Genting Malaysia’s new theme park, Genting SkyWorlds at Resorts World Genting (RWG), has been described as a “net positive” for the company with analysts expecting it to drive a significant increase in visitation and annual EBITDA once fully ramped.
Their comments come after RWG hosted an on-site preview of the new attraction as it prepares for its long-awaited launch – likely before the end of February, the analysts suggest.
While the US$800 million theme park is tipped to be loss making itself, Maybank IB’s Samuel Yin Shao Yang said in a Friday note that he expects Genting SkyWorlds to drive long-term visitation to between 26 and 27 million people per year – lower than RWG’s own prediction of 30 million but higher than the 24 million it enjoyed pre-COVID.
“Even though we expect GS to be loss-generating due to heavy depreciation, we are confident that it will draw the crowds (whether gaming or non-gaming) and be net positive for Genting Malaysia,” Yin wrote.
“Assuming MYR150 (US$36) average mass market gaming revenue/patron and 40% EBITDA margin, the 2 to 3 million extra RWG visitors per annum relative to the pre-COVID-19 high will accrete MYR120 million to MYR180 million (US$29 million to US$43 million) to EBITDA per annum.”
Nomura’s Tushar Mohata and Alpa Aggarwal describe Genting SkyWorlds as the “missing piece” for RWG.
“We believe that the park by itself might not be profitable due to start-up costs such as depreciation and interest on debt, but it is likely to be a highly effective ‘loss-leader’ to attract more family groups to the resort, which can boost other forms of revenue such as hotels, gaming and shopping,” they said.
“Once the borders are reopened, the resort, now complete with the theme park, will also be able to market to international visitors, who previously used to set aside one day in their Malaysia itinerary to visit Genting Highlands, but might have been skipping it during the construction period.”
Genting SkyWorlds sits on 26 acres at RWG and will offer 26 attractions across nine zones once fully operational. However, although it has capacity for 20,000 people per day, it will open at 50% capacity due to COVID-19 restrictions.
Yin said he expects the park to open between mid and late February based on channel checks, with Mohata and Aggarwal adding that launch was imminent and “as early as the next few weeks.”