SkyCity’s NZ Facilities Exceed Expectations Following Reopening

SkyCity Entertainment Group saw New Zealand facilities perform ahead of internal expectations, following the reopening of entertainment and accommodation facilities in Auckland, Hamilton and Queenstown (excluding the Wharf Casino) on 14 May 2020.

The Auckland headquartered company still sees its SkyCity Adelaide Casino remaining closed, however it is said that development work on the property is progressing well and remains on budget and on time.

Based on the current three-stage approach to easing lockdown restrictions by the South Australian government, SkyCity expects to be able to reopen the establishment by late June or early July.

Despite restricted capacity constraints around mass meetings and physical distancing requirements, domestic customers returned to the SkyCity estate.

Gaming businesses in Auckland and Hamilton are said to have delivered “very pleasing” performances , especially in electronic gaming machines, while table game revenues have improved steadily after a slow start, reflecting a return to about 50% of normal business.

Having recorded 21,000 customer registrations as of May 31 , 2020, SkyCity’s online casino “continues to trade strongly” and was profitable in both April and May.

Customers and staff’s health and safety remains a key focus, with SkyCity adhering to the guidelines of the Ministry of Health for operating at alert level 2 by currently restricting entry to all New Zealand casinos of SkyCity to members of the Premier rewards only.

The non-gaming aspects of the business will take longer to recover, as their customer base has a reasonably high international component.

During the ramp up period, hotel occupancy averaged about 32%, with a much higher occupancy over the weekends (up to 90%) due to special offers.

Food and beverage sales are slowly rising, but the group predicts that they will remain substantially below pre-COVID-19 rates before the nation transitions to warning level 1.

Recently , the Government of New Zealand has stated that the alert level 2 settings would be checked on June 8, and that a change to alert level 1 could occur in the coming weeks. The reopening of the trans-Tasman border also appears increasingly likely in the coming months, however it is expected that other international borders will remain closed for some time.

Graeme Stephens, Chief Executive Officer of the SkyCity Entertainment Company, says that while SkyCity plans to be a smaller, domestically based business for the short to medium term, early signs that the domestic market is improving are promising to see.

“SkyCity has previously announced a need to reduce its New Zealand workforce by around 700 rostered employees in order to right size it for the smaller, domestic market. Unfortunately, this remains necessary to ensure that SkyCity’s businesses are sustainable in the medium and long term and can continue to support the thousands of jobs that will still remain.”