Cairns was once a stop on the hippie
trail and is now a popular destination for backpackers and
diving enthusiasts. By 2019, Tony Fung predicts it’ll be a
gambling destination to rival Macau.
The Hong Kong property developer last week won early-stage
government backing for his plans to build an A$8.15 billion
($7.6 billion) casino resort on a former sugarcane farm north of
the town. With 7,500 hotel rooms scattered around an artificial
lagoon, 18-hole golf course and water park, it’ll nearly triple
the region’s hotel accommodation and be bigger than Singapore’s
two casino resorts put together.
“We are extremely confident that Cairns can be a global
destination,” Justin Fung, Tony’s son and chief executive
officer of development company Aquis Resort at the Great Barrier
Reef Pty., said in a May 28 phone interview. “This is the
closest western city to China,” he said of the tropical
Australian city where the brother of former U.S. presidential
candidate Howard Dean dropped out in the early 1970s.
Investors locked out of Macau, which has licensed just six
casino operators to tap its $45 billion gambling market, are
looking to build new resorts from Sri Lanka to South Korea, the
Philippines to Japan, as China becomes the world’s biggest
source of outbound tourist revenue.
Australia’s Queensland state, hit by falling coal prices
that will help drive a A$324 million decline in government
mining royalties by June 2017, plans to issue three new casino
licenses to lure Asian gamblers and stimulate job growth.
Proposed developments in Cairns, Brisbane and the Gold
Coast could bring the same benefits that Genting Singapore Plc (GENS)’s
Resorts World Sentosa and Las Vegas Sands Corp. (LVS:US)’s Marina Bay
Sands brought to Singapore, Queensland Premier Campbell Newman
said last October. The hotels helped fuel a 20 percent jump in
tourist numbers to the city-state after they opened in 2010, he
“Everyone’s seen the success of Singapore, which is just
being used as a blueprint elsewhere,” Killian Murphy, an
analyst at CIMB Group Holdings Bhd., said by phone from Sydney.
“Potentially Australia as a whole becomes a better sell into
the Chinese market” if it has more resorts for tourists to
Chinese travelers overtook those from Germany in 2012 to
become the world’s largest source of outbound tourist revenue,
with spending on overseas trips rising 26 percent during 2013 to
$129 billion, according to the United Nations World Tourism
Cairns, where the existing Reef Casino Trust (RCT) posted just
A$24 million in revenue last year, is well placed to exploit
that market, said Fung. Another Fung family company has already
bought about 77 percent of the city’s only casino operator as
part of a A$214 million takeover.
“We’re sitting on the doorstep of the Great Barrier
Reef,” he said. “As the Chinese middle-class and wealthy
travel, one of the first things they’re going to embrace is the
natural environment. Cairns has that in spades.”
Floods, tornadoes, a strong Australian dollar and the rise
of competing markets in Asia have stymied growth at some resorts
along the Great Barrier Reef.
Properties on Dunk and Bedarra islands, for example, sold
in late 2011 for about 15 percent and 20 percent of their 2007
values respectively. Chinese-Australian billionaire William Han
paid A$12 million for Lindeman Island in 2012, a 10th of what
Club Mediterranee SA had spent to buy and expand it in the early
Sandwiched between the volcanic Atherton Tablelands and the
lagoon of the barrier reef and fringed by mangrove swamps
populated by man-eating crocodiles, Cairns has attracted Chinese
visitors since gold prospectors flocked to the region in the
It’s grown into a tourist spot and jumping-off point for
visits to the Great Barrier Reef, the world’s largest coral
system, “a perfect place to meet other travelers” whose
downtown is “more board shorts than briefcases,” according to
the Lonely Planet tourist guide. It’s home to more than 10
scuba-diving schools and 40 backpacker hostels.
Not everyone welcomes the proposed development.
“It’s horrific,” said Gayle Hannah, who came to the
region as an 18-year-old in 1971. “Most likely it’s going to
sit there and moulder and just be a headache.”
Hannah lived on communes in the hills behind Cairns in the
early 1970s, where “people had the good old peace, love and
brown rice philosophy,” she said. She became friends with
Howard Dean’s younger brother Charlie while working on a organic
farm in the region set up by three other Americans, “Ivy
Leaguers who’d left because of Kent State and Vietnam.”
The younger Dean later traveled to Laos where he was
captured and executed in 1974 by guerrillas. His remains were
discovered and repatriated in 2003, when the former Vermont
governor was running for the Democratic presidential candidacy
ultimately won by John Kerry.
Building such a big resort in the region is “crazy,” she
said. “The Asian market is looking for the things we already
have — the reef, rainforest, quiet, birds, good food,” she
The 343-hectare (848-acre) site for the Aquis resort will
include two theaters, a convention center, a sports stadium, a
water park, and an aquarium, as well as shops, restaurants, and
1,800 homes for staff, according to a July 2013 proposal to the
With eight hotels including 7,500 rooms once complete, it
will be as large as Moscow’s Izmailovo Hotel Complex, the
world’s biggest, and surpass the 5,044-room MGM Grand in Las
“I see more luxury projects creating a gaming destination
for the Asian market,” Fung said. “If you can create enough
quality product, then certainly the demand is there.”
The Fung family have spoken to financial institutions about
funding the resort and haven’t yet committed to any, he said. He
didn’t name any partners for the project.
Queensland may struggle to digest such a sharp increase in
gambling tourism, said CIMB’s Murphy.
“I just think three new integrated resorts is stretching
it,” he said. “Trying to convince a gambler to come here can
be difficult. You’re talking a nine- or ten-hour flight” from
cities in China.
The entire Tropical North Queensland region including the
city only contained 3,892 hotel rooms in June 2013, according to
government data. Those hotels had occupancy rates of 68 percent
in the year and average room rates of A$143 a night, about 25
percent below the national average, separate data show.
That’s not deterring Hong Kong-based Fung. The right
facilities can attract visitors in numbers like those who’ve
been lured by other casino resorts in the region, he said.
“We’re on the doorstep of Macau and we’ve seen the
incredible growth of that market. We’re close to Singapore and
we’ve seen what just two properties there are capable of
doing,” he said. “There is that aspect of ‘If you build it,
they will come’.”
To contact the reporter on this story:
David Fickling in Sydney at
To contact the editors responsible for this story:
Stephanie Wong at
Hippie Town Seen as New Macau With World"s Biggest Hotel