Singapore IRs – Long Way To Go

Posted: May 6, 2010 in Uncategorized

6th May, 2010

SPECIAL HIGHLIGHTS      

In Singapore today (6th May 2010) many people woke up from their dreams to realize that the Lion City’s Integrated Resorts still a long way to go…

Series of “soap opera” episodes starting from the opening of Resorts World Sentosa (RWS) to the recent opening of Marina Bay Sands (MBS) indicate that, regardless of all the Talk Shows by the IR operators – from proclaiming a “screaming success” for RWS theme park to “technical problem” of roller-coaster, now the show of true face of a world-class convention service & facility…

For those who are very proud of the Lion City’s tradition of excellent systems and  world-class efficiency, this is the Time To Rethink about why the so called pride of Singapore tourism in this region (the Integrated Resorts) could end up showing the world it is not the case at all.  The organisers and guests of the first conference held at Marina Bay Sands (the Inter-pacific Bar Association Conference) couldn’t agree more with the conclusion of the poor standards shown by one of the most expensive Integrated Resorts in the world!   One of the professionals at the conference says: “This is a big disgrace for Singapore”.

Some of the flaws were voiced out by conference participants,

–  At the five-stars MBS hotel, some delegates spent the first night without air-conditioning.

–  Some guests had to make calls using the mobile phones because the room phones were not working.

–  Some rooms had no hot water or working toilet flushes. (!!!)

–  Facilities like the gymnasium. spa, and swimming pool were not ready for use.

–  A the Sands Expo and Convention Centre, sound quality in the conference rooms was poor, and meetings were interrupted by construction noise or worse.

There are many more…

Long (wrong) Way To go...

The IRs - Too much Talks... loose planning & poor execution

WHAT INDUSTRY EXPERTS SAY —

At Profesional Ground, after observation of what had happened over the past three months of IR execution by RWS and MBS, here’s our assessment of the two Integrated Resorts’ future scenarios:

(1)  For the next 3 – 5years IF the IRs still need to rely on majority revenue stream to come from casino operation, i.e. 75% of total revenue, then it is highly probable that the Lion City’s mainstream local mass market for IR casinos will not be adequate to support any profitable IR.  
 
(2)  IF the IR casinos are not able to grow a larger pie of sustainable contribution by foreign casino patrons, then it is also highly probable that the two IRs may end up heavily cannibalize each others’ local market pool. If this scenario plays out, both IRs will take a hard hit on their EBITDA targets.
 
(3)  For MBS’ MICE business to create a bigger bang, the property needs to be able to attract enough of the world’s large scale business conventions and trade fairs (>10,000 pax) to Singapore and not just the small to mid-size professional conferences. Otherwise MBS will likely to follow Macau’s footsteps, with a lukewarm MICE landscape or at best, stagnates in the middle-ground. 

(4)  Regardless of someone’s promise of “5 plane-loads of 747s ready to bring in VIP high-rollers…”, the future of VIP gaming market for Lion City Integrated Resorts remains negative under the Singapore jurisdiction.  Therefore, cannibalization of the relatively samll grind market will be the main stage.

(5)  The making of “Atlantic City in the East” is being played out, if the above scenarios  materialize.  
 

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