The increasingly strong performance of Genting Group’s US casinos bodes well for the reopening of borders in the company’s traditional strongholds of Malaysia and Singapore, with pent-up demand continuing throughout the September quarter, according to Nomura research analysts.
Genting owns and operates three US casinos, including New York’s Resorts World New York City (RWNYC) and Resorts World Catskills (RWC), plus the US$4.3 billion Resorts World Las Vegas (RWLV), opened in June.
Nomura’s Tushar Mohata and Alpa Aggarwal said GGR at RWNYC reached US$230 million in the three months to 30 September 2021 – flat versus the June quarter but 4% higher than the same period in 2019. This, they state, suggests “stable demand in spite of September being the peak of the current COVID-19 wave in New York state.”
At RWC – which is 49% owned by Genting Berhad subsidiary Genting Malaysia – GGR of US$64.5 million was 28% higher sequentially and 5% higher than pre-COVID in 2019, bolstered by strong pent-up demand.
Likewise, pent-up demand has been evident in Las Vegas. While Genting does not make resort-level GGR data available on a regular basis for RWLV, state-wide GGR of US$3.68 billion across Nevada for the September quarter was 6% higher than the prior quarter, 59% higher year-on-year and 21% higher than in 2019.
Las Vegas Strip GGR of US$2.06 billion was 18% higher versus the June quarter, 106% year-on-year and 25% versus the September quarter in 2019.
Mohata and Aggarwal believe the fact that Genting’s US casinos have managed to sustain their revenue momentum in spite of a recent spike in COVID cases is “all the more encouraging as inbound tourism to the US, especially from Asia, has only recently started to pick up.
“We believe the US operations will likely remain resilient contributor to Genting Malaysia and Genting’s earnings, given the higher vaccination coverage in the US and a lower appetite for strict lockdowns.”
It is also encouraging for Genting’s Asian operations, namely Resorts World Genting in Malaysia and Resorts World Sentosa in Singapore.
“We think the next catalyst for the group will be the start of inbound international tourism in their home markets,” the analysts write.
Nomura has maintained a “Buy” rating for Genting Malaysia and a “Neutral” rating for Genting Berhad.
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