenue source in Macau, but a recent government crackdown on junkets is forcing a number of these players to look for alternative gambling destinations, a selling point Fung is using to attract investment for the project.
“I see our customer base being as far as the west coast of America and even the Middle East,” expressed Fung. “Any place that an airplane can fly nonstop, that is our customer base. The hardware, as I would put it, of the Cairns area with the two world heritage areas is not going to change. The predominant Asian customer base is not going to change.”
In a recent interview with The Weekend Australian, Fung confirmed junkets would be needed for the success of his ambitious project. While Australian casinos already use junkets from Asia, the Hong Kong tycoon explained the Cairns properties would focus on independently run junket tours.
“We will use [junkets] if they can deliver the business in a legitimate, legal way,” commented Fung. “There are two aspects to this, one is the business aspect, the other is the legal aspect. It is the norm in Macau to give out 40 percent commissions, it might even be a bigger share that we have to give out to bring them out to a new property.”
Fung recognised that junket operators, which bring high-stake players to casinos, have been previously linked to “triad” organised crime for money laundering in Macau. It has also been publicised that operators extend lines of credit to customers, who pay off debts on returning to China as a way to avoid restrictions on the amount of money they can legally take out of the country.
Junkets can also be operated under a legal framework, noted Fung. He said Aquis would only deal with operators who followed Australian laws and implement transparent systems to attract valuable players. Many junkets now operate legitimately and the attached stigma has been earned from previous decades.
Leading gaming analyst Ben Lee, who heads up Macau-based gaming consultancy iGamiX, added that junkets would be “crucial” to the Cairns casinos. “The people Tony Fung has to win over are the junkets,” said Lee. “The junkets do all the marketing. The junkets are able to market to players one-on-one. That’s a far stronger tool that doing brand or exposure marketing.”