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Singapore Casino-Resort Projects
Singapore tourism to get boost from integrated resorts
SINGAPORE — Singapore has been missing that "certain something" as a tourist destination. Now, finally, it may have the answer in two integrated casino-resorts-the recently opened US$4.4 billion Resorts World Sentosa (RWS) from Malaysian gaming giant Genting Group and the US$5.5 billion Marina Bay Sands (MBS) now slated for a late-April opening.
The Sands project reportedly was nearing default late last year, but Las Vegas Sands Corp. raised US$2.1 billion in a bond sale to complete the project.
The two resorts-with government regulations allotting less than 5% of their space for gaming-reflects an attempt to diversify Singapore's tourism base to compete more effectively with neighboring countries. But whether or not Singapore can compete with Macau or become the Las Vegas of Southeast Asia might depend on how consumers react to the expected imposition of restrictions in the form of a S$2,000 (US$1,440) annual fee or S$100 entry fee, as well as stringent rules for traditional gambling junkets to deter money laundering.
However, the two resorts are expected to contribute about 1% to 2% of Singapore's gross domestic product, help the country achieve visitor arrival goals of 17 million by 2015 (10 million in 2008) and eventually add 35,000 jobs to the economy. The government hopes to boost tourism earning to S$30 billion (US$21.5 billion) by 2015-tripling current figures.
While neither RWS nor MBS executives would offer any revenue projections, reports have MBS with net profits of between S$800 million and S$1 billion next year, with the smaller Sentosa project netting S$750 million. Analysts say 70% to 80% of revenues initially will come from gaming, sliding back to 50% to 60% once all the other attractions are open.
Robert Hecker, Singapore-based managing director for Horwath Asia Pacific, says the timing of these projects is right for the region's rebounding markets and will help drive incremental business to the rest of the market.
The Missing Link
RWS's four hotels-Festive Hotel, Hard Rock Hotel Singapore, Crockfords Tower and Hotel Michael-and shop outlets on Sentosa Island opened January 20, offering a combined inventory of 1,350 rooms and 10 restaurants. Another two hotels, Equarius Hotel and Spa Villas, will add another 500 rooms when they launch after 2010. Initial reports showed all four hotels fully booked with very limited availability in March and April. "Our first weekend that was opened to the public saw us hit more than 90% in room occupancy with Festive and Hard Rock Hotels fully booked," says Robin Goh, assistant director of communications.
The sprawling 49-ha (121-acre) resort designed by Michael Graves on an island a quarter-mile off the coast plans to open its casino February 14. The other main attraction—Southeast Asia's first Universal Studios theme park—is also expected to open within the first quarter. Built in less than three years, RWS is targeting a wider family-focused audience with its theme park and the world's largest marine life park, scheduled for 2011. In addition, RWS will also include 26 function rooms, a 1,600-seat theater and a destination spa. The strong F&B component, when fully operational, is expected to serve 25,000 to 30,000 meals a day, and 40,000 meals on weekends.
RWS Chief Executive Officer Tan Hee Teck has been quoted as saying he expects 60% of Sentosa visitors to be foreigners, of whom 20% to 25% would be from China. In addition, initial MICE business looks very positive, with 33 conferences booked so far this year, no doubt taking advantage of the 6,300-seat ballroom.
Hecker says having a branded theme park as well as integration of highly marketable attractions-as opposed to how disparate and non-integrated Sentosa has been in the past-makes it the "missing link" in Singapore's tourism offering. "Throw in the casinos to help ‘subsidize' such major tourist and visitor attractions and you have a clear win-win scenario. The only real issue I can foresee is access and crowd management, particularly for Resorts World."
With more than 1,300 team members already on board, MBS in late April will open the first phase, including nearly 1,000 hotel rooms, part of the shopping mall and convention center, the first three celebrity chef restaurants and other dining, as well as the casino, according to CEO and President Thomas Arasi. The second phase-which includes the Sands SkyPark sitting on the 57th story of the signature-curved three hotel towers, the Event Plaza along Marina Bay and more shops and restaurants-will open in the summer. Theaters and the museum will open later in the year.
"You can't beat the location of Marina Bay-prime city center for a convention-fueled destination," Hecker says. "It's iconic and will be perceived and realized as a must-visit property on an international level."
Arasi says the curves of the Marina Bay Sands hotel towers are "spectacular, both visually and from an engineering perspective." Those same towers have also been the source of engineering challenges, as has been reclaiming land from the sea for the 120,000-sq.-m (1.3 million-sq.-ft.) convention center, which has pushed back the opening to April.
The sloping towers and the straight legs were constructed as two separate buildings. "We used steel link trusses to connect the two structures at level 23 to form one building," Arasi says. "The link trusses helped to transfer the weight from the sloping legs to the stronger legs. We built one hotel floor every four days-an unprecedented feat for a project of this scale. The building is already an icon redefining the Singapore skyline."
The 7,000-tonne (15.4 million-pound) steel structure of the Sands SkyPark took 14 heavy lifts to place. "We have fitted out the hotel rooms up to about the 22nd floor, we are working on the interiors of the convention center and the casino, and we completed the chandelier in the casino. The event plaza along Marina Bay is almost complete. It's really exciting to see this come together," Arasi says.
To drive business, Arasi says MBS already has a strong lineup of events for the Sands Expo and Convention Centre that will bring more than 150,000 attendees to the integrated resort beginning this year. Among many events, the resort is hosting the 2010 UFI Congress, which is coming back to Singapore after a 15-year absence. "The diversity of trade shows and conferences in Marina Bay Sands is a strong sign of support for us and for Singapore," Arasi adds.
Arasi says his sales team is also working closely with the Singapore Tourism Board on joint marketing activities. "We have built up our sales network in China, Hong Kong, Japan, Korea, Thailand, India, as well as in Europe and the Americas," Arasi says. "In terms of geographical mix, we are targeting the markets of Southeast Asia, China, India, Middle East and Russia, as well as the U.S. and Europe."