Monaco’s biggest company has predicted a boost in tourism in the wake of this month’s wedding of Prince Albert, the principality’s ruler, and former Olympic swimmer Charlene Wittstock.
Founded 147 years ago, Société des Bais de Mer (SBM) owns the Casino de Monte-Carlo and the state’s most historic hotels, including the world-renowned Hôtel de Paris which counts Naomi Campbell and Sean Connery among its guests.
It has a monopoly concession to run the casinos in Monaco until 2027 and owns five of them, as well as 32 restaurants, an 18-hole golf course, opera house, tennis club and several of the Riviera’s hippest nightclubs.
Black clouds still linger from the recession, however. Revenue from SBM’s hotels rose by 10 per cent in the year to 31 March 2011, but there was a 14 per cent fall in casino takings, – more than half of total turnover.
It led to SBM’s overall revenue dropping 3 per cent to €361.7m, while its operating profit tumbled nearly 60 per cent to €21.7m ,thanks to the decline in the high-margin casino takings.
Visitor numbers at the casinos have been down since the introduction of a smoking ban in Monaco in November 2008 but SBM’s chief executive, Bernard Lambert, believes the recent royal wedding will drive trade.
“Definitely we do expect an increase in tourism and visitors during this year and the years after because of our sovereign wedding,” he said. “We believe that the focus on Monaco has already started in view of the visitor movements in Monaco since Easter.”
In response to the smoking ban, Lambert is taking gambling outdoors for the first time in Monaco’s history. “As we have completed phase one of our renovation, with an additional outdoor gaming terrace, and invested additional marketing funds in new markets, we believe that we should get better revenues in the medium term,” he said.
On the hotel side of its business SBM has been well-positioned to weather the downturn. “No nationality accounts for more than 15 per cent, which contributes to mitigate the risks,” said Lambert, who added that green shoots were coming from Asia, especially the south-east.
He predicted that business in Monaco this year “will be at least in line with last year” and that it will soon be back to its peak.
“With the increase that we have seen last year in the hotel market, and the trend seen currently, I guess that within the next two years we should be close to the years 2007 and 2008,” he said.
He has a daring strategy to ensure that SBM is leading this trend. Monaco covers just under 2sq km,so SBM has limited expansion opportunities to grow its revenues. Instead, it is putting its chips on managing hotels outside Monaco to draw more guests into the principality.
In 2012 SBM will open a five-star resort in Marrakesh and two in Abu Dhabi in 2013. “Our objective is to have a flag in London and then in Paris,” said Lambert, who added that “hopefully we may announce a couple of management contracts before the end of this year, most probably in France, Asia and the Middle East”.
The Monegasque state holds 69.5 per cent of SBM’s share capital, with the majority of the remainder traded on the Paris Euronext exchange at a market capitalisation of €520m (£458). Lambert expects to spend up to €800m on the expansion and his aim is to have a collection of 15 hotels over the next 10 years.