Genting Hotel Jurong has opened for only a few weeks but the strong reception so far has taken some analysts by surprise, raising hopes of a spillover to both gaming and non-gaming activities at Resorts World Sentosa (RWS).
About 25 per cent of the 557 rooms have been on offer so far at the hotel, which has no gaming operations.
"Genting Hotel Jurong had its soft opening on April 30 and we are seeing a very healthy occupancy trend. We are ramping up our room inventory and expect to be fully open in the next month," a company spokesman said.
In the long term, the hotel's location may prove fortuitous as it is a five- to 10-minute walk from the Jurong East MRT station and near the site of the terminus for the upcoming high-speed Singapore-to-Kuala Lumpur rail link - and will draw visitors from Malaysia and the region to the property and to RWS.
But the benefits will be seen much later as the rail link is expected to open after 2022.
Even so, given its affordable average room rate - at $190, which is far below RWS' $381 - and a 24-hour shuttle service to RWS, CIMB sees the 557-room hotel gaining traction with families and lower-end mass gaming customers from Malaysia and Indonesia, amid fewer visits from mainland Chinese high-rollers.
Analysts see Singapore's gross gaming revenues staying flat at about US$6 billion (S$8 billion) this year, with mass-gaming growth offsetting part of the drop in VIP revenues.
Maintaining a hold call on Genting Singapore, CIMB said it expects the group's earnings for the second half of the year to be lifted by contributions from the Jurong hotel.
"We were pleasantly surprised by the crowd at Genting Hotel Jurong," CIMB analysts Jessalynn Chen and Kenneth Ng said. "We visited the hotel on a weekday afternoon, just two weeks after its soft opening... and were pleasantly surprised to find that the 144 available rooms were fully committed." They said the hotel should boost traffic to the RWS casino by between 3 per cent and 9 per cent, but the impact on mass gross gaming revenue growth is expected to be smaller owing to lower average bet sizes of the Jurong hotel's guests.
Hotel room revenues could rise by between $26 million and $41 million annually and the hotel's guests could lead to a 2 per cent to 5 per cent increase in average daily visits to RWS' attractions, CIMB said.