Singapore IRs, Hospitality, Retails & Casinos

Posted: May 1, 2010 in Uncategorized

1st May 2010  Saturday

We received queries about the outlook of Singapore hotel industry vis-a-vis the opening of two integrated resorts with a combined of close to 4,000 hotel rooms adding to the market.  Also, many industry players are looking forward to new growth pipelines such as Middle-east riches to be attracted to the island state, by the casinos and big retails space.  

Change is good but not for all... some have to brace for tough time & side-effects

After some evaluation, Professional Ground casino panel generally felt that it is too early to make a conclusion to such business drivers. However, common sense will prevail that,

(1)  That the 4-star rated/pricing hotels will start to lose their customer base to the IRs.  Simple, on the normal non-peak periods, IR hotels will “throw out” their excess room inventory to travel trades, airlines and on the Internet, with promotional room pricing near to or even lower than the 4-star pricing segments.  Basically, 4-star hotels are in for tough time.

(2)  5-star hotels in town will feel the squeeze because IR hotels could offer overall better package mix with more creative marketing & discounts.  Therefore, IR hotels will always get to take the first big bite Unless it is during large convention period in town.  However, how many are there the truly large scale conventions/conferences in a year in town? The real squeeze for the non-IR 5-star hotels will be the low activity cycles.

(3) IR hotels could achieve much better cost effectiveness with casino marketing packages/campaigns that support its “maintenance costs”.

(4) Retails attraction.  Luxury goods retails space in this market is probably over-built?

(5) Hope for casino patrons to grow by leap & bound, because of new growth pipelines such as Middle-east. 

The ProGround Index 003 shows preliminary signs about the Reality.

Index 003 - Putting things in right context

  1. Man in Macau says:

    I am really enjoying your ProGround Index, I think it nails the key points very effectively.

    Keep up the good work.

  2. Admin says:

    Reply from ProGround. We hope the ProGround Indexes can be a good guide for analysts and interested parties. Out there there are too many praises for casinos without looking into reality and hard figures, just based on Hope.

    Pass on the ProGround information to as many friends and business community as possible, so that more people understand the myths and fundamentals of gaming industry.

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