Shopping trumps gaming

Singapore’s tourism industry has shown continued growth in 2017, building on from a record year in 2016, though the figures still suggest that the bulk of the money being brought into the island state is not finding its way onto the casino floors.

In the seven months through to the end of July visitor numbers increased 3.8 percent, on track to meet the top end of the Singapore Tourism Board’s (STB’s) projections for this year of between 1 percent and 4 percent growth. China arrivals were up 6.6 percent to July, posting a strong start, but trailing off in the following months.

In Q1, the only period so far this year with a detailed breakdown, tourism spend rose 15 percent to S$6.4 billion ($4.7 billion), outpacing a 4 percent rise in arrivals to 4.3 million.

In that period, Chinese travellers emerged as both the biggest spenders and leading source of visitors, chalking up double-digit growth in tourism receipts and arrivals.

Police arrest 58 in illegal gambling bust

Singapore police arrested 58 suspects following a four-day multi-agency joint operation in September. According to a statement from the police, the operations were led by the Bedok Police Division and were supported by officers from from the Singapore Customs, Immigration and Checkpoints Authority, Central Narcotics Bureau, Criminal Investigation Department and Health Sciences Authority. Forty-five men and three women were arrested under the Common Gaming Houses Act, while two women were arrested for vicerelated offences.

Genting liquidates S.Korea unit

Genting Singapore has dissolved and liquidated its subsidiary in Korea, Claremont Co. Ltd. The subsidiary was first set up in August 2016, focused on the leisure and hospitality related business. It was placed under unit holder’s voluntary dissolution and liquidation in May of this year. According to a filing from Genting, the liquidation is not expected to have any material impact on earnings per share of the company for the financial year ending Dec 31 2017. Genting said it was pulling out of its planned venture in Jeju with Landing International to focus on a potential bid in Japan.

The STB reported gains in all areas of tourism spending except sightseeing, entertainment and gaming. Spend on shopping, for example, shot up 38 percent to S$1.6 billion, while the spend on sightseeing, entertainment and gaming was flat at S$1.08 billion.

Brighter prospects

Despite the lacklustre statistics, Singapore’s two gaming operators reported an improvement in Q2 results as a series of measures to get costs under control and to cut back on bad debt fed through to the bottom line.

Genting Singapore’s Resorts World Sentosa was the standout performer, beating most analysts’ expectations. It has been lagging Las Vegas Sands unit, Marina Bay Sands, as it struggled with bad debts from its VIP players, mostly from China.

However, efforts to tighten its policies on credit provision and a marketing push towards the premium mass sector appear to be paying off. 

The group achieved revenue growth for three sequential quarters. Overall revenue rose 24 percent to $596.1 million, helped by a higher rolling win percentage in the premium player business. Adjusted EBITDA soared 152 percent to $292.7 million.

At Marina Bay Sands revenue rose 17.7 percent to $836 million and adjusted property EBITDA was up 37.8 percent to $492 million.

Morgan Stanley notes that the reported property EBITDA was the second-best since opening in 2010, though was mostly driven by luck as the mass market did not grow.

Fitch Ratings has said it expects overall GGR for this year to be flat at about US$4 billion. 

Analysts see few catalysts to spur significant casino revenue growth in Singapore, though the two operators have been pushing hard to add and diversify non-gaming attractions to bring in more clientele.

Resorts World Sentosa has been focusing on the gourmet food and lifestyle theme, hosting a pop-up street food event in August and a festival of gastronomy in September. One of Belgium’s rising culinary stars, Chef Alexandre Dionisio from the Two Michelin-starred La Villa in the Sky, was brought in to host an event in October. 

Marina Bay Sands recently unveiled a premium afternoon tea venue, Renku, and has ramped up the star power by hosting Bollywood and K-Pop stars.

Las Vegas Sand Chairman and CEO Sheldon Adelson earlier this year said he may consider selling a 49 percent stake in the company’s Singapore luxury mall, the Shoppes, to raise funds to finance expansion plans elsewhere, notably Japan. Analysts expect the stake to raise as much as U$3.5 billion if it goes ahead.