Saturday, June 25, 2022

Genting’s New York IR debuts, eyes Asian tourists

The $1.2 billion Resorts World Catskills opened its doors on February 8, expanding the Genting brand in the U.S., even though the Malaysian company missed out on a license for its own property in New York State.

The property, which is the biggest of four new resorts in the upstate area, will be the first IR in the U.S. to carry the Genting name. The company has been pushing hard to penetrate the North American market, though with mixed results.

In 2015, Nasdaq-listed Empire Resorts was awarded the license to operate the Montreign Resort Casino, one of four given out by regulators in a bid to boost tourism and employment in the economically depressed upstate region. The company’s majority shareholder is Kien Huat Realty, which is owned by Genting Chairman Lim Kok Thay.

The Genting Group, which operates a “racino” in Queens, New York, had put in its own proposal for a $1.5 billion property in Sterling Forest, Orange County. However, it faced stiff opposition from local residents and was ultimately unsuccessful. In May last year,  Empire entered into a license agreement with Genting, to rebrand the Catskills property under the Resorts World name.

“The ability to tap into Resorts World New York database is a big deal,” said Alex Bumazhny, senior director of Fitch Ratings. “Being able to cross-promote will benefit both properties. Queens customers will be drawn to Catskills to redeem their loyalty points in a more amenity rich environment and will be more incentivized to consolidate their play in Queens to accumulate points.”

“In a competitive environment building a database from scratch is a very difficult and expensive proposition and having a relationship with the Queens property gives Resorts World Catskills a head start.”

The integrated resort will be by far the biggest of the new casino complexes in New York state, with 130 table games, 2,150 state-of-the-art slot machines, a poker room and private gaming salons. Guest amenities will include 332 all-suite luxury rooms, which include 12 penthouse suites, 8 garden suites and 7 two-story villas, two indoor pools, a spa and fitness center.

There is a 2,000-seat event center and late this year, an entertainment village will open to provide additional non-gaming amenities. In spring 2019, a Rees Jones-redesigned 18-hole golf course is scheduled to open.

However, to make the project pay, the company is relying on the pull of the Genting brand to bring in new tourists, in particular Asia’s high rollers.

“This recognized worldwide gaming and hospitality brand will provide us greater power to market our resort casino, which is designed to meet 5-star and 5-diamond standards, and provide regional, national and international exposure for the Catskills region,” Empire Executive Chairman Emanuel Pearlman said last year when announcing the rebrand. “By branding the company’s resort casino, the only integrated resort casino in New York State, a Resorts World property, the company aims to reach a market of existing Resorts World customers worldwide.”

The resort is located about 90 miles away from New York City and has created more than 1,300 local jobs. According to the state’s Lieutenant Governor Kathy Hochul it is expected to bring in 4 million visitors to the Catskills each year, “providing millions in revenue.”

Other local officials were equally as optimistic about the prospects for the property and the impact on the regional economy.

“Today marks a major milestone, not only for Resorts World Catskills, but for all of Sullivan County,” Luis Alvarez, Chairman of the Sullivan County Legislature said in a release marking the Feb. 8 opening. “We are confident that this casino resort will serve as a beacon of hope, opportunity and excitement for the region by generating new jobs, driving tourism, and contributing millions of dollars to our state and local economies.”

However, some industry experts have warned that the New York market is overcrowded and the other new properties have been underperforming their revenue targets. New York City is a major draw for Asian tourists, but there are few other attractions around the Catskills once they have made the trip out into the country.

“In the US the success of an integrated resort depends on the amenities that surround the casino,” says Warwick Bartlett, CEO of Global Betting and Gaming Consultancy. “You cannot expect people to drive 80 or so miles to a resort and find the restaurants are not as good as the place where they just left!”

“Genting in the Catskills has a lot of amenities apart from gambling, but the opening and trade this winter for the other casinos has probably been poor due to the weather.  They have had a lot of snow and sub zero temperatures, not very enticing to leave NYC at this time of year!  However most Americans will be the recipient of the Trump tax rebate this month so I expect revenue to ramp up.”

In January this year, Moody’s downgraded the Lago Resort Casino’s debt rating due to a slow ramp up. The credit rating agency had expected the resort to generate about $250 million in revenue in the first year, but says it is only on track to hit about $150 million.

Lago owns and operates del Lago Resort Casino, a $440 million resort and casino development located in Tyre, NY, between the cities of Rochester and Syracuse.

Elsewhere in the U.S., Genting’s expansion plans are enjoying mixed fortunes. Construction has now begun on the long-delayed $4 billion Resorts World Las Vegas, which is scheduled to open in 2020, four years later than originally planned. The company decided to overhaul the design to incorporate a more modern Chinese feel creating delays.

In Massachusetts, plans to operate a property on behalf of the Mashpee Wampanoag tribe have been held up due to court action over the land rights. Apart from the “racino” in New York, which has recently been expanded, the company has been pushing to build an IR in South Florida.


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