Will casino deal mean the jackpot for hospitality?

08 February 2007 by
Will casino deal mean the jackpot for hospitality?

As Manchester celebrates its winning bid to host the country's first supercasino, the city's hospitality operators will be hoping to cash in. Meanwhile, some of the losers are already starting to revise their plans, as Emily Manson reports

The Casino Advisory Panel's recommendation last week that 16-1 outsider Manchester should host the UK's only regional supercasino sent shock waves through the hospitality and tourism industries.

As devastated losers Blackpool and Greenwich lick their wounds and consider mounting legal challenges, questions remain over whether the proposed casino will prove beneficial for Manchester's tourism industry and whether now is a good time for operators to invest in hotels and restaurants.

The Sportcity complex in Beswick, a run-down area near the City of Manchester stadium, will host 1,250 unlimited-jackpot gaming machines. It's hoped the site, which will contain a multipurpose arena, training centre, swimming pool, urban sports venue, restaurants, bars, a nightclub and a hotel, will bring £265m of investment and create up to 2,700 new jobs.

Preferred operator

Sol Kerzner, South African billionaire and founder of Sun City, was the preferred operator during the bid process. But because of the downsizing of government recommendations from eight regional casinos to one, Manchester City Council has confirmed it will now rerun the bidding process before finalising the operator. Large operators including Stanley Genting, Harrah's, Las Vegas Sands, Aspinalls, Ranking Gala and Sun International are expected to run.

Sir Howard Bernstein, Manchester Council's chief executive in charge of securing the bid, is convinced the development will prove lucrative for the city's leisure industry. "This will bring massive investment to Manchester, creating much-needed jobs and training opportunities in the catering, hospitality and leisure industries," he said.

John Philipson, general manager of the Lowry hotel and executive member of the Manchester Hotels Association, agreed the casino development would help with the regeneration of the area and said the city would embrace the opportunity to increase tourism.

"The city needs to continually refine and develop its offering to maintain its vibrancy and attract both domestic visitors on extended stays and tourists from abroad," he said. "Foreign travellers will see the casino as yet another draw on top of the art, cafés and culture available in the city and surrounding areas."

But Rob Howarth, associate director of retail and leisure at property agent Jones Lang LaSalle, sounded a note of caution, warning that a change of government could hit hospitality profits.

Different stance

"Due to the emotive nature of this subject, future governments may take a different stance on casino legislation, which could result in the retightening of legislation," he said. "This in turn could impact on the associated leisure market and hotels - especially if bookings are driven by the casino - and consequently operators' potential revenue, profit and ability to pay rent."

While Manchester looks forward to a potentially lucrative future, Blackpool and Greenwich - the supposed frontrunners in the race - are taking stock, having admitted that they had no "Plan B".

Steven Weaver, Blackpool Council's chief executive, said: "Without this decision we are in charge of managing this town's terminal demise."

Doug Garrett, chief executive of regeneration body ReBlackpool, admitted the decision was "a smack in the face", but confirmed that it would keep on fighting for a regional casino. "We're hopeful that the overwhelming weight of public and political support could influence the final decision," he said. "For the past six years we've argued that casino-led regeneration is the best option for Blackpool."

Regenerating dome

Meanwhile, plans for regenerating Greenwich's £789m Millennium Dome, which had included two hotels and an exhibition centre as part of an entertainment district, now face the axe, although the regeneration of the area as a whole will continue.

London mayor Ken Livingstone labelled the decision a "missed opportunity", adding that he still supported the proposal for a casino in the Dome and would continue to lobby for one there.

Anschutz Entertainment Group Europe, the controversial US company that would have built the London casino, said it was now considering its options.

The dust is settling on the supercasino recommendations, but there are sure to be plenty of twists and turns yet, and hospitality operators, like an eagle-eyed card player, will be watching closely, hoping they can hit the jackpot.

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