Blackstone will therefore invest in what it sees as a much-needed refurbishment of Crown Melbourne, following the acquisition of Crown Resorts for $6.5 billion last year. The acquisition was made amid increased pressure on the property as it was investigated for various offenses and breaches of Australian gambling laws.
Blackstone highlights future success of Melbourne property
However, Blackstone chairman Jon Gray expressed confidence in Crown’s prospects in a recent interview with The Australian, echoing the sentiment across the group that, despite its tarnished reputation, Crown Melbourne is a shining gem in the global gaming and hospitality industry.
All he needs to regain his favorite status is a boost. According to Mr. Gray, the Crown Melbourne is one of a kind, its size and prominence sure to attract crowds from all over the world.
Despite regulatory headwinds, ownership remains more important than ever to Blackstone’s global gaming and hospitality strategy. He added :
Melbourne is a story of physical recovery and our aim would be to invest significant capital there and improve the asset, which we believe will be great for the community and for tourism.
Jon Gray, President of Blackstone
Mr Gray said he was not really worried about the regulatory pressure Crown faced at the moment. Crown recently agreed to pay a $300 million (A$450 million) fine imposed by AUSTRAC, Australia’s financial regulator. It hasn’t made Blackstone any less confident in the property’s prospects, either.
Gray even drew a parallel with the Cosmopolitan in Las Vegas, a property the group acquired for $1.7 billion in 2014 only to resell a few years later for $5.7 billion. At the time, Blackstone had shown the same confidence, seeing the potential of the famous company despite its financial difficulties.
Current challenges should not deter investment enthusiasts
According to Mr. Gray, it was a combination of factors that made the sale of the Cosmopolitan go the way it did, as the company found the right managers to take care of the Cosmopolitan and break with the practices who had brought the company to the brink in the first place. Investments were also needed to renovate the venue and Blackstone was more than happy to provide this.
Ultimately, Gray said there was no evidence that Crown Melbourne and Crown in general would lose their appeal. Australia’s tourism industry is one of the country’s main economic drivers, with cities like Perth, Sydney and Melbourne being popular destinations that people want to visit.