Inside Asian Gaming

inside asian gaming September 2015 28 according to Genting’s corporate history, to help develop this then remote area, even though it was just 58 kilometers from capital city Kuala Lumpur. RW Genting has kept its national casino monopoly and grown to six hotels with 9,000 rooms, theme parks, retail, convention facilities and an arena, with 3.6 million loyalty card holders and 18.1 million visitors last year. Genting Malaysia President and COO Lee Choong Yan works with Chairman and CEO Lim Kok Tay, the founder’s son and Genting Group’s undisputed leader, to keep the family heirloom polished. While tending to the home base, Genting Malaysia also holds the group’s most far-flung assets in the UK, New York and Florida, at the center of initiatives to kick start growth for the group ahead of the opening of major integrated resort projects in Las Vegas, South Korea and the Philippines. Revenue last year at RW Genting plus the company’s two marginally impactful non-gaming beach resorts in Malaysia was 5.4 billion Malaysian ringgit (MYR; $1.5 billion at year-end exchange rates), down 6% from 2013. The company says VIP volume grew but it suffered from a low hold percentage. Adjusted EBITDA fell 6% to MYR1.9 billion with margins steady at 35%. The company says RW Genting remains one of the best performing IRs in the world in terms of EBITDA margins, running second to Las Vegas Sands’ Marina Bay Sands and ahead of Resorts World Sentosa. The five-year compound annual growth rate for revenue in Malaysia is just 2% and EBITDA in ringgit terms was lower in 2014 than it was in 2009, having fallen in four of those five years as margins deteriorated from 41%. For the first half of this year, Malaysian revenue rose 2% to MYR2.7 billion on improved VIP volume but, again, low hold. Adjusted EBITDA fell 5% on higher VIP costs and the advent of a national 6% goods and services tax. Hopes to increase growth and revitalize the resort currently rest with the 10-year, MYR5 billion Genting Integrated Tourism Plan launched at the end of 2013. The plan includes additional hotels and retail, a Twentieth Century Fox Studios theme park, a new cable car system and expanding the arena to 10,000 seats. Visits and room nights sold fell last year due to work associated with the plan. RW Genting has tried to stimulate visits with 50th anniversary promotions, some looking ahead to the new facilities, enlisting Malaysian actress Michele Yeoh as a brand ambassador, and expanding express bus services to 99 locations around Malaysia. The first fruits of the plan blossomed this year as three-star First World Hotel opened its new, 1,300-room Tower 2A to reclaim the title of world’s largest hotel (verified by the Guinness World Records) with 7,351 rooms. The next additions, including the theme park, are due in the second half of 2016. Resorts World Bimini opened the first phase of its 300-room hotel and has added to its cruise programs to visit its land- based casino and mini IR on the Bahamas island closest to Florida. The complete complex will include meeting space, retail, an upgraded beach club and craft village. The new port facility, opened a year ago, allows direct disembarkation to the island. Fifty miles west on US soil, the company is refurbishing its 527-room Hilton Miami Downtown, part of the 30 acres Genting hopes will someday become Resorts World Miami, if legislation passes to allow it to include a casino. In New York, the company lost its bid for one of the state’s new gaming licenses. (Chairman Lim’s family controlled Kien Huat Realty was among the three winners.) Nevertheless, Resorts World New York City keeps humming along. The 5,000-machine gaming complex welcomed 8.6 million visitors last year, and business volumes continue to grow. Combined North America revenue rose 6% last year, though EBITDA dropped 87% due to construction costs in Bimini and the failed New York application. This year, first half revenue rose 23%, and EBITDA has nearly doubled. Resorts World Birmingham is scheduled to open in the fourth quarter. It will be Genting’s 42nd UK casino and the kingdom’s first IR, boasting a 178-room hotel, 11-screen cinema, spa, and VIP facilities, including five-star accommodations. The location, next to Birmingham’s airport, will provide easy access to international high rollers, including players from Asia that make up a good chunk of Genting’s UK VIP business. City of Dreams was arguably the pioneer in targeting the high- limit cash players known in Macau as the “premium mass,” a segment offering significantly higher margins for operators than VIP and one that now seems to hold the promise for the city’s continued prosperity as the junket-driven high-roller business Ted Chan Chief Operating Officer Melco Crown Entertainment