Malaysia visa easing too late for Genting in Golden Week
Malaysia’s recent visa waiver scheme for groups of mainland Chinese tourists came too late to boost the number that visited casino property Resorts World Genting (pictured) during China’s October Golden Week holiday, says a note from Maybank IB Research.
Providing commentary on the bank’s October 2 visit to the casino property – operated by Genting Malaysia Bhd – analyst Samuel Yin Shao Yang stated: “Despite the Golden Week holiday, we did not meet large mainland Chinese groups of more than 20 tourists during our visit. The largest we ran into was a party of 10. This seems to suggest that visa-free access has yet to make a meaningful impact on Resorts World Genting.”
He added: “Golden Weeks are the only week-long holidays other than Chinese New Year that allow most Chinese to travel overseas. Most Chinese would have planned their overseas trips way in advance. As the Malaysian Home Ministry made its announcement only on 26 August 2015, slightly more than one month before the October Golden Week, it was likely too late for large groups to make fresh travel plans.”
But the institution added that Malaysia’s new electronic ‘e-visa’ system – announced on September 14 and available to independent travellers from China and a number of other countries – could next year help to boost Chinese tourist numbers to Malaysia in general, and its only casino resort in particular.
The initial waiver scheme, announced in August, was for groups of 20 or more Chinese tourists. Prior to the follow-up e-visa initiative, independent Chinese travellers were being asked to spend as much as RMB600 (US$94.50) per person to use a four-step process to get a visa to Malaysia, said Maybank.
“We deem it entirely possible that come Golden Week 2016, there will be more mainland Chinese tourists to Malaysia,” stated Mr Yin.
The analyst said that it appeared from the October 2 visit that mass play at Resorts World Genting was “resilient”.
“We observed only the mass-market gaming floors. This market is more important to Resorts World Genting than the VIP market, accounting for 60 percent of its gross gaming revenue with 6x to 7x higher EBITDA [earnings before interest, taxation, depreciation and amortisation] margins at circa 50 percent,” said Mr Yin.
“Minimum bets were still high at MYR100 (US$23.70) during noon time on Friday. And there were not many empty seats. This suggests that the mass market is rather resilient, despite recent macroeconomic challenges and the weak Malaysian ringgit,” he added.
Maybank said that conversations with resort management indicated that a possible reason for visitor arrivals at the resort expanding by 9 percent in the second quarter was that any Malaysians that would normally go to Cambodia or the Philippines to gamble, had stayed at home because of the appreciation of the U.S. dollar, the Hong Kong dollar and the Philippine peso against the ringgit.
Mr Yin additionally said that it seemed that a major series of phased redevelopments at Resorts World Genting – known as the Genting Integrated Tourism Plan – was “on course for a gradual opening of its attractions from mid-2016”.
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