Delay in opening of Marina Bay Sands could potentially mean big losses

Source : Channel NewsAsia – 10 Jul 2009

The delay in the opening of Marina Bay Sands integrated resort could potentially mean millions of dollars in losses.

Analysts say that it is not just the integrated resort that stands to lose, but Singapore could potentially see lower tourism receipts as a result.

The opening of Marina Bay Sands at year-end was seen as one of the highlights in Singapore’s tourism calendar, in what has been a dismal year of falling visitor arrivals so far. But that has now been pushed back by a few months to early 2010.

While it is hard to pinpoint an exact dollar value for potential losses, some industry-watchers say it could go into millions.

Sands Bethlehem, for example, which has just opened in Pennsylvania on May 22, made US$5.9 million in its first full week of business alone.

But there is also the cost in terms of tourism revenue for Singapore.

Jonathan Galaviz, gaming analyst and partner at Globalysis Ltd, said: “There is a certain amount of economic loss that the Singapore government needs to be looking at as it relates to two things.

“One is the original contract that they made with the IR owners and operators as it relates to the construction timeline that they promised in their original proposal to the government.

“And second, what is the loss of tourism visitation on a month to month basis every month that the IR is not open or not 100 per cent open?”

H P Loi, chief executive officer of the Tourism Management Institute of Singapore, said: “Even if they are to open in first part of 2010, not all the facilities will be up… the perception of travellers might be ‘I will wait for whole resort to open, then I will come’.”

But some also note that the year-end is a low season for the conventions sector.

Loi said: “The November-December period – convention business is usually on the lower side because a lot of companies are closed for the holiday season. So even if you open in November-December, big conventions won’t come in yet.”

The government says it is currently in talks with Sands on contractual obligations but is hopeful of a good outcome.

Market watchers say that with both integrated resorts now trying to rush to possibly open before the important Lunar New Year holiday period in February next year, the country as a whole can have a more integrated approach towards marketing both resorts to the region – especially the China market, whose arrival figures into Singapore have been slipping in recent months.