Every company goes through it – a time when old assumptions have to be jettisoned in favour of new approaches. The shock for Casinos Austria International came in 2010 when after decades of profitability it suddenly found itself in the red and in trouble. In charge since 2011, Alexander Tucek has led a team that brought the company back from the brink. He talked to Hugh Sorrill.
THERE was a period a couple of years after the onset of the international financial crisis when it seemed nothing was going right for Casinos Austria International.
Where once it had been the biggest income generator for the whole Casinos Austria group, in 2010 it posted its first loss in three decades – and a huge one at that, at more than €35m.
Huge investments in new gaming and entertainment concepts such as Viage in Brussels and RP5 in Hanover did not pay off quickly enough and that combined with trading difficulties in other parts of the business was enough to see the departure of long-time CEO Paul Herzfeld in 2011.
Alexander Tucek then took over the day-to-day responsibility for running CAI and was confirmed as CEO in December last year. He said: “The last few years have been complicated. The changing markets, unsuccessful investments and tough competition seriously impacted our performance.
“When I assumed the position, we had to change urgently in order to stop the bleeding and so we started an extensive restructuring programme that is showing results already. We’ve also withdrawn from certain unprofitable markets, so the picture isn’t as bad as it was five years ago.”
With the rescue now effected, Tucek recently announced a new strategy for the company.
“We are taking CAI back to its roots,” he said. “When we became an internationally recognised company, we were working mostly on management agreements. And that basically is what we’re going back to. We’re going to stay in the small and mid-size market and try and find niches in between the biggest companies. Only when and if necessary will we participate in a property or project with a token investment and that could be as little as €1m stretching up to say around €10m.”
There is a fair amount of competition at that level, but CAI remains one of the largest and strongest in the field. “We have two USPs,” said Tucek. “The first is our name, the second is our long-term knowledge and experience in casinos. There aren’t many other operators with the track record of CAI and I think our reputation is still impeccable and also very well known within the right circles.”
The new strategy will of course inform the company’s decisions in the future but it has also had to deal with the large legacy projects in Europe and bring them into profitability.
Read the full article in the August issue of InterGaming
