Marina Bay Sands Is Getting More Interesting

Posted: August 13, 2009 in Uncategorized

Contributed by:   Justin Ao (Macau)            13th Aug 2009                       MBS.News

The latest development of Singapore integrated resorts is alarming, though some may consider it as interesting episode.

If I could remember Sands history in its Macau venture, changing of chief operating officer and senior management staff is like going to buffet.  Before the opening of its first casino Sands Macau, three chief operating officers were changed (or fired). Just weeks before opening, its head of IT was fired too.  Within its first few months of operation, its senior vice president of casino and vice president of hotel were fired, including a senior consultant for VIP gaming.  The rest is history…. more changes took place. 

The recent resignation (may be) of Nigel Robert, president of Marina Bay Sands and the vice president of hotel is of no surprise at all for those who are familiar with Las Vegas Sands.  It has to happen at this stage of the game.  Though the newspaper in the Lion City reported the incident as a “surprise”.  

For the sake of the Lion City’s readers, allow me to illustrate further, about what could be the most likely scenarios that caused the attrition of the two senior management staff,

First and foremost, the corporate culture of LVS (Las Vegas Sands) is one that treating “every single smoke as a bush fire”.  This is especially so during the period of pre-opening.  The top management in Las Vegas is so paranoid that always preferring to shoot before asking question.   Therefore, it is most likely that the two poor guys of Marina Bay Sands (MBS) had failed to provide the right answer for whatever teething issues of the three hotel blocks,  including the roof top garden that has become the soar thumb and possibly the show-stopper.

Another potential scenario would be the MBS’s massive system installation failing to progress smoothly as expected.  Especially we are talking about integrated systems including the POS (points of sales), Table & Slot management system, casino marketing system, revenue system etc.  Though the president (i.e. Nigel Robert) might not be a casino guy, he was expected to coordinate and ensure ALL Things go right.  This happened in Sands Macau as well.

One of the apparent and familiar scenarios is, the top man in Las Vegas including the head office management tend to interfere (I mean literary) with almost everything that needs to be planned and executed in its regional operations.  In the era of Bill Weidner and Brad Stone, it was slightly better in the sense that both gentlemen really knew what they were doing.  But the rest are just putting their fingers into every pie.  Decision change is a norms in such scenario and obviously it causes attrition (of senior management staff).

Based on LVS’s track records, may be the Lion City’s authority should be aware of the following “surpises” popping out from Marina Bay Sands from now till its opening day… and beyond.

–  Systems failure that will cause much embarrassment (hopefully not so  much of chaos) on initial operations.  Especially on security issue, guests, and casino operation.  The whole world is watching the first IR opening in the Lion City, especially Macau.

–  Safety & surveillance measures against scam, intrusion and casino floor crowd control.

–  The deviation of targeted timelines for the completion of major construction schedule.  (Now that without the experienced Brad Stone in-charge).

–  Poor MICE turnout in the first year as it was originally promised.   Costs will be the main factor.  (Venetian Macau has the same problem of over-promised, under perform in convention & MICE).

–  And, more senior executive ‘resignations’ coming along the way.

It will be very interesting for analysts to guess the outcome of IR’s casino revenue.  Mind you, this is no Macau per se.   I read about the figure that was mentioned by Mr. Leven who predicted that the casino revenue for Marina Bay Sands will be most likely, 75% of total revenue for the first year of operation.  He was quoted to be hopeful of SGD1b to 2b of casino revenue at stake.

I vividly remember that LVS Macau’s whole year EBITDA (combining two properties) is approx. USD900m.  With relatively weak VIP gaming business to be expected in the first two years, the Lion City’s Marian Bay Sands EBITDA will most likely be around SGD400m – SGD600m at best.   Forget about the 1,000 gaming tables – MBS’s propaganda.  That said, Mr. Leven and his team will have to work triple hard for the Long-shot.

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