Question of the Day - 05 February 2022

Editor's Note: We’ve received several queries along these lines, boiling down to whether a Genting Hong Kong bankruptcy will undermine the Resorts World empire, which includes outposts in Singapore, New York City, and on the Las Vegas Strip. This answer is provided by David McKee, who knows this stuff inside and out.]

The short answer is no.

In Genting’s palace are many mansions. Put differently, there are many Genting-branded silos on tycoon KT Lim’s farm.

The bankruptcy petition, filed in Bermuda, affects only (true, it’s a big “only”) Genting’s cruise-ship division. Genting Hong Kong expects to run out of cash at the end of this month and is trying to avoid liquidation of its assets. The filing stated that “certain business activities of the group, including but not limited to the operations of cruise lines by Dream Cruises Holding Limited, shall continue. ... However it is anticipated that [the] majority of the group’s existing operations will cease to operate.”

So, so long, Crystal Cruises. Ditto Star Cruises.

The cause of this woe isn't hard to fathom. The pandemic has caused sailings to be suspended for months at a time. The German government provided a bridge loan (Genting’s ships are built at shipyards in Mecklenburg-Western Pomerania), but it was a case of a bridge not far enough. Carrying $2.8 billion in debt, the Genting cruise lines simply couldn’t meet their financial obligations.

Not that any of this has stopped Genting from taking your money. It's still booking cruises, as far out as September.

“Certain business activities of Genting Hong Kong, including but not limited to the operations of cruises by Dream Cruises, will continue in order to preserve and protect the core assets and maintain the value of the Group,” the company stated. At present, all Hong Kong-based vessels are immobilized due to COVID restrictions, but that doesn’t prevent Genting from sailing from other ports.

This isn’t, of course, a Genting-only problem. Other cruise lines have sunk, including Spanish Pullmantur Cruises and Asia’s Jalesh Cruises. However, the crisis has cost KT Lim and Colin Au their jobs atop Genting Hong Kong. As far as we can ascertain, they continue to steer Genting Singapore and other investment vehicles of the Genting empire.

None of this impinges on Genting’s casinos, which are sheltered within other silos, such as Empire Resorts. Indeed, the gaming-industry press has basically ignored the bankruptcy story, so irrelevant is it to the casino businesses.

True, Genting has been having financial problems at Resorts World Catskills, but those are the product of overspending ($1 billion and counting) in a dubious market. Resorts World New York continues to be a money-spinner, as does Resorts World Sentosa in Singapore. 

It’s still too early to gauge the degree of success of Resorts World Las Vegas, but property President Scott Sibella and his team appear to have matters well in hand. Indeed, they can even gloat a bit, as their entertainment program is going strong. For one, Katy Perry’s residency is playing to rave reviews at the same time that, down Las Vegas Boulevard at Caesars Palace, “Weekends with Adele” suffered a messy meltdown. So don’t count Genting out by any measure.