Being first may not matter

Source : Straits Times – 23 Dec 2009

NO ONE at the ChildAid concert over the weekend could have missed a huge mural in the lobby of the Festive Grand Theatre at Resorts World Sentosa (RWS): it touted itself as Singapore’s ‘1st Integrated Resort’.

Staff members were out in force to make sure the resort’s first public function went without a hitch – in the auditorium, carpark and the restrooms.

From chief executive officer Tan Hee Teck down, they were clearly excited at the prospect of finally showing off the goods, so to speak. And yes, people gawked.

RWS has overcome a six-month handicap to beat Marina Bay Sands (MBS) with a soft opening for concert ticket-holders, and has declared that it will be throwing its doors open to all in early January.

On the other hand, MBS has been battling speculation and reports that it is in trouble – money-wise and management-wise. Its initial intention to open all its offerings by the end of the year had to be taken back. It will now open some parts by April, said its flamboyant chairman, Mr Sheldon Adelson. He insists the delays are ‘no big deal’.

Is he right?

The fact is, the sooner it can open for business, the faster it will generate income. This is critical because both projects have busted their budgets not once, but twice.

MBS’ estimated cost went from US$3.6billion (S$5billion) to US$4.5billion to US$5.4billion. Resorts World saw its cost rise from $5.2billion to $6billion to $6.59billion.

Analysts said RWS’ rush to be first to open could be an attempt to cash in on the ‘first-mover’ advantage and lock in resident patrons.

By law, Singapore citizens and permanent residents have to pay an entrance fee of $100 per day or $2,000 per year to patronise a casino. And the annual pass is exclusive to one casino only.

There is a small speed hump which few know about. The casino that opens first has to pay $15million a year for a licence. The fee is reduced to $12.5million when another casino opens up. When this happens, CasinoA is refunded a pro-rated amount.

This sum, however, is small beer compared to the billions that resorts are sinking into their projects.

MBS has blamed the price of sand, the cost of construction and even the rain for the delays. A critical building structure, the SkyPark linking the three hotel towers, will be hauled into place by the end of the year. That section will open for business only in June.

Mr Adelson has already put a figure on how much his resort will earn annually: US$1billion. Putting things in place properly, he said, will make up for not being able to generate revenue sooner. RWS won’t get a ‘gold star’ for being the first to open, he snorted.

‘Let them open first and we’ll see what mistakes they make and we will correct them so we’ll make fewer mistakes.’

Mr Felix Ling, a senior partner of Platform Asia, a Singapore-based casino consultancy firm, concurs.

He said: ‘An early opening is a double-edged sword. It could work to your advantage, but could also expose your soft underbelly.’

For example, the competitor can suss out its rival’s weaknesses and strengths, he said. So any minor improvement on the part of the latecomer would be appreciated by customers more.

Key business processes need to be in place in the casino and theme park for things to run smoothly, service quality has to be top notch, the attractions have to give people a sense of excitement. Otherwise, both resorts could turn out like Hong Kong Disneyland, he said.

The park, which opened in 2005, was plagued with problems from the start – including hour-long waits for rides, inadequate parking and food shortages.

Early signing of annual levy pass holders, Mr Ling added, may not be that big an advantage as the competitor can always lure customers through creative marketing programmes, superior trip incentives, and better customer loyalty programmes.

Agreeing, CIMB-GK regional economist Song Seng Wun said: ‘Being first to open will get you only bragging rights.’ Ultimately, the proof of the pudding will be in the eating.

Both are worthy players. MBS’ parent company, Las Vegas Sands (LVS), knows the meetings and business travel market well – the trump cards that won it the bid in the first place. LVS was credited for bringing Mice – industry parlance for meetings, incentives, conventions and exhibitions – to Vegas. When it went to Macau, its Sands Macao recouped its investment capital within a year.

More recently, it has battled potential bankruptcy and has brought back stalled Macau projects after selling shares in the Hong Kong stock market. It has also fired up to 11,000 construction workers in Macau and has put work on a project there on hold, to focus its resources on its Singapore project, which it has described as the company’s No.1 priority.

On the other hand, RWS’ parent, Genting Group, has had years of experience of operating in Asia, running the casino resort in Genting Highlands and Star Cruises.

Also, working with a world-class partner like Universal Studios has given RWS more cachet than it ever had running its own theme parks.

Expectations of RWS are high precisely because it will be the first to open. Flaws in facilities or service would not be kindly tolerated. Nor would hitches in its theme parks, including its roller coasters and other mechanical devices. In fact, if anything untoward were to happen, the speed that is now praised as efficiency would be regarded as unnecessary haste.

By all accounts, its first public function went smoothly. One thing the staff did not anticipate: When blue and white balloons were dropped from the auditorium ceiling at the end of the concert, delighting the audience, they wafted out of the door and filled the staircases.

Some stumbling and fumbling ensued as patrons made their way down the steps. Balloons were pricked by women’s stiletto heels.

To be sure, that is too small a thing to burst RWS’ bubble. But you can be sure that its rival was there – watching.

Marina Bay Sands’ loss is Genting’s gain: DBS Vickers

Source : Business Times – 23 Dec 2009

RWS gets first mover advantage from rival’s delay

GENTING Singapore’s Resorts World at Sentosa (RWS) will benefit from construction delays at Marina Bay Sands (MBS) caused by problems with weather and sub-contractors.

In a research note yesterday, DBS Vickers said: ‘The second delay in the soft launch of MBS will further enhance RWS’s first mover advantage.’

DBS Vickers also said that ‘RWS should be able to catch the Chinese New Year peak season and lock in local market share’, highlighting that the $2,000 annual pass in lieu of $100 per entry to be paid by Singapore residents is exclusive to one casino.

The broking house maintains a ‘buy’ call on Genting Singapore at $1.16 a share and a target price of $1.30 per share.

‘RWS is on track to open in January 2010 and has submitted its casino licence application – now pending finalisation of the Casino Control Act and interviews of employees by the authorities,’ it said, adding that RWS has already recruited about 6,000 staff out of a target of 8,000.

The research note comes a day after Las Vegas Sands chairman Sheldon Adelson said the opening date for MBS had been pushed back from the first quarter of 2010 to Q2.

Speaking at a news conference, he attributed the delays to rain and certain sub-contractors going bankrupt.

Mr Adelson also shed light on the prospect of junket operators, saying that few, perhaps even none, will operate here.

In its research note, DBS Vickers said a strict junket licensing regime will be in place ‘and we believe the Singapore government will be pragmatic in ensuring both integrated resorts will be a success’.

For RWS, DBS Vickers expects gaming revenue to come mainly from the grind segment, contributing about 60 per cent of gaming revenue.

‘Universal Studios should help draw in the mass market, differentiating RWS from MBS’s MICE/business visitors focus and help diversify revenue base,’ it said. It expects non-gaming revenue to contribute 25-30 per cent of RWS’s total revenue.

‘In any case, a higher percentage of direct VIP business should help boost margins given the typical lower rebates compared with junket commissions,’ it said. ‘Although this could lead to higher default risk, we believe it should be easier to conduct credit checks and enforce debts given Singapore’s target market.’

Integrated Resorts in Singapore upbeat about outlook in 2010

Source : Channel NewsAsia – 23 Dec 2009

Three years in the making and Singapore’s two integrated resorts will finally open soon and the operators are upbeat about the prospects.

Resorts World Sentosa, due to open in a matter of weeks, expects to attract 13 million visitors in the first year alone.

The resort said it has been receiving thousands of enquiries from the public everyday. And one of the most talked about attractions is Universal Studios. The theme park is expected to attract some 30,000 visitors each day.

Visitors will encounter ferocious dinosaurs, Egyptian mummies and if that is not thrilling enough, a pair of duelling roller coasters should do the trick.

Resorts World Sentosa said with 60 F&B outlets, six hotels and retail options, there will be no lack of things to see and do.

Noel Hawkes, vice president, Resort Operations, Resorts World Sentosa, said: “We’ve got Michael Graves studio – Michael Graves being the man who designed the entire resort.

“We’ve got a Chihuly studio – Dale Chihuly is probably the most famous artist and maker of fabulous glass pieces, which by the way, he will have many pieces on display within the casino and in our Crockfords tower.”

And over in the downtown area, construction of the Marina Bay Sands resort is progressing well. The resort is touting its crown jewel in the form of the huge Sands SkyPark which sits 200 metres in the air, linking the three hotel towers.

The SkyPark will feature a public observation deck, landscaped gardens, outdoor pools and F&B options. Its massive convention space, at 120,000 square metres, will also bring over 150,000 delegates to the resort from 2010.

On the lighter side of things, the award-winning Broadway musical “The Lion King” will be making its Southeast Asian premiere in Singapore.

Thomas Arasi, CEO, Marina Bay Sands, said: “The Lion King is going to stimulate a lot of interest and a lot of curiosity. Once we move further down in our programming, it’s later on in the property’s development, but the same will occur with our second theatre.

“We are also getting a lot of buzz now and it will really pick up in the first and second quarter, about the compendium, the assortment of celebrity chefs restaurants that we have coming in.”

And those feeling lucky will clearly be hoping to take on Lady Luck in the casinos at the two resorts.

Sheldon Adelson says…

Source : Straits Times – 22 Dec 2009

Delayed opening

‘We are still on schedule for March 31. However, we lost a few days in October and November due to rain and a couple of bankruptcies of sub-contractors, so I suspect we will lapse over into the beginning and middle of April, give or take.’

‘I wish you guys would get off the delay thing. The delay thing is nothing. We’re not in it for a day or a week. We are in it for decades, so the delay of a day or week is meaningless… we’re not going to open until it is right, whether it is delayed or not delayed.’

‘There was nothing that we could control that I regret. Who would have known there would be a sand embargo?’

Dealing with the Government

‘Sometimes they are a pain in the behind… But I’d much rather have that in dealing with the Government, combined with the reliability and predictability and transparency of this Government. Whatever the Government tells you, you can bank on it.’

Rival Resorts World Sentosa opening first

‘This is sailing in unchartered waters. Mistakes will be made – by them or us. Let them open first, and we’ll see what mistakes they make and then we’ll correct them so we’ll make fewer mistakes. What’s wrong with that? I mean, you don’t get an award, you don’t get a gold star on your forehead for being the first one to open.’

High rollers will still come

‘Look at me. Do I look stupid? Do you think we put five and a half billion dollars in here because we didn’t check the market..? Trust me, there will be more high rollers than you can shake a stick at.’

‘There are so many high rollers. We have five plane-loads of… 747s flying, starting yesterday. They flew to Vegas with about a hundred high rollers. Two of the trips come from KL. One trip from Singapore, one trip from Bangkok, one trip from Jakarta and one trip from Hong Kong. They all say they’re waiting for Singapore to open.’

Sands says IR will be up and running by April

Source : Straits Times – 22 Dec 2009

THE first guests at the Marina Bay Sands integrated resort (IR) will be able to check in, have a meal, attend a convention and gamble by the middle of April next year, at the latest.

That was the new deadline revealed by Las Vegas Sands chairman Sheldon Adelson yesterday.

That means about 1,000 hotel rooms, several eateries (including three of its six celebrity-chef restaurants), part of the convention facilities and the casino floor will have to be ready by then, or the operator risks failing to secure its casino licence.

The rest of the project will open in phases before the end of next year.

Sands training ‘early next year’

Mr Adelson also had an update for new employees, some of whom were in the news last week waiting to hear when training for their new jobs as dealers and croupiers would start.

Originally they had been told it would be October, but yesterday, the Sands top man said it would be early next year.

To date, about 500 employees have started work at the IR, out of the estimated 14,000 needed to run the entire resort. Of these, 85per cent are Singaporeans, a figure that is expected to dip to about 70per cent because of a lack of local interest in entry-level positions, according to the company.

The project has already been hit by several delays.

When Las Vegas Sands won the bid in 2006, the resort was to be ready by the end of this year. But in July this year, the opening date was pushed back to the first quarter of next year, end-March at the latest.

The delays were put down to heavy rain, the bankruptcy of a couple of sub-contractors, and a sand embargo.

There was also a shock reshuffle of top management in August, with two of its key executives being fired.

At the same time, project costs have ballooned from early projections of US$3.6billion to the current US$5.5 billion (S$7.7 billion) price tag.

But with the resort’s three 55-storey towers framed by the window of the Ritz Carlton suite where he met the media yesterday, the combative Mr Adelson was ready to dispel any suggestion that the project was in trouble.

The 76-year-old billionaire said: ‘I wish you guys would get off the delay thing. The delay thing is nothing.’

It is not going to open until the time is right, he said.

He maintained that the IR is still on track to earn US$1 billion a year, well in excess of analysts’ projections of between US$400 million and US$800 million, and could see a return on its capital investment in five years.

‘If you told me to make a list of a thousand risks, I would not have the embargo of sand from Indonesia on that list. Everything happens, but so what? We are in this for the long term.’

Indonesia banned the export of sand to Singapore in early 2007, which drastically pushed up concrete prices. Things improved six months later, when imports started from Vietnam and elsewhere.

The embargo also hit Resorts World Sentosa (RWS), the second of two IRs being built here, but the Genting-led project remains on track for an early 2010 opening, with some 600 dealers already trained.

Mr Adelson said he was ‘happy’ about RWS opening early.

‘You don’t get a gold star on your forehead for being the first one to open. We are going to open when it’s right.’

He was equally frank about his dealings with the Singapore Government.

‘Sometimes they are a pain in the behind’ – but he said he was glad it was that way. ‘I’d much rather have that in dealing with the Government, combined with the reliability and predictability and transparency of this Government.’

On whether the Government’s ban on casino junkets – whereby a promoter brings in a group of high rollers in exchange for a cut of the turnover – would deter the big spenders from turning up in Singapore, he shot back: ‘Look at me. Do I look stupid? Do you think we put five and a half billion dollars here because we didn’t check the market..? Trust me, there will be more high rollers than you can shake a stick at.’

He was bullish also about Sands’ projects in Macau. Construction work that was suspended after falling revenue is expected to restart within five months.

And Mr Adelson expects the first phase of its Cotai strip project to open by June 2011.

---

What’s opening

By mid-April: About 1,000 hotel rooms, parts of the convention centre and shopping area, restaurants (including three celebrity chef eateries) and casino
By mid-June (60 days later): The rest of the resort, including the Sands Sky Park, with the exception of the Art Science Museum and the two theatres
By September: One theatre
By end-2010: The Art Science Museum and remaining theatre

Las Vegas Sands casino in S’pore faces further delays

Source : Business Times – 21 Dec 2009

A Las Vegas Sands integrated resort (IR) may not be Singapore’s first to open next year after the developer said on Monday it would be operational only in April instead of February as previously announced.

Las Vegas Sands chairman and chief executive Sheldon Adelson said construction of the Marina Bay Sands casino has been slowed down by the monsoon rains and financial problems facing some subcontractors.

‘We’re assuming we’re going to open between April 1 to 30,’ Mr Adelson told a press conference in Singapore.

‘We’re here for the long-term, we expect to have this opened for decades and that’s what counts,’ he said, describing the new opening target as only a ‘minor delay’.

Singapore’s other casino complex, Resorts World at Sentosa, is expected to open in phases starting in the first quarter of 2010, a spokesman from developer Genting International told AFP.

When Mr Adelson was last in Singapore in July, he said Marina Bay Sands, which includes huge exhibition and convention facilities, was likely to open in either January or February.

The US$5.5-billion Marina Bay Sands casino was originally scheduled to open at the end of 2009 but the project was first delayed due to a number of factors, including material and labour shortages.

Asked about the earnings projections for the Singapore project, he said his company expects about US$1 billion annually before deducting interest, taxes, depreciation and amortisation expenses.

‘The people in the market have come out to between US$400 million and US$800 million,’ he said.

‘We think it will be in excess of a billion annually.’

Las Vegas Sands won the right to build the IR in 2006, one year after the republic gave the go ahead for legalised casino gambling.

Malaysia’s Genting conglomerate won the bid for a second IR which it named Resorts World at Sentosa.

Singapore hopes the two IRs will boost its tourism appeal and draw more visitors to the island which relies mainly on man-made attractions to entice tourists.

Las Vegas Sands’s partly finished development on Macau’s Cotai strip – put on hold after the economic crisis hit last year – could be completed within the next five years, Mr Adelson was quoted as saying in an interview with CNBC.

Sands raised US$2.5 billion in a Hong Kong initial public offering last month, part of which will be used to kickstart the stalled project.

About 11,000 construction jobs were lost when Sands halted construction, dealing a blow to the former Portuguese colony.

Integrated resorts set up green initiatives

The two upcoming integrated resorts in Singapore, which open in the first quarter of next year, are not planning to gamble with the environment.

In fact, they have spent millions of dollars on green technologies and sustainable building concepts to conserve resources.

It has been a roller coaster ride for the environment, and climate change is a real threat. So companies, like Singapore’s two integrated resorts, are striving for greener practices.

Resorts World Sentosa, for instance, transplanted 900 trees affected by construction work. It is now replanting them – along the streets of Hollywood and New York – within its Universal Studios theme park.

The resort also has Singapore’s largest solar installation, that can generate over 500,000 kilowatts per hour of energy a year.

Noel Hawkes, vice president, Resort Operations, Resorts World Sentosa, said: “(With regards to) the solar power, we reckon we can save half a million Singapore dollars easily on electricity bills.

“We also have a very interesting ETFE roofing system over many of the al fresco dining areas of the resort, as well as in the Universal Studios where people are queuing, and this reduces the amount of sunlight by almost half.

“And we couple that with an eco-cooling system, which we have developed; it is not air conditioning, but it is cooling and it costs one-third of the cost of air conditioning.”

The ETFE plastic roofing will shelter about 70 per cent of the pedestrian walkways at the resort.

Another cost saving of over S$160,000 a year will come from a lagoon, which will harvest rainwater to be used for irrigation.

Meanwhile, Marina Bay Sands resort is also doing its part – by recycling paint from previous projects, as well as recycling construction waste. When completed, guests staying in the 2,500 luxury rooms at the three hotel towers can also play a role.

Thomas Arasi, CEO, Marina Bay Sands, said: “We have spent S$25 million on an intelligent building management system, and what that would do is that it would automatically record the customer’s needs and energy saving patterns.

“On the remote control in our guest room, there will be an eco button that you can hit and it will just take things up a notch and hopefully you will not feel it.”

Marina Bay Sands said it has also invested a substantial amount of money on the construction and operation of a massive chilled water plant to be located just off its third hotel tower. This will be done on a cost sharing basis between the resort and public entities.

The plant is expected to be ready in late 2010. Marina Bay Sands said it will provide chilled water to cool the resort as well as new buildings in the surrounding districts.

Observers said the use of chilled water could help lower air conditioning costs by up to 20 per cent.

Source : Channel NewsAsia – 11 Dec 2009

Marina Bay Sands expects 150,000 Mice participants

MARINA Bay Sands (MBS) said yesterday that it has signed up events for its Sands Expo and Convention Centre that will bring over 150,000 attendees to the integrated resort (IR).

The events cover a range of industries including engineering, legal, property, lifestyle, textiles, life sciences, machinery, manufacturing and renewable energy.

Each event, by established organisers and new players, will bring between 3,000 and 25,000 attendees to MBS.

‘We are proud that Marina Bay Sands is the premium venue for meetings, incentives, conferences and exhibitions (Mice) in Asia,’ said MBS chief executive Thomas Arasi. ‘Marina Bay Sands has unique appeal, and the wide variety of different events is a strong sign of support for us and for Singapore.’

Next May, top lawyers will congregate at MBS for an annual conference organised by the Inter-Pacific Bar Association (IPBA). As climate change is the theme, former US vice-president Al Gore and climate change proponent will be the keynote speaker. The conference was last held here in 1994.

Other returning events that have chosen MBS include the 2010 UFI Congress, which is returning to Singapore after a 15-year absence. UFI is the global union of trade show organisers and fairground owners, as well as the major associations of the exhibition industry.

New shows that will debut at MBS include the Industrial Fabrics Association International Expo Asia 2011 trade show, the first major textile event tailored for the Asian audience.

The team behind the Sands Expo and Convention Centre is also expanding and working on more than 100 additional prospects for Mice events over the next four years, MBS said.

Michael Leven, president and chief operating officer of MBS’s developer Las Vegas Sands, said in August that revenue from gaming operations is likely to make up about 75 per cent of MBS’s earnings before interest, taxes, depreciation and amortisation (EBITDA) in the ‘early days’.

But ultimately the plan is for gaming to contribute only about 50 per cent of EBITDA, with non-gaming components such as the Mice facilities pulling more weight down the track.

Source : Business Times – 8 Dec 2009

Marina Bay Sands signs 30 deals for events at Expo & Convention Centre

Marina Bay Sands on Monday said it has signed over 30 deals for premier events at its new Expo and Convention Centre.

This is expected to attract over 150,000 attendees to the integrated resort when it opens next year.

Marina Bay Sands said it has sealed events from a wide range of industries, from the engineering and legal sector to life sciences and renewable energy.

Some events are marking their return to Singapore after many years.

For example, the Inter-Pacific Bar Association 2010 Conference will see top lawyers from the region converging in Singapore in May for the first time since 1994.

With the theme of ‘Climate Change’, the prestigious event counts former US Vice President and environment champion Al Gore as its keynote speaker.

Other returning events include the 2010 UFI Congress which will come back to Singapore after a 15-year absence.

New shows that will debut at Marina Bay Sands include the Industrial Fabrics Association International Expo Asia 2011 trade show – the first major textile event catered to the Asian audience.

In addition, the Marina Bay Sands team is working on more than 100 additional prospects for meetings, incentives and conventions over the next four years.

Source : Channel NewsAsia – 7 Dec 2009

Resorts World househunt reaches into HDB heartland

Source : Business Times – 28 Nov 2009

Property consultants say Sentosa IR is scouting for rental flats for some of its foreign staff

VISITORS to the Universal Studios theme park in Resorts World at Sentosa (RWS) will soon be able to live out adventures seen in various movies. There will be zones based on films such as Madagascar, Shrek and Jurassic Park, to bring thrill-seekers to a make-believe world far away from home.

For some employees at RWS, being away from home will also be a new adventure. The integrated resort will be hiring a considerable number of foreigners, and it is said to be searching for hundreds of HDB flats to help them settle in. C&H Realty managing director Albert Lu said that RWS is looking for HDB flats to rent, and approached his firm a few months ago to find out about the rental market. RWS did not share many details then, but the number of flats is ‘in the hundreds’, he told BT.

Another property market insider who declined to be named also said that RWS has been ‘aggressively looking for flats to rent’, and is probably in need of ‘a few hundred’ units.

So far, there is no official statement on the number of foreigners that RWS could hire. Overall, it will employ about 10,000 people when it opens next year. RWS spokesman Robin Goh told BT that it remains committed in recruiting Singaporeans and Singapore permanent residents.

A media report in June noted that RWS had hired 600 workers, of whom 80 per cent are locals. Assuming that the local-foreign ratio stays constant, its headcount from abroad could reach 2,000.

Going by HDB rules, one- or two-room flats can each be rented out to at most four people; three-room flats to at most six people; and four-roomers or bigger flats to at most nine people. Assuming that RWS hires 2,000 foreigners and all of them rent four-room flats, it would need to find at least about 220 units.

Mr Goh said that RWS started looking for ’suitable accommodation’ for foreign staff early this year, with help from a ‘reputable service provider’. He did not specify the types and number of housing involved.

‘To help reduce their stress and anxiety of relocating overseas, we assist our foreign team members in addressing one of their basic needs – accommodation,’ he said. ‘We make sure that they settle down comfortably as well as enjoy working and living in Singapore.’ And it is important for RWS to keep its employees happy because that could enhance their work performance and in turn, visitors’ experience at the integrated resort, he said.

Mr Goh added that RWS considered several factors in choosing accommodation, including the place’s accessibility and proximity to amenities such as convenience stores. ‘The locations we have chosen facilitate good interaction between the local community and foreign talent,’ he added. BT understands that units at Tiong Bahru and Toa Payoh have been found.

C&H Realty’s Mr Lu said that he believes that RWS would want flats in areas near Sentosa, such as Telok Blangah. But he pointed out that the supply of rental flats in such central locations is tight, and RWS might have to broaden its search to estates near MRT stations.

Rents of HDB flats in the central region rose between the second and third quarter of the year. For instance, the median sub-letting rent for a four-room flat in the area increased from about $2,000 to $2,200.

HDB’s website shows that up to the third quarter of this year, the agency has granted 11,235 sub-letting approvals. The bulk of these – 3,978 or 35 per cent – were for three-room flats. Another 3,593 approvals were for four-room flats.

Also, looking across all towns and flat types, median sub-letting rents have remained relatively steady from the first to third quarter.

Dennis Wee Group director Chris Koh observed that the HDB rental market is ‘more stabilised’ compared with the period when collective sales were rife and many displaced residents were looking for lodging. His firm has seen more rental enquiries direct from foreigners working with RWS.

Marina Bay Sands, the other integrated resort due to open next year, has not engaged property agents to look for accommodation for its foreign staff. ‘Housing arrangements will take into account the needs of the prospective foreign employees,’ said a spokeswoman. ‘At this time, Marina Bay Sands is giving priority to attracting and selecting Singaporeans and permanent residents for our job opportunities.’

What’s up at the bay

Source : Sunday Times – 15 Nov 2009

Marina Bay, Singapore’s crown jewel, is slowly but surely taking shape

In 1992, there were plans for a landmark twin tower – Singapore’s tallest office buildings – just at the water’s edge in Marina Bay, soaring to as high as 80 storeys.

A model of the towers was even on exhibition in 1996 when plans were unveiled for the area.

Those monumental structures never quite materialised on the fringe of the waterfront. And it was probably a good thing: Imagine how people in the other buildings behind the two mammoth structures would have felt.

The new plan by Singapore’s urban planners was much more equitable: Let everyone have a piece of the bay views.

It was a rethinking that meant throwing out the original blueprint of densely developed buildings along the waterfront, and creating districts rather than block after block of commercial buildings.

And so it was mandated that waterfront developments should not rise above 50m in height, while buildings will step up gradually, much like how seats are arranged in a theatre.

When the Urban Redevelopment Authority (URA) was tasked with the job of planning for Singapore’s future land needs, it was not just about dumping soil into the sea to create more land.

The bigger challenge was sculpting the skyline, making sure it looks picture perfect on every postcard and tourist snapshot.

Meticulous planning

Marina Bay is, undoubtedly, Singapore’s crown jewel – arguably the most ambitious and longest-in- planning development the Government has ever undertaken.

An enormous amount of contemplation, engineering and investments has been poured into this prime plot, which the public had a glimpse of when Prime Minister Lee Hsien Loong shared a fly-by video of it at his National Day Rally speech this year. In his rally speech in 2005, he gave a preview of the new Marina Bay, which was still at the drawing stage.

The Government has already pumped in $7.5 billion in infrastructure cost to make the land ready for investors, while total private investments tally up to $20.2 billion to date.

Around 24ha of land within Marina Bay has already been sold for development, including sites for One Raffles Quay, the Marina Bay Financial Centre and Marina Bay Sands.

It is where everyone will congregate and where everything will happen: the annual night-time Formula One race, New Year’s Eve countdown, National Day Parade, big-scale conventions, an upcoming casino, the new financial centre and the city’s highest luxury residential blocks.

With the bay’s most iconic development – integrated resort Marina Bay Sands – about to open for business in the first quarter of next year, anticipation and excitement are at an all-time high.

But it has taken more than 30 years to get to this point. At the beginning, there was nothing – not even land.

Land reclamation exercises from 1969 to 1992 produced about 370ha in the bay area and 80ha in Marina Centre, in anticipation of the nation’s economic growth and, with it, the extension of the Central Business District (CBD).

Unlike, say, Canary Wharf in East London, which was developed as a huge office and shopping precinct that is separate from the city’s traditional financial centre in The Square Mile, Marina Bay’s advantage is in its integration with the current financial district.

‘It is not the old downtown and the new downtown. Marina Bay is planned as a seamless extension of the existing CBD,’ said Mr Andrew Fassam, deputy director of URA’s urban planning department.

All new roads branch off from existing road networks at Raffles Place and Shenton Way.

Singapore’s urban planners also made a conscious decision to frame the bay, and ensure that the area would have a mix of uses where there would be life after dark – 24/7, in fact.

Another design principle was that it had to be a place for everyone and ‘not just the affluent’, said Mr Fassam.

So the Government decided to put in public-pleasing facilities: A 3.4km promenade linking the major public attractions like the Merlion, Esplanade – Theatres on the Bay and the upcoming ArtScience Museum; underground links lined with shops; and 100ha of land set aside for three waterfront gardens.

But it also decided to zone the area as a ‘white site’, which means that developers have the flexibility to build according to their vision.

When property tycoon Kwek Leng Beng bid for a plum piece of land fronting the bay, he had initially wanted the project to be half-commercial.

He later changed his mind and developed The Sail instead, two residential blocks towering at 63 and 70 storeys which saw no lack of takers, even though property analysts were initially sceptical and felt only that an office building would work on that site.

The URA also allotted larger parcels in the area so developers could build bigger buildings based on the needs of financial institutions, such as trading floors.

An upcoming development, Asia Square, is hoping to plug the gap for Grade A office space in town, especially those that have column-free floor plates.

When completed, the two towers will add 2 million sq ft of office space to the mix.

‘What clinched the deal for us was the availability of a huge parcel of land that could be developed into premium grade A+ office space, sitting in a prime location that is well-connected to the business hub,’ said project director Jeremy Choy.

The development’s parent company, Macquarie Global Property Advisors, bid more than $2 billion for the land.

The integrated development also houses a 280-room five-star hotel, and has space for retail and food and beverage, in addition to office space.

Mr Choy added that one of the critical deciding factors was the long-term plan for the area.

That the area was supported by the latest advances in infrastructure, like access to a district cooling system, also helped seal the deal.

Buildings in the area are served by common services tunnels which carry sewerage, water and telecommunication pipes typically buried under the road. These tunnels can be accessed without digging up the roads.

This is the first such network in South-east Asia.

The district also has its own cooling system, which makes for better economies of scale. In the pipeline is a centralised pneumatic refuse collection system that sucks all rubbish to one central location and saves the garbage truck from having to go door to door.

Even the greening of the area has been planned to a T. Planting plans include green, pink and yellow themes for different districts within the area. Coupled with this is a night lighting plan, which was originally designed for the Civic District but has since been extended to the CBD and Marina Bay.

Under the plan, buildings are required to be lit as part of the sale conditions, while the Government gives a cash grant to existing buildings around the bay to light up.

‘We can put good hardware in place, but that doesn’t mean that the place will be successful. The right software is important to make it come alive,’ acknowledged Mr Fassam.

So it went and wooed private investors by going to overseas fairs, some of which have translated into successful land sales.

Good long-term prospects

Likewise, the clincher for Marina Bay Sands has been the long-term prospects of the area and the growing exhibition and convention business, said its chief executive officer and president Thomas Arasi.

‘The company’s investment and commitment were based on the fact that Singapore has breadth and depth across all the major travel segments to make the integrated resort thrive. Few global gateways offer everything that Singapore can offer tourists from around the region and around the world,’ he said.

Over the years, the plan has been constantly refined – from when it first appeared as a concept plan in the 1970s, to 2000, when the first site was launched – which has since been developed into what is now One Raffles Quay.

At one point, Marina South was thrown up as a possible site for the Singapore Management University campus, but it was decided that the university should go back to where the schools traditionally were, in the Bras Basah area.

Marina South’s interim tenants have since all gone, and infrastructure works are taking place there now. That land had been sold on short-term leases of between 21 and 24 years after it was reclaimed. Those leases expired last year.

But the fervent development of Marina Bay as the new financial hub has also thrown up some concerns, among which is whether there will be an oversupply of office space, especially since the economy has been hit so badly.

The authorities do not seem worried.

Some office leasing agents have reportedly seen an increased number of leasing enquiries over the last quarter as rental rates became more competitive, and lease packages offered by landlords became more attractive, said URA.

And this could spur demand and help absorb some of the office space that is coming on stream.

Some developers have also continued to delay the completion of their projects, while a few others are considering converting existing office buildings in the CBD to residential use.

This would help regulate the supply of office space, they reason.

There has been quite a bit of international interest, said Mr Fassam, with investors asking when the next parcel will be released for sale.

But the authorities are in no hurry to open the floodgates and let buildings sprout.

After all, it has taken three decades for Marina Bay’s transformation, and it could well take another three decades to fill up the rest of the land.

Singapore’s eighth wonder

Source : Business Times – 7 Nov 2009

Faced with competition from regional countries also eyeing the benefits of the casino gaming industry, the two IRs cannot afford to be complacent

A FEW weeks ago, Singaporeans watched in awe the hoisting of a seven hundred tonne beam linking the towers of Marina Bay Sands (MBS) to form the Skypark – a vast rooftop garden, while at Sentosa, Resorts World Sentosa (RWS) was working on the finishing touches to the rides for its Universal Studios Theme Park.

Just how awesome these two integrated resorts (IRs) are is becoming more visible by the day. Together, they will cost in excess of $13 billion when they are complete. Not only will they be iconic attractions, but within five years they could bring in 17 million top quality tourists who will spend in excess of $30 billion and help create over 100,000 jobs, directly and indirectly.

Some sceptics wonder how Singapore’s IRs will be impacted by Macau. But there is unlikely to be much overlap; moreover, the market is big enough for both.

For the last 65 years, Macau has been basically a gambling colossus and will always be, even with top attractions such as The City of Dreams, Venetian and the MGM Grand. It is amazing that with a mere three licences issued to Stanley Ho’s Sociedade de Jogos de Macau Holdings, Sheldon Adelson’s Venetian and Steve Wynn’s Wynn resorts, Macau’s gambling scene has evolved into 32 casinos. Most visitors cannot tell which are the ones with the original licences and which are sub-licencees or concessions.

Even within new casinos, you will find junket rooms of up to 12 tables operating on a joint venture basis, such as Star Cruise’s Crockford Room and Putra Sampoerna’s Mansion House – both located at the MGM Grand. The Macanese, in conjunction with their Hong Kong associates, have reinvented the game of baccarat, which represents close to 70 per cent of each casino’s wagering.

Singapore’s IRs are setting their sights on total entertainment with great experiences in gaming, gourmet dining, shopping, meetings and exhibition activities, great accommodation and dazzling shows.

Junket operators who bring high-rollers into Macau have introduced ‘parallel betting’, under which the operators use the outcome of bets at the casino table, but accept side bets from their clients that are a multiple of the actual table bet.

This effectively reduces the 39 per cent gaming tax rate which the casino pays, while the bettor will be able to settle either way with the junket operator when they return to the mainland. Junket operators have also introduced insurance such as the blackjack game to baccarat, which ensures the bettor a guaranteed win if he has a high-point card before the house draws the third card.

Junket operators are critical to the survival of the gambling industry in Macau. They enable casino operators to pay less punitive taxes, assist the bulk of mainland Chinese to make settlements back home, thus overcoming currency restrictions and provide credit to players.

Notable junket operators such as Amax and Neptune, both listed Hong Kong entities, are supported by many casinos. They raked in close to $10 billion in gaming revenue in 2008. However, they are also facing strains – many are saddled with uncollectable debts, the Chinese government has been coming down hard on embezzlement and abuse by both Chinese officials and people in the private sector.

The practices that are rampant in Macau will not be found in Singapore’s two IRs. The Singapore authorities have carefully planned the entire operation and have anticipated many of the possible abuses. Most important of all, there will be no sub-licencees, which effectively reduces the policing area.

Singapore’s IRs are setting their sights on total entertainment with great experiences in gaming, gourmet dining, shopping, meetings and exhibition activities, great accommodation and dazzling shows. However, gaming will still be an important revenue source – up to 60 per cent. Singapore authorities must be careful not to derail this. Already, there are concerns about the admission levy for locals, the restrictions on ATMs and exclusion orders. People come into the gaming rooms of the IRs to have a great time. So our regulators must be practical in their enforcement.

Singapore’s superb infrastructure and security has already attracted many high net worth families to make this country their second home. MICE operators are also already taking bookings to hold meetings and exhibitions in Singapore.

London is a good example of how casinos helped attract many Arab families to relocate there when their second homes in Beirut were overrun by the civil war in the 1970s. Of course, casinos were not the only attraction: London, like Singapore, has some of the best private schools, medical facilities and shopping. But for high net worth individuals, its casinos were an important part of its entertainment value. More than 5,000 high net worth families from Beirut and elsewhere in the Middle East moved to London during the late 1970s, causing a mini boom in the markets for housing and top-end services.

Today, many wealthy foreigners are choosing to spend time in Singapore – as evidenced by the notable levels of purchases of property by foreigners in recent years. With the opening of the IRs, it is likely that demand for high-end accommodation will increase further.

While the initial novelty and stunning attractions of Singapore’s IRs could bring in considerable tax revenues as well as tourist dollars, Singapore cannot afford to be complacent. Other governments in the region are also eyeing the benefits of the casino gaming industry. Taiwan will soon approve casinos in Penghu Island. Tokyo is about to announce an IR at Odaiba in Tokyo Bay.

The Philippines is in the midst of building a massive IR in Manila Bay and soon, we may witness the legalising of illegal casinos in Vietnam, Cambodia and Laos. It may not be long before Thailand and Indonesia (Bintan) too approve licences for gaming operations within their jurisdictions. There are already no less than five casino ships trawling international waters around Singapore, drawing large numbers of patrons.

In the face of such competition, it will be a constant challenge for Singapore’s IRs to keep reinventing themselves to draw in high-rollers from around the world and keep their attractions compelling to tourists.

By Ronald Tan, a casino gaming consultant who has been associated with the industry since the 1970s

More brands at Marina Bay IR

Source : Business Times – 26 Sep 2009

MARINA Bay Sands (MBS) yesterday announced more luxury brands that plan to take up space at the integrated resort – such as Louis Vuitton, Gucci, Prada and Yves Saint Laurent.

Right now, close to 80 per cent of shops at the MBS integrated resort have been let. The US$4.5 billion resort, which is set to open next year, has about 300 shops and 800,000-plus square feet of retail and restaurant space. About half of the retail space will be up and running when the first phase of the project opens in Q1 2010.

New retailers unveiled yesterday include Bottega Veneta, Bulgari, Burberry, Miu Miu, Omega and Patek Philippe. They join names such as Chanel and Tiffany & Co, which have said earlier that they are taking up space at the Marina Bay Sands Shoppes.

Louis Vuitton plans to open a unique ‘island’ store that will ‘float’ on the water in front of the resort, which is expected to be a highlight. The store will be a striking glass-and-steel crystal pavilion that will sit on the waters of Marina Bay, MBS said.

‘This unique Louis Vuitton store at Marina Bay Sands speaks volumes about the visibility and credibility we have established in the retail community,’ said David Sylvester, vice-president of retail for Asia at US-based Las Vegas Sands, which is developing the resort.

‘Retailers recognise the quality of Marina Bay Sands which will attract high-level visitors from Singapore and beyond because of our winning combination of luxury brands, celebrity chef restaurants, a luxury hotel, a casino, expo and convention facilities, and world-class entertainment under one roof.’

Marina Bay retailers belt up for a rough ride

Source : Business Times – 22 Sep 2009

But shorter road closures will lessen damage, they say

Retailers are bracing themselves for a rough ride when road closures kick in to facilitate the setting up and dismantling of race infrastructure for the 2009 Formula 1 (F1) Singapore Grand Prix.

While the road closures at the Marina Bay area have been whittled down from 12 days to seven this year – from midnight on Sept 23 until Sept 29 – retailers in the area are already battling weak consumer sentiment and competition from new kids on the block such as Ion Orchard and Orchard Central.

‘The Marina Bay precinct such as Suntec City and Marina Square are already facing a decline in traffic as consumers are drawn to the new malls on Orchard Road,’ said a spokesperson for Wing Tai Retail, whose portfolio includes G2000 and Topshop.

Not to mention the fact that ticket inventory for this year’s F1 race stands at 83,000, which suggests a smaller captive audience trawling the area over the race weekend (Sept 25-27) compared to the 100,000 strong crowd last year.

Race promoter Singapore GP has also said that, unlike the inaugural race, it does not expect a sell-out crowd this year.

‘Coupled with the weak economic and consumer sentiments, we foresee the F1 closure this year to impact business more severely, despite a shorter closure period,’ added Wing Tai.

‘During the closure, you will see a dip for sure,’ said Joyce Lee, assistant vice-president (communications) for food and beverage group Apex-Pal International which owns brands such as Sakae Sushi.

Last year, its Hibiki restaurant at the Singapore Flyer saw sales take a hit of more than 50 per cent.

‘We’ve actually had a lot of enquiries from customers who want to come and dine at Hibiki during the race weekend this year,’ Ms Lee added. However, the restaurant will have to turn these prospective patrons away, since access to the Flyer is limited to Zone 1 and Zone 2 F1 ticket holders during the race weekend. This will no doubt prove to be an additional burden, since the Flyer was open to all race-goers during the inaugural race.

Lifestyle group RSH – whose brands include Mango, Zara and Massimo Dutti – expects poorer sales within the circuit to be offset by a stronger performance in some of its other outlets.

‘Although our Orchard Road stores may experience some increase in footfall, our stores located within the F1 circuit are expected to be adversely impacted by the road closures. We do not expect to see any significant gain in sales during the F1,’ said a spokesperson for RSH.

Still, retailers reckon that the shorter span of road closures will definitely help mitigate some of the damage.

‘We hope it (sales) will be good,’ said Tan Yew Kiat, general manager of home-grown fashion chain Bysi.

Others, such as general manager for Oris Singapore, Paul Phua, are hopeful that consumers will now know from experience that the Marina Bay area remains open for business.

‘For the first race, people were not clear logistics-wise. Other areas like Orchard definitely benefited,’ he said.

And armed with last year’s experience, industry players are pulling out the stops to shift sales into overdrive.

Oris ambassador and AT&T Williams F1 driver Nico Rosberg will make an appearance at a private event hosted by Oris today. Oris has also set up a road-show at Raffles City to drum up awareness.

Wing Tai Retail will take 15 per cent off regular-priced items for race goers who shop at its Topshop, Dorothy Perkins and Warehouse stores, while The Sunglasses Hut is offering 15 per cent off to any F1 ticket holders who purchase sunglasses from its store at the Flyer.

‘Last year, there was an impact on sales the week before and the week after the race because people were not coming in,’ said Alice Lim, regional manager for Sunglasses Hut at the Flyer.

On the other hand, the store did see sales pick up during the three race days and Ms Lim is banking on sales spiking again during the three-day race weekend.

Battle of the views over Marina Bay

Source : Straits Times – 14th Sep 2009

THE public observation deck perched atop the three hotel towers of the Marina Bay Sands (MBS) could well give the Singapore Flyer a run for its money by the middle of next year.

The 66.5m-long platform, to offer what the integrated resort has described as ’spectacular views of Singapore’s city skyline’, is 200m above the ground.

This means it will tower over the 165m-tall Flyer, the world’s tallest observation wheel.

The observation deck, to be rimmed by a 2m-high glass barrier all around, will allow visitors to get right up to the edge.

The only section of the 340m-long SkyPark open to the public, it will house a cafe or restaurant offering casual dining options.

The deck can take up to 900 people. It is not yet clear whether MBS will levy an admission charge to get up there, and how much this will be.

At a briefing last week, MBS general manager George Tanasijevich said discussions were still going on about how to manage the flow of people, and whether tickets to the attraction should be sold.

But one thing is certain, he said, and this was that the deck’s 360-degree view would be a crowd-puller among Singaporeans and tourists.

The year-old Flyer across the highway, widely expected to be a key attraction, has not fared too well. It has not managed to attract even half the number of projected visitors in a year, noted a recent shareholders’ report.

Talk is rife in the travel trade that the Flyer and MBS’ deck could go head-to-head for visitors, said the general manager of in-bound travel agent City DMC, Ms Wendy Leong.

But she, along with Mr Aaron Hung, who teaches world travel and tourism at the Singapore Management University, believes healthy competition will give visitors choices.

Mr Hung pointed out, however, that it will be down to a choice between two experiences – that of being in a pod-like observation module and an immersive viewing environment.

It is ‘technological marvel versus service ambience’, he said.

Ms Alicia Seah, spokesman for CTC Holidays, predicted that MBS may have the upper hand because visitors can come and go when they like, unlike the Flyer, which ‘traps’ visitors for the 30-minute duration of the ride.

She added that if the deck does charge an entry fee, it would probably be cheaper than the $29.50 minimum fare for an adult on the Flyer. This would add to the appeal of MBS’ observation deck.

Asked if the deck will draw away its visitors, a Singapore Flyer spokesman said there was no direct competition because both attractions offered ‘entirely different experiences’.

Ultimately, the experience offered will be the key to whether either attraction can become popular, said Ms Ng Lee Li, a lecturer at Tourism Academy @ Sentosa.

She gave the analogy of a beach holiday, in which a pristine beach is not the only factor driving one to head there.

The view, the environment and the totality of the experience matter as well.

‘While fantastic hardware – views included – can make a place attractive, it is often the heartware that makes a place alluring and memorable,’ she said.

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Other top spots for a city view

~ Pan Pacific Singapore’s Hai Tien Lo Cantonese restaurant on level 37.
~ Swissotel Stamford’s Equinox Restaurant or New Asia Bar on level 71.
~ Sentosa’s Tiger Sky Tower.
~ National Library’s The Pod on level 16 (for events and functions only).
~ The China Club Singapore on level 52 of the Capital Tower (members’ only club).

Signs of speculation in private property market

Posted by luxuryasiahome on July 29, 2009

The government is seeing some signs of speculation in the Singapore property market, according to National Development Minister Mah Bow Tan.

Speaking on the sidelines of the topping out ceremony of the Marina Bay Financial Centre on Wednesday morning, Mr Mah said the government is monitoring the situation.

It is uncertain if the buying momentum seen in recent months can be sustained, he added.

“The forecast is still for negative growth this year. Although it’s not as negative as it was in the beginning of the year, I think there is still uncertainty… But what is important really is for all of us, all the players in the market, to make sure that the market remains healthy,” said Mr Mah.

According to latest data from the Urban Redevelopment Authority (URA), sales of uncompleted private homes reached a record high of 1,825 units in June as improving sentiment in the market spurred homebuyers to snap up more units.

Mr Mah assured that there is adequate supply of units in the market for now and the government is prepared to release more land for sale if necessary.

On the Marina Bay Financial Centre, Mr Mah noted that it has already attracted over S$20 billion of private real estate investments from both local and international investors. About 61 per cent of space in the centre has been pre-leased.

Mr Mah also reiterated the government’s commitment to the project, saying another S$1 billion in infrastructure works will be invested over the next 10 to 15 years. The figure is on top of the S$7.5 billion already invested in Marina Bay.

Marina Bay IR delay ‘no surprise’

Source : Straits Times – 10 Jul 2009

TOURISM players say the signs that there would be a delay in the opening of the Marina Bay Sands integrated resort (IR) were visible: Construction at the site was proceeding slower than it should have been.

They said the fact that work had not started on its 1.2ha rooftop garden – which has to be lifted 200m into place – with less than half a year left to the opening was a massive hurdle to overcome.

Said CIMB-GK economist Song Seng Wun: ‘Anyone who has driven by could have seen it’s impossible.’

Mr Song and others, however, said the delayed opening would not have much of an impact, given the sorry state of the industry right now.

This year has been a write-off as far as tourism arrivals are concerned, they said, and whatever boost a year-end opening of the IR would have given would have been minimal.

Las Vegas Sands’ chairman and chief executive officer Sheldon Adelson said on Wednesday that the IR’s opening would be pushed back to January or February.

The admission came after months of assurances by Marina Bay Sands’ other executives that the 2,600-room casino-resort would open by the year end, as scheduled.

But while industry observers and agents contacted by The Straits Times say they saw a delay coming, they said the explanation given for it – that there was a shortage of materials and labour – was puzzling.

The Building and Construction Authority, for example, said it had not received any feedback from the industry about a shortage of raw materials.

Whatever the reasons for the delay, experts said there were several reasons why it mattered little.

Singapore Management University’s adjunct lecturer for world travel and tourism, Mr Aaron Hung, said the state of the world economy meant few people were ready to travel anyway.

Others said the year-end period was a slow one for business travellers – Marina Bay Sands’ target group – so the IR would not lose out either.

CTC Holidays spokesman Alicia Seah said that most travellers at the end of the year are leisure tourists who are less interested in the facilities for meetings, incentives, conventions and exhibitions that the resort would offer.

CIMB-GK’s Mr Song went a little further and suggested that the delay might be a blessing in disguise.

By next year, he said, things will pick up in the industry, and back-to-back openings by the Sands resort and the other IR, Resorts World at Sentosa, would create a ‘Big Bang’ effect.

He added that a delay of a few months ‘does not really mean much in terms of the long-term strategy of developing the meetings and conventions market or providing Singapore economic growth’.

Asked about the impact of the delay yesterday, Senior Minister of State for Trade and Industry S.Iswaran would only say that tourism has been hit by the slump like other industries, and that the spread of H1N1 flu ’sort of exacerbated that some’.

He added that the Singapore Tourism Board (STB) and other government agencies were in talks with the IR over the matter and ‘we expect to have a good outcome’.

Neither he nor STB would be drawn into details of the discussions, such as whether a penalty will be imposed for the delay.

STB spokesman Muhammad Rostam Umar said: ‘For Singapore, it is important that the developers maintain the integrity of the concept of an integrated resort as envisaged, to fulfil the objective of enhancing Singapore’s tourism appeal.’

However, not everyone agreed that the postponement means little.

Gaming analyst Jonathan Galaviz, for instance, felt that the impact would be keenly felt. Having a mega-attraction open during the downturn, he said, would be a shot in the arm for the country, and would send an important signal that plans are going ahead despite the stormy weather.

He added: ‘Every day that one of the IRs is not fully open is another day that the country is not receiving sorely needed tourism revenue and visitation.’

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.

Marina Bay Sands opening delayed to 2010

Source : Business Times – 9 Jul 2009

LAS VEGAS Sands (LVS) will launch its Marina Bay Sands (MBS) integrated resort later than expected, with doors opening in January or February instead of at end-2009.

Early-2010 will also be when LVS is likely to re-start construction work on stalled sites in Macau, as financing is expected to be ’settled’ by September, LVS chairman and CEO Sheldon Adelson said yesterday.

In town for a ceremony to mark the topping out of three 55-storey hotel towers at MBS, Mr Adelson said that depending on future market conditions, LVS could sell non-core assets at MBS, such as the retail mall, and use the cash to repay loans.

His comments on non-core assets were in response to questions on whether LVS might float MBS here.

There are no plans for an IPO of Singapore assets. But in Macau – where LVS owns several casino resorts, including the Venetian Macau – Mr Adelson said that LVS is ‘actively and seriously’ looking at several options to secure funding for its stalled Macau projects.

These include an IPO on the Hong Kong stock exchange of its Macau properties, which could raise US$3 billion – US$4 billion.

However, Mr Adelson said that LVS is also considering new equity partners and selling non-core assets in Macau, including retail malls and condominiums.

LVS announced late last year that it would suspend the development of Sites 5 and 6 on Macau’s Cotai Strip due to the global credit crunch, and focus on completing MBS instead.

Financing for MBS is secured.

One reason for the delay in opening MBS is said to be the complex structure of the Sands SkyPark, an aerial park that will link and crown the three hotel towers. As such, MBS is likely to open in phases, Mr Adelson said. But the phases are not likely to be far apart, he added.

Building conditions have not always been favourable, he explained.

‘We can’t control the flow of sand to make concrete. We can’t control the availability of steel. And we can’t control the availability of labour due to other projects that are in the market.’

The first attractions to open will be key revenue drivers – including the casino, which is at an advanced stage of construction.

No events are expected before April 1 for the meetings, incentives, conventions and exhibition (Mice) facilities.

However, Mr Adelson, a Mice veteran, said that MBS is negotiating about 150 Mice events contracts – most of them new to Singapore.

The hotels will also be a key component of MBS, with about 2,600 rooms and suites in total. While the number of rooms is lower than the projected 3,000 when LVS won the public tender to build the IR in 2006. Mr Adelson said that MBS will be ‘pushing business to other hotels’.

MBS has been in discussions with other hoteliers in the area, he revealed. Some had feared MBS would wage a price war to attract customers. Mr Adelson said that MBS wanted to assure other players it would not do this.

On the contrary, he said ‘we will be pushing up room rates’, because MBS will offer something unique.

Marina Bay IR opening pushed back

Source : Straits Times – 9 Jul 2009

THE Marina Bay Sands (MBS) integrated resort will open in January or February, and not the end of this year as previously announced.

News of the delay came from the top yesterday: Las Vegas Sands (LVS) chairman and chief executive officer Sheldon Adelson.

In a ceremony to mark a construction milestone – building has reached the top of the 55-storey hotel blocks – Mr Adelson said the opening had been put back because of a shortage of manpower and materials.

As recently as March, MBS’ head honchos, including the IR’s president Nigel Roberts, said they were confident the US$5.4 billion (S$7.8 billion) project was ‘on track for a soft opening by end of the year’.

Yesterday, however, Mr Adelson admitted to difficulties in completing the project.

He said: ‘We can’t control the flow of sand to make concrete with, we can’t control the availability of steel…and we can’t control the availability of labour due to other projects that are in the market.’

Financing was not an issue, although Mr Adelson said several times yesterday that the Singapore project was very expensive.

But industry insiders told The Straits Times that part of MBS’ problem is that, as a foreign company with little local or regional contacts, it has had no choice but to fork out top-dollar for materials.

Despite the setback and current economic conditions, the casino baron remains very bullish on the potential of the IR. He said he had every expectation that it would help Singapore achieve its 2015 tourism target of 17 million visitors spending $30 billion.

In updating MBS’ timeline for opening yesterday, Mr Adelson said that at least 50 per cent of the resort – including some hotel rooms, the restaurants, casino and much of the meetings and conventions facilities – will be ready for a ’soft opening’ early next year. The rest of the IR will be up and running two to three months after, he said.

Giving an update on the construction of the resort, LVS president and chief operating officer Michael Leven said yesterday that engineers were expected to begin work on the iconic sky park next month.

Lifting the various pieces of the park – some as heavy as 500 tonnes – to the top of the three hotel blocks, which are 200m above ground, will take some 90 days, he said.

Though delayed, Marina Bay Sands – the first IR project awarded here – will be fully operational before its Sentosa counterpart.

Resorts World at Sentosa, which was awarded the bid for the second IR six months after MBS, said last month that it was on track to open some 60per cent of its facilities next year. These include three hotels, the casino, the Universal Studios theme park and a retail and dining strip.

The rest of its attractions, such as the oceanarium, marine museum and two more hotels, will take up to another year or so to complete.

Both IRs are racing to open before Chinese New Year, which falls on Feb 14 next year.

Asked about the possibility of a dogfight to attract visitors, Mr Leven said there was no need for concern, as the two IRs are targeting different market segments.

He said the Sentosa IR is gunning for families and leisure tourists, whereas Marina Bay Sands is eyeing business travellers.

Asked about LVS’ finances, Mr Adelson said things had improved significantly on the casino front since its auditors raised concerns last November about the company’s ability to continue operating. He is confident the global economy has hit bottom.

‘We may be in the down portion now, we can look forward to when it goes back up,’ he said.

The company is looking to restart its stalled Macau casino before the year ends. Work on its Cotai Strip project was suspended last year to concentrate on the Singapore project.