2 minute read
EMEA Editor Foreword Damien Connelly
Cost Control Heats Up
he yearly electricity bill for a small, multi-
Tsite operation will increase from €45,000 to €170,000 – its annual gas bill will also increase significantly. Challenging times present opportunities to change and innovate.
Casinos spend a reasonable percentage of their operating expenses on energy, with lighting, HVAC, and slot floors all major costs. As noted by Geoff Davis, CFO of Melco Resorts & Entertainment, in its recent 2Q filing, “Our teams remain focused on cost containment in this challenging operating environment.”*
* Melco has reduced its daily OpEx by over 40% compared to pre-COVID times.
There are pincer pressures on both top-line revenues and bottom-line profits. Consumers’ disposable incomes are declining at the same time operating costs are increasing (gaming revenues across EMEA have not matched the record runs recorded in America). EUwide inflation was 8.9% in July according to Eurostat, the highest since eurozone records began in 1997, with energy prices driving inflationary pressure.
Inflation in Australia and France was 6%, South Korea and Singapore 6.5%, South Africa and Germany 7.5%, and the U.S. 8.5%. Predictions are not buoyant for consumer leisure spend, and a recent update from a leading Silicon Valley venture capital firm strongly advised cost containment.
So intense is the pressure of increased prices that even energy-rich countries across EMEA are implementing measures to reduce their national energy consumption in order to contain costs, including turning off city lights and reducing HVAC use in public buildings.
Great examples of positive change are the renewable energy projects launched by Wynn Resorts in 2018 and MGM Resorts in 2021, as well as Las Vegas Sands’ focus on LEED and Better Buildings. For organisations who wish to learn from what others have
Wynn Las Vegas Solar Panels
done, one famous old building has retrofitted in spectacular fashion. Its transition to energy efficiency achieved a three-year payback, showing what can be done even with old properties.
Ukraine faces challenging times, as our friend Anton Kuchukhidze, Chairman of the Ukrainian Gambling Council explains on pages 39-40. Our publishing house has had an office in Ukraine for 15 years and we know this region intimately. My colleague, Peter White, has been invited to share his industry expertise by presenting at the conference of the Batumi Gaming Fest, being held on 30 September and 1 October. Following the Batumi Gaming Fest, we will be at G2E Las Vegas. Our team looks forward to seeing new and old friends soon.
