Genting Singapore's cost concerns for Marine Life Park are over: analyst

It's 7,100 daily visitation is good sign.

Maybank Kim Eng studied three aquariums in the United States and observed that there are significant economies-of-scale.

Georgia Aquarium exhibits more than three times the number of animals at Monterey Bay Aquarium and Shedd Aquarium but incurs cash expenses similar to Monterey Bay Aquarium and only 33% more than Shedd Aquarium.

As MLP exhibits less animals than Georgia Aquarium, we do not believe that the former should be a lot more expensive to operate than the latter.

Here's more from Maybank Kim Eng:

We understand 4Q12 daily visitation of 7,100 and average ticket price of SGD23 continued into 1Q13, translating into annualised revenues of SGD59.6m.

GENS does not plan to raise ticket prices as a competing aquarium, Underwater World, prices its tickets slightly cheaper at SGD25.90 (MLP: SGD29) for adults and SGD17.60 (MLP: SGD20) for children.

Assuming MLP cash expenses stabilise at SGD80m or 16% more than Georgia Aquarium and average ticket price of SGD25, we estimate that MLP will require average daily visitation of 8,800 to break even.

We believe that MLP can attract the necessary number of visitors to break even as Universal Studios Singapore (USS), also on RWS, already recorded 2012 average daily visitation of 9,500 (2011: 9,300) and its 2012 average ticket price of SGD86.50 is almost four times more expensive than MLP 2012 average ticket price of SGD23.