doors in 2010. Very few market observers accurately forecast the initial revenues that would be generated by the Marina Bay Sands and Resorts World Sentosa in the first year.
T
One reason that Singapore’s casino market was underestimated has been the readiness of the local population to take to gaming. Within the domestic market there was little existing gaming activity from which to draw conclusions. Prior to the creation of Singapore’s two integrated resorts, the law did already permit a number of private member slot clubs. Typically, Singapore’s slot clubs are quite luxurious and incorporate good quality restaurants and live entertainment. The numbers of machines per club will vary according to the size of their membership but most will have ‘jackpot rooms’ that include between 20 and 30 machines, though some of the smaller clubs have as few as five machines.
There are approximately 75 of these clubs operating in Singapore with a total estate of around 1,700 machines. With the Marina Bay Sands offering 1,600 machines, and Resorts World Sentosa holding a similar number, meaningful conclusions about the nature of the performance of the new market could not really be drawn from the existing domestic machines market. And this is to say nothing of the more than 1,000 gaming tables (including VIP rooms) that the two integrated resorts added to the Singapore market as well.
The two resorts seem to have settled on different operational strategies. They are targeting different customers to generate their revenues and, on the face of it, there seems to be little overlap in their respective target markets. The Resorts World Sentosa is basing its strategy in the tourism and family market. The resort will eventually boast six hotels each with its own unique theme and a total of 1,800 rooms. The Equarius Hotel and Spa Villas will open after 2010. On the entertainment side, there is Universal Studios Singapore with its rollercoaster rides and movie-themed attractions, as well as numerous shows, 45 shops, and over 60 restaurants, cafes, clubs, and bars. This is all in addition to the casino. A result of this positioning is that the ratio of foreign visitors to the resort compared to local Singaporeans is 65:35.
he two new integrated resorts in Singapore have surpassed all predictions and expectations since they opened their
The Marina Bay Sands has geared itself towards business travellers and the resort includes 120,000 square meters of exhibition floor space. Marina Bay can host up to 45,000 delegates and boasts the largest ballroom in South East Asia. On the retail side, there is over 800,000 square feet of retail and restaurant space. There are around 2,600 hotel rooms at the resort. Marina Bay’s location in downtown Singapore also means that it is conveniently sited to attract local visitors.
The Resorts World Sentosa’s casino had the advantage of opening its doors first, on 14 February 2010 – the first day of the Year of the Tiger in the Chinese calendar. But the suggestion from local analysts is that Marina Bay Sands has been eroding that advantage over the course of 2010. In the fourth quarter of 2010 it was thought that the casino split between Marina Bay Sands and Resorts World Sentosa was 50:50.
Genting Singapore Plc reported that the Sentosa resort contributed revenues of S$731.8 million (US$ 561.8 million) in the third quarter of 2010 and EBITDA of S$ 346.5 million (US$ 266.0 million). This represents an EBITDA margin of 47%. Las Vegas Sands showed that its Singapore resort had revenues of US$ 485.9 million in the third quarter of 2010, and EBITDA of US$ 241.6 million at a margin of 49%. These early results from the two resorts have resulted in projections for the Singapore casino market being increased to US$ 6.5 billion in 2011, increasing from an estimated US$ 5.5 billion in 2010.
One of the aims of allowing the integrated resorts to be built was to help Singapore boost its tourist numbers. In 2009 there were 9.7 million tourism- related arrivals to Singapore down by 4% on the 10.1 million arrivals in 2008. Eventually it is hoped that the new resorts will increase this annual figure to around 15 million arrivals. Visitor arrivals to Singapore rose by 24% to 857,000 in February 2010 compared to the same month in 2009, as Sentosa opened its casino to coincide with the Chinese New Year holiday.
In the first six months of 2009 there were 4.51 million visitor arrivals to Singapore. For 2010, with the new resorts open, this number had grown by 23% to 5.53 million. July 2010 marked a new high when visitor arrivals for a single month passed the one million mark – 1.095 million visitors. In August
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