This article first appeared in The Edge Malaysia Weekly on June 17, 2024 - June 23, 2024

Tourism-related property developer Yong Tai Bhd (KL:YONGTAI) may have finally found a lifeline for its Encore Melaka project.

Last Monday, the group announced that it had inked a collaboration agreement with a state-owned enterprise from China’s Sichuan province to revitalise the operations of Encore Melaka.

A state-of-the-art theatre launched in July 2018, Encore Melaka was considered the crown jewel of Yong Tai’s signature project in the state, Impression City. The group holds a 30-year concession to stage the Impression Series, a show highlighting the city’s rich history and cultural heritage.

However, the project — envisioned to be the “future cultural icon” of Melaka — never got a fair chance to take flight as the Covid-19 pandemic struck not long after its debut, keeping tourists away and putting a strong damper on its prospects. The success of the project hinges greatly on tourist arrivals, particularly from China. Occupancy rates and ticket sales had been mediocre even prior to the pandemic.

Now, following its collaboration with Sichuan Tourism Investment Group (STIG), Yong Tai is preparing to resume shows at Encore Melaka next month. It plans to leverage STIG’s experience and expertise to manage and operate the theatre, setting a target of achieving a 70% occupancy rate within six months.

Yong Tai has been making annual losses since the financial year ended June 30, 2019 (FY2019). At its worst, in FY2022, it made a net loss of RM346.63 million, which then narrowed to RM21.67 million in FY2023. For the first nine months of FY2024, the loss narrowed further to RM6.09 million.

With the STIG partnership, one wonders if a turnaround may finally be in sight. Having Fan Bingbing, a popular actress from China, recently become the ambassador of the state’s Visit Melaka 2024 initiative is also an opportune boost for Yong Tai as it may draw strong Chinese crowds to Encore Melaka.

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