Genting Berhad, the Malaysia-headquartered conglomerate, has announced a significant revenue spike within its leisure and hospitality division, signaling a strong revitalization of the tourism sector in the wake of global travel resuming. The third quarter of 2023 witnessed an impressive 27% increase from the same period last year, with revenues soaring to RM6.1bn ($1.3bn/€1.2bn/£1.0bn).
This positive trajectory manifested throughout all the regions Genting operates, with remarkable double-digit growth rates. Resorts World Sentosa (RWS) in Singapore, a critical asset in Genting’s portfolio, enjoyed an exceptional 42% revenue boom, totaling RM2.4bn. This surge is accredited to the enduring recovery in international travel, which has been eagerly embraced by tourism aficionados globally.
Equally, Resorts World Genting (RWG) in Malaysia wasn’t far behind, posting a 20% revenue increase, reaching RM1.7bn. Driving this growth is an uptick in business activity including gaming and diversified non-gaming segments. The dynamic performances extend across the ocean to the US & Bahamas zone, marking a 16% revenue rise to RM1.5bn, thanks to flourishing business in New York City, Las Vegas, and Bimini.
Resorts World Las Vegas, the diamond in the crown of Genting’s American ventures, tallied record-breaking revenue and EBITDA for 3Q23, attributable to an upsurge in its convention business, robust casino income, and a favorable US dollar trend. Hotel occupancy and average daily rates stood at impressive rates for the quarter, at 91.1% and $246 respectively, thus eclipsing last year’s figures.
RW Bimini equally experienced burgeoning operations, in part due to the eased travel constraints since June 2022, which resulted in a greater number of cruise calls, subsequently bolstering revenue.
The prosperity was not confined to the Asian and American regions alone. Revenue from Genting’s operations in the UK & Egypt zone climbed by 26% to RM495.0m, supported by an increased volume of business. The group’s overall revenue, when including its plantation, power, and property divisions, witnessed a 20% rise to RM7.4bn from the previous year.
It was not just revenue that saw a robust improvement; profits within the leisure and tourism division soared to RM2.4bn, an admirable 43% jump. Regionally, profit from Singapore increased by 47% to RM1.2bn, while Malaysia experienced a 25% increase to RM714.0m. The US & Bahamas and UK & Egypt zones also observed substantial profit growths of 76% to RM370.4m and 34% to RM99.1m respectively.
Despite the significant revenue growth, the operating costs also experienced an increase, with the overall cost of sales for all business segments rising from RM4.2bn to RM4.9bn. However, the strengthened Adjusted EBITDA, which rose by 33% to RM2.7bn for the quarter, illustrates effective cost management strategies.
Over the nine months leading to September 30, Genting’s leisure and hospitality sector marked a commendable 33% revenue growth to RM16.2bn. The Singapore operations stood out with a 60% year-on-year increase, with Malaysia and the US & Bahamas also reporting strong double-digit growths. Adjusted EBITDA for the year climbed 46% to RM5.9bn, with a significant contribution from its Singapore and Malaysia operations.
Despite the current success, Genting retains a degree of caution looking forward, primarily due to the uncertain economic climate globally. Challenges such as geopolitical tensions, continued tight monetary policies, and the uneven pace of global economic recovery are expected to present ongoing obstacles.
Nevertheless, Genting maintains a positive long-term outlook, supported by the projection of sustained growth in international tourism. However, overarching macroeconomic factors will significantly influence the travel and tourism sector’s complete bounce back. As part of its future forecast, Genting anticipates that the regional gaming market will continue to rebound as air travel capacity and connectivity within the region improve, hopefully renewing vigor in the sector and potentially enhancing Genting’s robust performance even further.
