[bsa_pro_ad_space id=1 link=same] [bsa_pro_ad_space id=2]

Skip to Content

Operator News

UK – Tourism tax damaging visitation to Grosvenor’s high-end London casinos

By - 21 August 2023

Tourism tax is slowing the recovery of casinos in London, according to John O’Reilly, Chief Executive Officer of Rank Group, which owns Grosvenor Casinos.

Revenues from Grosvenor’s London casinos is still 26 per cent lower than pre-pandemic figures whilst outside of the capital revenues are 15 per cent below what they were before COVID.

Speaking to the Evening Standard, Mr. O’Reilly said of the slow recovery in London: “That’s a function of higher spending, mainly Middle Eastern, customers not coming into town, or coming in but less,” he said. “We used to have lots of middle eastern customers coming in for seven or eight weeks across the summer. Now they might come here briefly but they mostly stay in Paris or Milan.”

“You come here, you shop, you eat, you play the tables,” he added. “If they’re not coming to London, because things cost 20 per cent more, that affects everything. It affects casinos.”

As well as VAT-free shopping, Mr. O’Reilly also highlighted higher staffing costs with the group facing higher costs in hiring croupiers with a third coming from the EU. 

His comments came as Rank announced operating profit for the full year of £20.3m, in line with the
upgraded guidance provided in April 2023, but down on the prior year of £42.5m. Scond half profit performance was stronger than the first half, with underlying operating profit of £16.1m, compared with just £4.2m in the first half.

Grosvenor venues revenue grew four per cent in the year with customer visits growing seven per cent on the prior year with customers continuing to return to casinos following the lockdowns of 2020 and 2021.

Mecca venues revenue grew seven per cent, with customer visit volumes up four per cent, continuing the slow recovery from the impact of the pandemic, particularly on the older cohort of bingo customers who have been slowest to return.

The Mecca estate now more profitable and sustainable following the closure of 15 Mecca clubs
in the year, taking the Mecca estate to 56 venues.

The new financial year has started strongly across all of the businesses with overall underlying Group
LFL NGR ahead by 16 per cent compared with the prior year. Grosvenor venues revenues have grown 17 per cent in the first six weeks with visits up 13 per cent. Grosvenor venues trading performance outside London is strong with NGR up 25 per cent and visits up 15 per cent, but the performance in London is softer with revenue up only five per cent on the same period last year.

Mecca venues had a very strong start to the year, benefitting from the wet weather in July and early August with NGR up 17 per cent. Enracha venues NGR is ahead of the prior year by 12 per cent. Digital NGR is up 13 per cent in the opening six weeks, continuing to benefit from new product and service
enhancements and greater levels of personalisation for our customers.

Despite the generally challenging trading conditions, with inflation still running high and the increase in interest rates impacting consumer discretionary expenditure, we expect to see good levels of revenue increase year-on-year and to grow our profitability in 2023/24.

Mr. O’Reilly, Chief Executive of The Rank Group Plc said: “The return of customers to our Grosvenor and Mecca venues continues to pick up and our second half numbers give cause for optimism after a very challenging couple of years. During that time, our UK venues have faced a surge in energy costs, high wage inflation, a tightening in the regulatory environment, the slow return of overseas visitors to London’s casinos and the more general pressures on the consumer’s discretionary expenditure. However, energy costs have stabilised, inflation appears to now be easing, customers continue to slowly return to both our Grosvenor and our Mecca venues and we now expect to deliver good levels of revenue and profit growth.

Our Digital business is performing strongly, and we have a strong pipeline of customer facing developments in both our UK and Spanish brands to drive revenue and profit growth. We are very
focused on delivering a market leading cross-channel experience for our Grosvenor and Mecca customers with several key developments landing during this new financial year.

“The UK Government’s white paper on gambling reform sets out a number of important public policies which will enable the land-based bingo and casino sectors to modernise the customer proposition to better meet the needs of today’s consumers. The delivery of the secondary legislation to enable these reforms cannot come soon enough and we are well advanced with plans to maximise these
opportunities. I am hugely grateful to my colleagues across the Group who continue to excite, entertain and protect their customers, provide support to their local communities and contribute fully to the progress we are making in the transformation of Rank.”

Share via
Copy link