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Malaysian gambling
SARS-struck
By Arun Bhattacharjee
GENTING HIGHLANDS, Malaysia - A 45-minute ride
on the highway from Kuala Lumpur leads to a drab
structure housing a couple of restaurants and four
levels of parking. A few floors up is the cable-car
station of one of the longest cable ropeways in Asia -
which until recently used to carry thousands of
passengers over lush rainforests to Malaysia's holiday
dreamland, Genting Highlands.
As the cable cars
terminate at the basement of a posh five-star hotel, the
shopping centers, water-sports complex and classy French
restaurants promise visitors all the happiness that
money can buy. It is no wonder that Genting is one of
the more popular honeymoon destinations in Asia. At
least, it used to be.
The Genting complex that
was once a beehive of activity is almost silent today.
The core of Genting Highlands is the casino around which
the entire tourist and gaming complex were built. The
complex is said to account for 8 percent of Malaysia's
income from tourism. The casino and the hotel business
at Genting Highlands have been hit by the decline in the
number of tourists visiting Malaysia as well as the
economic downturn in Singapore. The sharp decline in
business this year has been caused by the outbreak of
severe acute respiratory syndrome (SARS). Teet Hok Lai,
one of the local regulars at the casino, said, "Even the
two giant spirits who are the guardians of the casino
could not help this time." Chinese players at the casino
believe that two giant spirits ensure that the house
always wins and protect it.
As SARS continues to
hold Malaysia in its grip, foreign tourists and players
are staying away. The government's decision to enforce a
restricted visa regime to prevent people from Hong Kong,
China, Taiwan, Vietnam and Canada from entering Malaysia
is not helping. The casino is unable to raise enough
money for the maintenance of its huge infrastructure
because locals are also avoiding the place, fearing
infection from crowds.
Many locals are also
worried that many employees may lose their jobs. The
center of the complex, the huge carpeted gambling area
where children and visitors in informal dress are
barred, illustrates the extent of the drop in business.
With electricity under strict control and miles of
escalators not running as before, it looks as though the
complex is catching up on lost sleep after years of
non-stop operation. Three floors above, the numerous
dark rooms betray the hotel's dismal occupancy level.
Apart from well-heeled Thais and rich Arabs,
Genting's major clients have been predominantly from
Singapore, Hong Kong, Taiwan and mainland China.
Malaysia's travel restrictions have reduced the number
of Genting's overseas visitors to nearly zero. The
complex is losing up to US$1.5 million or $2 million
each day. The casino cruise ship has also been affected.
The total loss to the hotel and gaming complex is
estimated at $30 million to $40 million so far.
In addition, SARS has indirectly hurt share
prices of Genting Berhard and Resorts World Berhard, who
manage the facilities. It is going to decline further,
according to informed sources. The near-ban on travel
from Singapore cut down the direct Singapore-Genting bus
sorties from 20 to one per day. Players from China and
Hong Kong accounted for 11 percent of visitors and those
from Singapore another 14 percent. The big players,
generally from Singapore, Australia or other Western
countries, who used to spend time at Genting are absent
as well, because of travel advisories by their embassies
and also as a result of the Iraq war. SARS is the straw
that has broken the proverbial camel's back.
Malaysia initially downplayed SARS, fearing its
potential impact on its economy, although the government
has denied that there was any instruction to play down
the seriousness of the outbreak. In a country where even
reporting the haze over Kuala Lumpur from a forest fire
in Kalimantan is censored, the failure to report openly
about SARS is no surprise. As the number of suspected
cases increased and the silence became embarrassing, the
media started printing SARS bulletins, although the
death figure remained at one. Monday's official count,
according to national news agency Bermana, was 178
confirmed SARS cases.
The magnitude of the
impact in simple numbers is staggering: 700 flights
canceled by Malaysian Airlines; a 30 percent drop in
revenue; a 10 percent drop in traffic at Kuala Lumpur
International Airport.
No wonder Genting Berhard
and Resorts World Berhard are discussing readjusting
their share holdings to hold prices. Resorts World
Berhard, which operates the casino and the hotels and
owns 34 percent of Star Cruise, is "facing a temporary
problem", according to one source, as it is also hurting
because of Star Cruise, where the number of passengers
has dropped dramatically and the price has had to be cut
by 40 percent from the standard fare.
The
Tourism Ministry expects the loss from tourism due to
SARS to level off at $1.4 million. Economic impact in
other areas such as manufacturing, trading and exports
has yet to be assessed by other government departments.
In kampongs (villages) on the way to
Genting many Malays are not too worried that the
"un-Islamic blot" where people gamble and drink and
women don't cover themselves properly is in trouble. The
casino does not help their economies either by providing
jobs or purchasing goods. Educated urban Malays see a
different picture, as Genting Highlands' losses mean the
values of their shares going down.
(©2003 Asia
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