he boss of Grosvenor Casinos owner Rank Group said Middle Eastern high-rollers are choosing Paris and Milan over London, holding its venues in the capital back even as the rest of the country recovers.
Revenue for the year to 30 June came to £306.3 million for Rank, which also owns Mecca Bingo. This was up on the previous year but still 15% below pre-pandemic levels, mostly due to London revenue still being 26% below 2019.
Over the past six weeks, performance continued to pick up across most of the UK, but London revenue ticked up by only 5%.
CEO John O’Reilly told the Standard that the weak Londn recovery was due to a lack of big-spending customers from abroad.
“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.”
He added that while there were “a lot of moving parts” that contributed, the removal of VAT-free shopping appeared to be the biggest factor.
“You come here, you shop, you eat, you play the tables,” he said. “If they’re not coming to London, because things cost 20% more, that affects everything. It affects casinos.”
Mecca Bingo, meanwhile, was boosted by wet summer weather forcing people to look for indoor entertainment, with revenue up 17% in the past six weeks.
“I can’t remember saying to anybody before that Mecca is growing,” O’Reilly said.
The business has also faced labour challenges, especially in hiring croupiers, as around a third of these staff had typically come from the EU. That led to higher staff costs, which played a part in profits being halved, at £20.3 million.
The group expects to see a major boost when new reforms intended to boost the UK’s casinos, including increasing the number of machines permitted at a single venue and allowing casinos to offer sports betting, come into effect. O’Reilly expects these to be in place by summer of next year.
Shares are up 1.6%, to 90.8p.