Genting’s upcoming casino resort featuring a Universal Studios theme park will be Singapore’s biggest tourism money spinner and is expected to break even in seven years, the Malaysian gaming giant has said.
The „Resorts World at Sentosa“ is projected to generate tourism receipts of 15 billion Singapore dollars (9.5 billion USD) annually by 2015, half of the overall industry target set by the Singapore Tourism Board, Genting International chief financial officer Tan Hee Teck said Monday.
„Resorts World at Sentosa will be the single largest contributor to tourism receipts in the country,“ he said at a press conference three days after Singapore announced that a consortium led by Genting International won the city-state’s second gaming licence.
The Genting resort will be located on Sentosa island, a popular beach and golf resort linked to mainland Singapore by a causeway and monorail.
Another casino is to be built by US-based Las Vegas Sands near Singapore’s banking district aimed at the international convention market.
Projections by Genting showed the Sentosa project, which will feature Asia’s first Universal theme park outside Japan, will attract 15 million vistors in its first year of operations in 2010 and bring in spending of 10 billion dollars.
The 5.2-billion dollar project is expected to generate a value-added amount of 3.9 billion dollars to the Singapore economy during the three-year building phase starting 2007 and create 22,000 jobs during this period, Genting said.
When completed, the resort will employ 10,000 people.
Singapore lifted its 40-year ban on casinos as part of plans to spruce up its staid image and draw more tourists.
Genting, one of the largest gaming operators in Asia, does not forsee the Singapore resort affecting its flagship casino and leisure resort in Malaysia’s Genting Highlands near the capital Kuala Lumpur.
„We see minimum impact,“ Lim Kok Thay, chairman and chief executive of the Genting Group, said at the press conference.
„If any, it will be a positive impact because we feel that as more and more opportunities open up in the gaming and leisure sector, the pie will grow.“
Resorts World at Sentosa is targetted at holidaymakers from the Asian region, especially from India and China, as well as visitors from the United States and Europe, while the Genting Highlands resort draws tourists from its home market and neighbouring countries, Lim said.
„So in that sense, there is enough to go around,“ Lim said.
Genting hopes to recoup its investment „over a seven-year payback period“ from the Sentosa resort. Two-thirds of the funding will come from project financing and the rest via equity, said Tan.
The Malaysian group had also said previously it will reinvest more than 200 million dollars annually to keep the Sentosa resort up to date.
Apart from the Universal theme park, the resort will feature what is billed as the world’s largest oceanarium complete with a water park, maritime museum and six hotels offering more than 1,800 rooms.
The resort will also house a DreamWorks movie studio, allowing visitors a peek at how film animators use computer technology to create movies. DreamWorks has produced several animated blockbuster movies, including Madagascar and Shrek 2.
Analysts said the Sentosa win is a boost for the long-term growth of Genting, which recently acquired Britain’s largest casino operator Stanley Leisure and also owns Star Cruises, the world’s third largest cruise operator.
„This project gives the company a major new engine for growth, an expanded portfolio of assets and enhanced credibility globally which should facilitate further success in future bids,“ said Sean Monaghan, an analyst with Merrill Lynch.
At the close of trading Monday, Genting International soared 24 percent to 51.5 cents after reaching an intraday high of 55 cents and was the most heavily traded stock on volume of 286.7 million.