SKYCITY Entertainment Group is a tourism and leisure company which is located in both New Zealand and Australia. There are 3 cities in New Zealand where this business is run, they are in Auckland, Hamilton, and Queenstown, while in Australia this business is located in Adelaide and Darwin (Skycity Entertainment Group, n.d.). Skycity offers a luxury meets with the leisure where people can enjoy and spend their time. In this paper, I will explore more about Skycity Group with its various interesting activities and attractions. Furthermore, I will analyze its tourism business regarding to the management strategy to compete with other new entrants and other competitors in the market by assessing the demands and trends in the tourism and hospitality industry in New Zealand as a whole, and Auckland in specific. By knowing the demands and the trends in the tourism and hospitality industry, I will then analyze the target market Skycity Group projected. Lastly, I will also analyze the company’s management strategy that does not only work for the benefit of the company, but also to the environment and the local communities.
SKYCITY Entertainment Group initially founded by Harrah’s Entertainment and Brierley Investments Limited in 1994 to February 1996 within the name “Sky City”. The business then rebranded their name and changed it into “SKYCITY” in 2003-2004. Starting from Auckland, the business then spread over to several cities in New Zealand and Australia. In December 2000 Skycity opened its business in Queenstown also in the same year opened it in Adelaide, Australia. In September 2002, the business expanded to Hamilton then two years later another one was also opened in Darwin, Australia. Previously in New Zealand, the business also run in Christchurch city, but due to the huge devastated earthquake in 2011 happened there, the business closed down immediately (Skycity Entertainment Group, n.d.). The expansion of this business with its rapid growth convinced that Skycity Group becomes one of the biggest tourism company in two developed countries, New Zealand and Australia.
Skycity offers various yet interesting activities and facilities like casino gaming facilities, hotels, restaurants, and bars. Those activities can also be found in Skycity Auckland, where there are variety of fun activities people can enjoy like the Sky Tower which provides various activities like Sky Jump, Sky Walk, Dining and Sky Tower Lighting (Sky Tower, n.d.); 14 restaurants and bars like “Masu”, “Huami”, “The Grill”, “The Sugar Club”, “Gusto”, “Orbit 360o Dining”, “Depot”, “Federal Delicatessen”, “Fortuna Buffet”, “Andy’s Burger”, “Bellota”, “Spice Alley”, “Sky Café” and “Sammy’s Lounge” (Skycity Restaurants, n.d.); 3 hotels for example “The Grand Hotel”, “Sky City Hotel” and “Horizon Hotel”; Skycity Casino; Skycity Convention Centre and Skycity Theatre (Skycity, n.d.). Outside all those attractions and facilities, Skycity Auckland also provides car park with capacity up to 1,960 parks, and this remains to be the biggest car park in Auckland (Car Parking, n.d.). Furthermore, Skycity also provides many fun events that attract all ages of people starting from kids to adult, for example “Enchanted Winter Snow Globe” that happened from 18 July 2018 to 31 July 2018, “Skycity School Holidays” that started in 18 July 2018 and will be ended in 22 July 2018, “Skycity Sing-A-Long Movies” that started from 20 July to 22 July 2018, and still many more (Skycity, n.d.). These various activities with the high class facilities and accommodations provided by the Skycity Group entice international tourists even domestic ones to come over.
In the tourism sector, New Zealand remains to have fast growing number of tourists each year and these tourists expenditure bring many benefits to the country. According to the data from the March 2016 research, it is stated that total tourism expenditure from both international and domestic tourists is $34.7 billion (New Zealand Tourism, 2016). This huge number shows that tourism plays the biggest role in New Zealand economy since it supports the largest export industry in terms of the earning of foreign exchange. In addition, tourism also opens up opportunity for jobs to many people including locals, this can be proved as 7.5% workforce or 188,136 people in New Zealand comes from tourism industry (New Zealand Tourism, 2016). In terms of country’s GDP, tourism sector directly contributed to New Zealand’s GDP as much as $12.9 billion or 5.6% of total GDP (New Zealand Tourism, 2016).
Outside all those benefits, the fast growing number of tourists in New Zealand each year also brings negative impact to the local people. Furthermore, this also affects the demand and trend of the tourism in the country. New Zealand tourism has become a trending especially after the box office movies like “The Hobbit”, “Lord of the Rings”, and “Narnia” are made in New Zealand (Business Monitor International Ltd [BMI], 2017). People starts to come to New Zealand and the idea of taking pictures in the movie set and enjoying its pure natural attractions have become the trend of the tourists to come over. As a result of more people coming to New Zealand, it has been a rising number of international visitors to New Zealand, approximately 1.2 million, in the last five years (Cropp, 2018). This huge number of tourists sadly also brings a quite negative impact for the local people. Cropp in 2018 continued to explain that local communities of New Zealand feel that their country is becoming overcrowded, environment is slowly damaged, and better infrastructure also more accommodations are needed.
The exceeding expectation of the growing number of tourists in New Zealand becomes a factor of the demand in the country’s tourism industry, especially the demands around accommodations. The huge number of visitors in New Zealand each year need to be balanced with the adequate accommodations. New Zealand currently has relatively small hotels, locally-owned boutique hotels, motels, guesthouses, and not so many international chain hotels invested their business there (BMI, 2017). This obviously brings issues when it comes to tourists’ overnight stays. Skycity Group sees this as an opportunity and they keep on building their accommodation to meet the needs of the visitors with their increasing number every year.
Skycity Auckland, until today there are 2 hotels built in the Auckland Central Business District (CBD), and they are now building one more hotel that will be opened in the late 2019 called Horizon Hotel (Skycity, n.d.). According to the research done by Ministry of Business, Innovation and Employment New Zealand in 2018, Auckland holds a title as the region with the most spending of the domestic and international tourists that come to New Zealand. Total spending of both domestic and international tourists reach $8,340 million and equals 30% of market share (MBIE, 2018). This shows that Skycity Group indeed works to meet the demands with the tourists that come to New Zealand especially to those who come to the big region with the most spending of tourism like Auckland.
Meeting the needs of the people especially international tourists that come to New Zealand has been a management strategy Skycity Group is working on. As mentioned above, New Zealand mostly owns small hotels and not so many international chain hotels with world-class facilities provided. Thus, Skycity Group comes to provide the needs of the customer with its world-class facilities in both entertainment and accommodations. According to Skycity Group official website, their management strategy includes focusing on customer’s needs also exceeding their expectations with the facilities offered (Skycity Entertainment Group, n.d.). This indeed meets with what the tourists want when they come to come to New Zealand, different experience and high expectations.
Their management strategy not only about meeting the customers’ needs, but also to become a responsible corporate for the society and the environment nearby, this purpose is to meet the sustainability business of the company. In 2017, Skycity Group issued their Corporate Social Responsibility (CSR) Report, and in their report, they included the engagement of all the stakeholders in order to meet the needs of the community development. In addition, they also addressed their commitment in working toward reduction of environmental footprint every year (Skycity Entertainment Group, 2017). About community development, total money Skycity Group has spent in the charitable donations, sponsorship and commercial activities around $ 3,233,177. This funding also include the restoration of Skycity Hamilton, New Zealand International Convention Centre, and Adelaide Expansion Project which directly generate the employment locally.