ollowing its annual stockholders’ meeting, AGI president Kingson Sian revealed new details on Resorts World Bayshore. The project will be the second integrated casino project of Travellers International Hotel Group, a 50-50 venture between AGI, the listed holding company of businessman Andrew Tan, and Malaysia’s Genting Group.
Sian said Phase One of Resorts World Bayshore will involve developing 16 hectares out of the 31-hectare portion allotted to the joint venture. He said Travellers needs to invest at least us$ 550 million before opening the project, which will initially feature a casino, at least two hotels with 800 rooms and a 3,000-seat “grand opera house.”
Resorts World Bayshore is the group’s follow-up project to the highly successful Resorts World Manila in Pasay City, which first opened in 2009. “The goal is to position the Philippines as the Broadway capital of Asia and the entertainment hub of the entire continent,” Sian said.
Apart from obtaining the last of four licensees to build in the Entertainment City, Travellers-along with other casino and hotel operators- now face external risks like the ongoing territorial dispute between the Philippines and China, considered a rich market for the gaming industry. Travellers noted cancellations from Chinese visitors but these have eased in recent months, Sian said.
Much attention has been given to AGI’s gaming unit given the expected explosive growth of the Philippine gaming sector. Even then, Travellers’ earnings results from Resorts World Manila have been sobering so far this year. The company’s net income declined 20 % to us$ 43.2 million in the first half even as revenues increased almost 28 percent to us$ 358.4 million.
Sian said the casino’s “hold rate,” or percentage of wins per game, has declined slightly this year. He also attributed the drop to higher depreciation cost as the company ramps up expansion. Even with slower earnings in the first semester, Sian said Travellers is expected to post year-on-year growth by the end of 2012, suggesting that earnings will pick up in the second half of the year.
He said AGI is on track to grow “core” net income by 20 percent to about us$ 239.3 million this year, to be led by its liquor, property development and gaming units.