Tag Archives: Intergrated Resort

Profitability of IRs in doubt: Citi analyst

Posted on 13 Sep 2009 | Comments Off on Profitability of IRs in doubt: Citi analyst

To achieve US$1.56 billion in revenue each, both will have to attract a combined total of 31 million visitors annually.

CAN the integrated resorts count on Singaporeans to gamble enough to make them profitable? Citi has doubts.

UNDER QUESTION
The $100 entrance fee is a sticking point as it could prevent both casinos from developing strong, recurring local mass market clients

In a report on the prospects of Las Vegas Sands (LVS), which owns Marina Bay Sands (MBS) here, Citi said that assuming MBS contributes 20 per cent of LVS’s total Ebitdar in its first full year, every eligible Singaporean will have to go to the casino five times a year and spend more then the average visitor to Macau.

Every visitor to Singapore will also have to visit once a year.

‘We liken the current sentiment towards the integrated resort to the Macau gaming boom in 2006/07 and urge investors to not be left holding this parcel when the music stops,’ added Citi analyst Anil Daswani.

Mr Daswani acknowledges that his forecast of 20 per cent Ebitdar from LVS’s Singapore operations is about 30 per cent below consensus. But he also added: ‘If current market estimates are believed, then the Marina Bay Sands will be the most profitable casino in the world in its first full year of operations despite Singapore being a fledgling gaming market.’

Singapore is an untested market as far as gaming goes. Whether Singapore leans towards the Las Vegas model (which counts on non-gaming revenue) or the Macau model (which relies on VIP gamers), will have a significant impact on revenue generators here, and ultimately, the success of the IRs.

Forecasts for gaming revenue at the IRs so far range between US$1-2 billion in the first year.

Based on Citi’s analysis, to achieve US$1.56 billion in revenue each, both IRs will have to attract a combined total of 31 million visitors annually.

This implies that 3.2 million eligible Singaporeans (over 21 years) will have to visit either casino a total of five times. An additional 1.4 million visitors from Johor will have to visit either casino twice a year and 12.2 million tourists will have gone at least once with everybody betting and losing at least US$100. Continue reading →

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Marina Bay Sands opening delayed

Posted on 25 Jul 2009 | Comments Off on Marina Bay Sands opening delayed

Singapore´s first integrated resort, Marina Bay Sands, will make its debut in early 2010 instead of end 2009.

Sheldon Adelson, Las Vegas Sands Corp chairman said at a press conference that the delay is due to the complicated construction of the SkyPark, which is located at the top of Marina Bay Sands´ hotel.

The developer also is also facing shortages of labour and materials such as sand and steel.

However, even before the announcement took place, there were concerns that the Marina Bay project may not be completed in time as the parent company had run into financial difficulty, causing it to suspend construction last year at two sites in Macau.

Property analysts had earlier said that the opening of Singapore´s first integrated resort will help push property prices upwards and bring in high net worth investors.

Meanwhile, the Singapore government is banking on it to create 10,400 jobs for the project – 75 percent of them reserved for Singaporeans – amidst the worst recession the country has seen.

With contractual obligations and Singapore´s tourism sector at stake, the government is currently in talks with Marina Bay Sands to resolve the issue.

“If there is a contractual obligation and if there is a deviation, then I think both parties must agree that it is on a mutually agreed basis. So the Singapore Tourism Board (STB) and other government agencies are in discussions with them and we expect to have a good outcome,” Senior Minister of State, Trade and Industry, S Iswaran, told Channel News Asia.

Marina Bay Sands is Singapore´s first casino project to be awarded in 2006.

Source : Asia Property Report – 10 July 2009

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