A GUST of cool mountain breeze: that was how one of Malaysia’s largest companies got started.
GENTING BHD founder Tan Sri Lim Goh Tong said the cool crisp air in Cameron Highlands where he was working on the hydro-electric dam project there in 1964 convinced him “to develop a retirement retreat where I could spend my old age.”
If that was indeed what Lim set out to do, then he has failed, for what emerged has arguably become one of Asia’s most incredible and hectic man-made resorts.
And judging by the throngs of people braving the crowds there at weekends and on public holidays like today, it could possibly be one of the most profitable too.
Love it or loathe it there is little doubt that the inaccessible mountain west of Kuala Lumpur called Gunung Ulu Kali that has become the Genting Highlands Resort is now one of the largest tourist revenue earners in the country, estimated at some 8% of total tourist receipts.
It is definitely the most visited resort and, through its gigantic thousand-room hotels, sells more rooms than any other in Malaysia.
For even as Genting “goes global” in searching for opportunities overseas, there are in turn, plenty of overseas tourists to Malaysia, such as those from China or Singapore, who will look out for Genting.
For them Genting means only one thing. The resort, an hour’s drive from the federal capital, is their main reason for visiting the country. And at the core of Genting Highlands is the casino, around which the entire tourist complex was built.
Although local tourists are significant, the resort earns sizeable incomes from Singapore, Thailand, Hong Kong, Taiwan and mainland China visitors.
The SARS outbreak earlier this year was therefore a significant blow but the outlook appears to be much brighter at year-end.
Although at the height of the outbreak earnings were hit with losses estimated at between RM5mil and RM7mil per day, the situation appears not only to have recovered but has surpassed previous levels, with revenues growing by some 16%.
An analyst said that while a turnaround “was entirely expected,” the strength of the rebound took the market by surprise.
“This strong performance was above expectations as visitor arrivals to the Genting Highlands resort recovered firmly, proving that operating conditions are certainly back to normal after SARS and war ravaged operations during the first six months of the year,” he said.
Hotel occupancy was now estimated at over 80% (compared to less than 50% in the first half this year) as local visitors and the return of foreign tourists filled the rooms, he added.
Looking ahead, analysts expect the strong sequential rebound in the gaming and hospitality operations, coupled with the holiday and festive peak season between October and March to boost both revenues and visitor numbers.
CIMB said the strengthening of domestic and regional economies such as Singapore’s was positive news that would likely trigger the return of tourists as well as encourage greater spending per head.
It said there should be a significant recovery of Singaporean arrivals – usually 25% of hotel guests – as well as tourists from North Asia, including China and Taiwan.
“Barring a resurgence of SARS in North Asia within the present winter months and material terrorist activities, we believe that the pent-up demand for domestic and regional tourism will ensure (Genting subsidiary) Resorts World's revenue and bottom line momentum sustaining over the next two quarters,” it said.
Further, CIMB said, the enhancement in entertainment offerings at the resort to maximise spending per head like daily/nightly variety events or shows, introduction of new casino facilities, new food and beverage outlets, and room refurbishments should boost revenues even more.
These initiatives bode well in the year-end festive and holiday seasons, providing a direct spillover to its gaming operations, it added.
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