Singapore's integrated resorts: Genting stays cool as it expands over decades

More will be done to Marina Bay Sands and Resorts World Singapore as it was announced last week that the two integrated resorts will pump in $9 billion to build world-class attractions.
More will be done to Marina Bay Sands and Resorts World Singapore as it was announced last week that the two integrated resorts will pump in $9 billion to build world-class attractions.PHOTO: SCREENGRAB FROM RESORTS WORLD GENTING/FACEBOOK

Eight years ago, Marina Bay Sands and Resorts World Singapore transformed Singapore's skyline when they opened. More will be done - last week, it was announced that the two integrated resorts will pump in $9 billion to build world-class attractions.

Tourist attractions in the region come and go, but in Malaysia, the Genting casino-resort has somehow managed to keep its pole position for years as a cool place to visit.

The mountain-top Resorts World Genting (RWG) was visited by more than 20 million people last year, putting it again as the most-visited tourist spot in Malaysia.

While other integrated resorts can boast about being by the sea or in the middle of bustling cities, Genting has natural cool weather to offer all year round as it is perched among the clouds at 1,800m above sea level.

To make tourists feel they are indeed visiting a cool place, RWG has kept on expanding its theme park offerings and shopping experience, piled on more restaurants and boasts a 150-shop Premium Outlets selling top branded goods at discounted prices.

"There is a nice shopping area, indoor and outdoor theme park and the weather is really cooling. My short stay here was pleasant even though the prices here are more expensive," wrote one Danny Too on a hotel booking site on his February trip.

RWG has 10,500 hotel rooms catering to both high-rollers and families on a tight budget, a far cry from 1969 when group founder Lim Goh Tong laid the foundation for the first hotel on the mountain. Tan Sri Lim died in December 2007.

The Genting group is today run by Mr Lim's son Lim Kok Thay, 67.

 
 
 
 

The Malaysian operations has, over the years, diversified into many other businesses. It moved into plantations in 1980, cruise operations in 1993, power generation and oil and gas exploration activities in 1996, and biotechnology research activities in 2006, according to the website of Genting Bhd, the group's main vehicle. Analysts say gaming contributes some 80 per cent to group earnings.

The group attracted headlines last week with the planned acquisition of super yacht Equanimity, allegedly built using money stolen from 1MDB, for US$126 million (S$170 million). Genting said the 91.5m-long luxury boat will provide the company with "a unique and competitive edge for its premium customers business".

Said Hong Leong Investment Bank Research analyst Rachael Hong Hui Chee in a report on Thursday: "We are mildly positive on the purchase as it will be able to complement its VIP casino segment (ferrying high-rollers to its casino and renting for private functions)."

PLACING CHIPS ABROAD

Other analysts were not so positive. Public Investment Bank wrote in a research report that "while we agree this could help to boost the VIP business, the impact may not be material considering that the super yacht can only fit 50-plus passengers, which includes 31 crew members". The group will also incur costs from higher depreciation charges, maintenance and upkeep.

At home, RWG has a unique advantage because with conservative Islam on the rise in the majority Muslim country, the Malaysian government is not expected to issue another casino licence.

The group, meanwhile, has been busy placing its chips abroad to expand its footprint.

In 2006, it was awarded the Sentosa integrated resort project by Singapore. Resorts World on Sentosa broke ground in 2007 and was officially opened in 2010.

This was followed by Resorts World Casino New York City in 2011, Resorts World Bimini in the Bahamas in 2013 and Resorts World Birmingham in the United Kingdom in 2015.

Resorts World Las Vegas, a 3,400-room casino resort will be the first new integrated resort to open on the Las Vegas strip in more than 10 years. It is expected to open by the end of next year, said a Reuters report.

In Singapore last week, Genting said it would invest $4.5 billion in Sentosa in a five-year expansion plan starting next year. The project will include extension of Universal Studios Singapore to feature two new attractions - Minion Park and Super Nintendo World. There will also be a new waterfront lifestyle complex and two new hotels with up to 1,100 rooms.

Shares of Genting Bhd in Malaysia fell sharply last week on news of the super yacht purchase, the big Sentosa spending by its 52.7 per cent Genting Singapore unit, and the Singapore Government hiking casino entry levies for Singaporeans and permanent residents, and charging higher taxes on gaming revenues. Shares of Genting Singapore plunged by more than 9 per cent on Thursday.

Maybank Kim Eng has downgraded Genting Singapore, saying that while the Sentosa expansion is "visionary", there would be "short-term pain before long-term gain". And the higher casino entry levy and tax rate could affect short-term earnings before its potential is realised in 2024-2025, it said.

The share price fluctuation is but another hiccup in Genting's journey, 50 years after the 1969 rise of its first hotel on Malaysia's cool highlands. The group today has operations in nine countries, employing some 55,000 people.

Parent company Genting Bhd posted a net profit of RM1.37 billion (S$454 million) for the year ended December 2018, notching a revenue of RM20.9 billion.

A version of this article appeared in the print edition of The Sunday Times on April 07, 2019, with the headline 'Genting stays cool as it expands over decades'. Print Edition | Subscribe