Top Headlines

Genting Hong Kong, the owner and operator of Star Cruises and Crystal Cruises, is to offload its casino business based on Jeju Island, South Korea. Alan Lam reports.

Having reported a major lift of earnings in the first half of 2015, as a result of its gradual exit from share ownership in Norwegian Cruise Line Holding, Genting Hong Kong now plans to exit from its land based casino business on Jeju Island, ostensibly to focus further on its cruise business. This move follows the company’s recent announcement of a major expansion for its newly acquired Crystal Cruises brand.

The disposal could see the group putting even more resources into expanding its better performing cruise business.

Disposing of a casino business may seem counterintuitive to the operator of Star Cruises, which is inextricably intertwined with gaming. When looking closely at the status quo of the gaming industry in Asia, a different picture emerges. In the last decade, the industry experienced a massive expansion in various parts of the Asia Pacific region, driven mainly by the outbound Mainland Chinese travellers.

Because of China’s recent anti-corruption policy, which also cracks down on conspicuous consumption and vice activities of its citizens, casino businesses in Asia have suffered. Many major venues in Macau, for example, have seen their revenues fallen by as much as 50% so far this year.

Genting’s shifting of focus is therefore logical. Moreover, it is clear that there is a mounting demand for financial resources from the group’s cruise business expansion strategy. Disposing gaming assets will help ease the situation.