Genting Malaysia’s long-awaited and much-anticipated SkyWorlds outdoor theme park will hold its soft opening on Tuesday, with analysts confident the attraction will prove to be a key driver of visitation to Resorts World Genting.
The company first announced plans for the theme park in 2013 as part of a major overhaul of the Genting Highlands property.
The RM10.38 billion ($2.46 billion) Genting Integrated Tourism Plan (GITP), as it is known, involved the addition of new hotel rooms, expansion of the casino floor, as well as more retail and food & beverage. The initial investment was slated to be MYR5 billion, though the company announced it had doubled its spending plans in 2016.
The $800 million SkyWorlds park is the crown jewel in the revitalization plan. Spread over 26 acres, the park has nine themed zones. It is ultimately expected to feature 26 attractions, though not all were open during a preview for analysts late last month. The remainder of the rides will be rolled out in stages.
“We think that the park is well-conceptualised, has a good mix of attractions for all ages, and is likely to be a crowd puller to the highlands resort,” Nomura analysts wrote in a note after the visit.
Maybank agreed, saying that it rated the park very highly, with a special nod to the Independence Day: Defiance feature, in which recruits defend the earth from an alien invasion.
The park has a daily capacity of 20,000, though will be restricted to 50 percent of that level initially due to ongoing Covid restrictions in Malaysia.
Genting has estimated that the park will help boost visitation to the resort to 30 million in the longer term, compared with the pre-Covid high of 24 million in 2019. Maybank has said it’s more conservative and expects the park to help attract 26-27 million visitors.
The park itself is forecast to be loss making due to the high depreciation costs involved, which will run at about MYR330 million per annum, assuming a 10 percent rate.
However, the increased visitation will drive further spending in other areas of the property, including gaming.
According to Maybank’s analysis, the extra two to three million visitors a year relative to the pre-Covid high may add between MYR120 million and MYR180 million in annual EBITDA. Its forecast is based on average mass market gambling revenue per patron of MYR150.
Tickets to the resort went on sale on Friday, beginning at MYR128 for children and seniors and up to MYR151 for a standard ticket, which gives unlimited access to the available rides. Prices will rise by 20 percent from March when more rides have opened up.
The long-delayed attraction was originally to have been a venture with 20th Century Fox and would have been the U.S. giant’s first theme park. Genting would own and operate the park and Fox would obtain a cut of retail, food and beverages, but not the gate.
However Fox pulled out in 2018 after being bought by Disney, which was concerned over having its family friendly brand linked with a casino operator.
The withdrawal sparked a $1 billion lawsuit from Genting, which claimed breach of contract, followed by a countersuit from the U.S. parties, with the case finally settled in 2019.
Analysts are bullish on the prospects for Genting Malaysia, with the final piece of the GITP plan finally in place. The operator is one of the fortunate few in Asia, with a monopoly in its home market and domestic visitors making up 90 percent of its customer base.
“Until Genting Highlands, there were no other major theme parks in the Klang Valley, despite the fact it’s the wealthiest and most populous region in Malaysia,” Maybank Associate Director Samuel Yin Shao Yang said in an interview with Asia Gaming Brief. “I’ve never expected the theme park to be profit making, largely due to heavy depreciation, but we are quite confident it will bring in many more visitors.”
Yin says by rule of thumb, one out of every two visitors to the resort will visit the casino.
Although not reliant on overseas markets, the park is expected to pull in international travellers, with most of the signs in the resort in simplified Chinese in anticipation of more regional visitors.
This will be the next catalyst for growth, says Nomura.
“We are closely monitoring the Omicron strain of COVID-19, but we note that its lower severity so far has not affected the pace of reopening,” it said.
Tune in this Friday to hear Asia Gaming Brief’s full interview with Maybank’s Samuel Yin Shao Yang, who will provide more insight into the prospects for Genting Malaysia and its sister company Genting Singapore.
