The Reef Hotel Casino located in Cairns will experience a big drop in profits this year thanks to recent renovations. The Reef Casino Trust is reporting that the casino will see a hit of $3 million which drops the distributable profit to $12 million for 2016 from $15 million in 2015.
The Reef Casino Trust is the owner of the property where the casino and the Pullman hotel are located, who estimated the profit loss due to the renovations. Allan Tan is the Executive Director of the Trust who stated to the Australian Securities Exchange that even though there is a drop, the hotel operations would perform strongly.
According to Tan, the performance of table games was up when compared to 2015. Tan stated that the disruptions caused by the renovations on the ground floor had a greater impact on the electronic gaming than the operator had expected. There was a reduction of entertainment based on the renovations as well as local competition increasing.
Tan further stated that the major renovations should be pretty much completed by the end of 2016 and the property can look forward to the new facilities that are located on the ground floor which will provide a more competitive product to patrons and customers.
The upgrades cost $6.5 million to complete and most should be done by Christmas with all work coming to an end by the Chinese New Year in January. The reduced turnover of the property was due in part to the former Vertigo Bar closing and entertainment options being reduced. However, the Bar 36 opened in November and helped to produce revenues and appears to be better than the old venue.