Management of Malaysian IR Resorts World Genting (RWG) have confirmed the property’s long-awaited outdoor theme park remains on track to open by 3Q20 or earlier, however rising costs are a cause of concern for the global casino operator.
An update on Genting Malaysia’s short-term prospects was provided in a series of analyst notes on Monday, with RHB Investment Bank Bhd revealing the theme park was tracking well to open on time despite recent delays associated with a legal dispute with its former partners, Twenty-First Century Fox Inc and Walt Disney Co.
“Management is confident that the OTP will open by 3Q20 (in line with our assumption) and stated that it is currently restarting the process that was stopped last year,” said RHB analysts Lee Meng Horng and Loo Tungwye following an investor day held at RWG, formerly known as Genting Highlands.
“However, judging from the stage of completion and aggressive staff hiring in the past few months, we do not discount the possibility of an earlier opening.”
According to Maybank Investment Bank Bhd’s Samuel Yin Shao Yang, any such scenario first requires Genting Malaysia to finish all construction work on the theme park by 1Q20 in order to fully test all rides and provide Fox Disney the chance to provide final certification.
It is expected that the theme park will have 25 rides when complete, some of which will utilize Fox intellectual properties as part of a recent settlement agreement reached between Genting Malaysia, Twenty-First Century Fox Inc and Walt Disney Co.
“For the remaining five rides, Genting Malaysia may employ intellectual properties from other studios but has not decided on which ones yet. This is why the outdoor theme park cannot reassume its previous name, 20th Century Fox World,” Yin said.
However, the cost of completing the theme park is also expected to rise, with Yin adding, “Genting Malaysia expects to incur more capex to complete the outdoor theme park in addition to the capex to date of approximately MYR3 billion [US$717 million] but has not quantified how much yet.”
Meanwhile, RWG will suffer from a lack of hotel room supply to cater to demand once the theme park opens, with almost double the current 16,000 rooms needed, according to Grand Ion Delemen Hotel Genting Highlands general manager Jack Lim.
“Currently, we are very far behind. We anticipate a huge influx of visitors to come once the outdoor theme park is completed,” Lim told the New Straits Times, suggesting the IR could do with closer to 30,000 rooms.
Analysts have suggested the completed theme park could attract up to an additional 2.5 million visitors per year.
