Crown Resorts

13 November 2013

1. Sri Lanka: Compelling Macro Environment

Sri Lanka economic outlook

IMF upgraded Sri Lanka to a middle income country in 2010 3 successive years of strong GDP growth: 8.0% in 2010, 8.2% in 2011 and 6.4% in 2012 GDP valued at US$59 billion in 2012. On track to meet target of US$100 billion by 2016 GDP per capita estimated at US$5,500 in 2010. By 2012 had risen to approx. US$ 6,200 One of the highest literacy rates in South Asia 91.2%
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There are roughly 20 cities with populations over 2m within a 3.5 hour travel radius of Sri Lanka
Major cities within easy travel to Sri Lanka Notable cities Cities within approx. 1.3 hours Chennai (Madras) Bangalore Cities within approx. 2.3 hours Mumbai Hydrabad Cities within approx. 3.5 hours Karachi Delhi Kolkata (Calcutta) Dhaka

1.3hrs 2.3hrs 3.5hrs

Key: urban population >10m 5m - 10m <5m

Illustrative
Source: Per Travel Math, assumes 30 minutes for take off and landing

Significant existing lift and connection to Sri Lanka

Flights to SL from origin per week

Europe 21

130 flights/week 20 flights/week

Other Asia 36

Daily flights from India: Chennai, Mumbai, Delhi and Bangalore

Daily flights from South East Asia: Bangkok, Jakarta, Kuala Lumpur and Singapore Daily flights from the Middle East: Bahrain, Abu Dhabi, Doha, Dubai and Kuwait
Middle East 139 Maldives 39 SE Asia, 69

Source: Colombo airport website; only scheduled flights so likely understated for Charter flights

Sri Lanka is one of the most talked about tourist destinations globally

Lonely Planet recently rated Sri Lanka as the number one country to visit in 2013

Sri Lanka tourism outlook

Sri Lanka visitor arrivals 2009-2023 (annual arrivals by year; fcst and actual) 4.0m 3.5m 3.52m Sri Lanka tourism trends Sri Lanka Government promoting development of tourism infrastructure and attractions Government target of 2.5 million tourist arrivals by 2016 Requires tourist arrivals to grow by 24% annually from 2011 to 2016 on a compounded basis

3.0m
2.5m 2.0m 1.5m 1.0m 0.5m 0.0m 1.01m

2.50m

Actua l

Stated tourism goal

'09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23
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Source: Sri Lanka Tourism Board; assume linear growth between now and 2016 and five percent thereafter

2. Asian Tourism Opportunity

Indias GDP has been growing exponentially since 2000, a trend resulting in a burgeoning middle class
Growing exponentially quickly India GDP USD trillions Indias burgeoning middle class population

$3.03t

$3t

Size of Indian middle class estimated at around 170 million1. Expected to grow by 40-50 million per annum over the near term McKinsey Study estimates that by 2025 there could be 580 million middle class individuals in India2 With rising middle class affluence leisure related purchases such as travel are capturing a larger proportion of consumer spending

$2t

$1t FCST $0t '86 '91 '96 '01 '06 '11 '16
Source: IMF forecast; Innovation group; CLSA

1 Source: Indian National Council for Applied Economic Researchs (NCAER) Centre for Macro Consumer Research report, 2011 2. Source: The Bird of Gold: The rise of Indias consumer market, McKinsey Global Institute , May 2007

Indian outbound travel market is growing strongly

Indian outbound tourism market 2000-2020

Indian visitation trends Indian outbound travel has grown at a compound average growth rate (CAGR) of 11% from 4 million in 2000 to 15 million in 2012. The United Nations World Tourism Organization estimates Indian outbound travel to reach 50 million by 2020

(Millions of travellers)
60.0

50.0 50.0

40.0

30.0
2000-2012 CAGR: 11% 20.0 20.0 10.9 11.1 14.9 13.0 14.0

10.0 4.4 0.0 4.6 4.9 5.4

6.2

7.2

8.3

9.8

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Government of India, Bureau of Immigration, UNWTO

2015

2020
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The rising Chinese middle class

There are over 300 million middle class individuals in China alone - equal to the entire population of the USA By 2030 China is expected to have 1.4 billion middle class consumers compared to 365 million in the USA and 414 million in Western Europe

Source: Forbes: 2011

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Growing Chinese middle class increasing propensity to travel

China outbound tourism market 2000-2015

China outbound travel trends

(Millions of travellers)
110 100 100 90 80 70.0 70 60 50 45.8 47.7 57.4 83 million

Outbound travel is one of the preferred leisure activities for Chinas middle class amid rising spending power In the year 2000, just over 10 million Chinese tourists travelled abroad Outbound travel rose to 70 million people in 2011 CNTA estimates China outbound travel to reach 100 million people by 2015

41.0
40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2015 16.6 10.5m 12.1 20.2 28.9

31.0

34.5

Source: China National Tourism Administration CNTA & 2015 forecast by China National Tourism Association

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Understanding what Chinas rising middle class want

A 2011 McKinsey study found that the rapid increases in wealth, and the shifting social conventions that sanction the display of that wealth, are driving a growing infatuation for luxury goods By 2015 China will account for 20% of the global luxury market

Chinese consumers want luxury travel, hotels, world class restaurants, high end retail and the opportunity to gamble Chinese tourists prefer to visit major cities where they can enjoy these luxury experiences This all helps to explain why Chinese tourists are attracted to luxury integrated resorts

80% of Chinese travelling outside the country for the first time head for a casino and 90% of Chinese who travel to the US visit Las Vegas
Dr Marc Faber (US investment analyst)

Source: McKinsey & Co Mar 2011

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3. Singapores Integrated Resorts

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Singapores integrated resorts economic and tourism benefits

Economic and tourism impact of integrated resorts

Singapore monthly tourist arrivals Pre and post opening of the integrated resorts

First full year of IRs operation: Singapores GDP increased by 14.5% in 20101
Employment: Approximately 22,000 people are employed by the integrated resorts Support more than 40,000 jobs throughout the economy1

1.

Sourced from Ministry of Trade and Industry Singapore

Source: Singapore Tourism Board

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Singapores integrated resorts mainland Chinese visitors

Chinese tourists to Singapore 2002-2011

Impact on Chinese visitation to Singapore The significant increase in Chinese visitors to Singapore since the opening of its IRs to 1.58 million in 2011 represents:

(Millions of travellers)
1.6m

1.1m

1.2m IRs open

An increase of 34.7% on 2010

An increase of 68% on 2009 (before the opening of the IRs)

0.9m 0.7m

0.9m

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011
16

Source: Singapore Tourism Board Statistics

The entire Singapore tourism industry has benefited

Singapore hotel occupancy and average room rates 2009-2012

Impact on Singapore tourism industry Overall hotel occupancy increased over the last three years Averaging 85-87% compared with 76% in 2009 before the integrated resorts opened

300 86% 85% 250 247 200 189 150 218 257 86%

88 86 84 82 80 78 76%

100

76 74

50

72
0 2009 2010 Occupancy Rate (%) 2011 Average Room Rate (S$) 17 2012 70

Source: Singapore Tourism Board Statistics

Singapore Prime Ministers recent comments

Business-wise [the integrated resorts] have done very well, Mr Lee said. Revenue-wise the government has done very well. From an urban planning point of view, it has done a lot for our skyline ... its helped our image enormously. PUBLISHED: 13 OCTOBER 2012, AUSTRALIAN FINANCIAL REVIEW

The Prime Minister said it became imperative to build the two projects or lose out to rival jurisdictions in the region.
As the world was developing, as the business was developing, the casino became the integrated resort business not just making it a place to gamble.

Prime Minister Lee Hsein Loong

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Crown Resorts
13 November 2013

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