Singapore’s two integrated resorts, Marina Bay Sands (MBS) and Resorts World Sentosa, continued benefiting from brisk traffic among locals in the fourth quarter.
That trend, which emerged in earnest during the July through September period, is pivotal to the profitability of those gaming venues. It comes at a time when the city-state’s tourism industry is still hindered by regional travel restrictions stemming from the coronavirus pandemic.
In the final three months of 2020, MBS generated an operating profit of $144 million, up 106 percent from the prior quarter. Las Vegas Sands (NYSE:LVS), owner of the venue, delivered that figure last week when it reported fourth-quarter results. Rival Genting Singapore hasn’t updated investors yet, but analysts expect that operator will report similarly encouraging data.
We gather that Genting Singapore’s Resorts World Sentosa will exhibit similar trends when it releases its 4Q20 results on 9 Feb 2021,” Maybank Kim Eng analyst Samuel Yin Shao Yang wrote in a recent note to clients.
Resilience by the two Singapore gaming venues is a sign that a government-run local tourism initiative crafted last year is paying dividends. Last July, the Singapore Tourism Board (STB), EnterpriseSingapore, and Sentosa Development Corp. created SingapoRediscovers, setting aside almost $34 million to bolster tourism among residents.
All adults over the age of 18 received $75 vouchers. Those credits cannot be used for gaming activities, but are usable for other amenities at MBS and Resorts World Sentosa.
Singapore Situations Evolving for the Better
MBS and Resorts World Sentosa reopened on July 1, 2020 after a more than three-month shutdown. Initially, the gaming areas of those venues could operate at just 25 percent and entry was restricted to annual levy holders or members of the Sands and Resorts World loyalty clubs.
Data confirms the situation in the city-state is improving. For example, Sands Chairman and CEO Rob Goldstein said on last week’s earnings conference call with analysts that the operator was earnings before interest, taxes, depreciation and amortization (EBITDA) positive in Singapore in the fourth quarter. LVS remains committed to enhancements and expansion in its second-largest market after Macau.
“In Singapore, we remained very committed to long-term investment in Marina Bay Sands, including both the upgrading of our existing facilities and the expansion of that property,” said Goldstein on the call.
LVS President and COO Patrick Dumont called the city-state “a very special market,” while noting the future there “is very strong, both as a leisure and business tourism market.”
Details Matter
Maybank’s Yin notes there’s chatter that MBS may have opened to all visitors, not just locals, on Oct. 9, aiding the property’s fourth-quarter rebound. He adds that Genting Singapore may announce a dividend as it defers capital spending due to the pandemic.
Singapore currently has travel bubbles with six countries, including China, and a one-way plan with Taiwan. However, the outlook for MBS and Resorts World Sentosa would brighten if Hong Kong and Malaysia come into the fold. The latter is one of the largest feeder markets for the two integrated resorts.
While the trajectory of the Singapore pair of casinos is encouraging, analysts say more international visitors are essential. That’s because locals prefer slot machines, while gamblers from outside the city-state often gravitate to higher limit table games.
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