Marina Bay Sands (MBS), the integrated resort cum casino and a bellwether of Singapore’s tourism industry, is turning the table on the Covid-19 pandemic. In its recently released 1QFY2022 ended March results, owner Las Vegas Sands, reported ebitda rose to US$58 million ($81 million) in March from US$17 million in February, showing clear m-o-m growth.
The quick rebound was chiefly due to a release of global pent-up demand for travel given that the shutting of borders and grounding of flights were among the first emergency responses by governments when Covid-19 struck and spread quickly.
For two long years, safe for the most essential travel, most people were stuck at home and indulged their wanderlust by swiping through photos on CN Traveller.
However, with the gradual opening of national borders and the lifting of testing requirements for inbound tourists who are vaccinated, many have cast aside all fear to hop on the next flight out of the country.
“We have survived! The light at the end of the tunnel is real and getting bigger,” says Keith Tan, chief executive of the Singapore Tourism Board (STB), in his April 6 speech at the Tourism Industry Conference 2022. Tan also expects the tourism sector to recover strongly as it benefits from the upcoming influx of tourists over the next few years.
During the pandemic, the government tried its best to support workers and businesses in the tourism sector. Workers in the aviation, hospitality, retail and F&B industries who had lost their jobs were retrained as safe-distancing ambassadors or preschool teachers while hotels were converted into quarantine facilities and restaurants and shops were given a rent holiday so that they could survive and fight another day.
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With the reopening, STB has launched overseas campaigns to attract tourists to the Lion City and also rolled out a new incentive programme for visitors. “We want to delight our visitors with ‘hidden gem’ surprises so that they experience more of Singapore in an unexpected way,” says Tan.
Although more details will be announced at a later date, Tan says the programme is designed to make Singapore stand out from the competition through the development of more unique and unusual experiences for both new and repeat visitors.
While Tan notes that the reopening is a reprieve for many businesses, challenges such as the lack of manpower remain. However, he says STB is trying to mitigate the problem. Although the reopening of Singapore’s land border with Malaysia should provide more workers, STB is working with NTUC and Workforce Singapore to set up Tourism Careers Hub, a facility to work with the tripartite partners to extend endto-end job facilitation, training and support for the workforce.
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Tan says the tourism sector will also undergo a digital transformation with the recent launch of the Tourism Technology Transformation Cube (Tcube) and the implementation of Extended Reality (XR) — a combination of augmented, mixed and virtual reality — in tourist attractions to create a more encompassing and enriching visitor experience.
In an email interview with The Edge Singapore, a spokesperson from MBS says, “The easing of social-distancing measures and the resumption of international travel heralds a renewal of confidence in Singapore’s ability to effectively manage and transition to living with Covid-19. The country’s calibrated approach towards the reopening of its borders is great news for the tourism industry.”
MBS has also been preparing itself for the eventual full return of international travel, by examining every aspect of its operations and offering a renewed hospitality experience.
In the past two years, MBS had taken the opportunity to adopt technology in key areas with more investments being committed to automating processes and boosting efficiency. Today, contactless payments are a norm, while guests can checkout digitally.
During the pandemic which saw a fall in footfalls and tourist receipts, MBS took the opportunity to go through an extensive upgrading. Its US$1 billion reinvestment programme, the biggest since its opening in 2010, will not only see the upgrading of all its hotel rooms in Towers 1 and 2 but will also introduce new signature experiences across the 55th floor of all three hotel towers, including a revamped Executive Club Lounge, new premium fine-dining experiences, and health and wellness offerings.
“The reinvestment programme is a testament to our confidence in Singapore and ongoing commitment to the country’s tourism industry. It also allows us to capitalise on the increase in demand for luxurious and experiential travels, which is predicted to lead the tourism recovery,” says the MBS spokesperson.
Apart from preparing its entertainment and leisure venues for tourists, MBS is also preparing its expo and event spaces for larger gatherings to take place as Singapore seeks to lift its social management measures and allow over 1,000 participants in a space or 75% of the venue’s capacity.
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Large-scale meetings and conferences are back at MBS. It has recently welcomed the return of the physical biennale event, Singapore International Water Week (SIWW 2022) which was held alongside CleanEnviro Summit Singapore. With an expected attendance of 15,000 delegates for both events, they were one of the largest MICE events to be held in Singapore. SIWW also saw the participation of many international delegates, including those from 17 countries.
As MBS prepares itself to welcome overseas tourists for both leisure and business once again, it has not forgotten about local visitors. Some upcoming events that will be revived after a two-year hiatus include the famed i Light Singapore, organised by the Urban Redevelopment Authority (URA).
With these plans, Las Vegas Sands sees MBS’s nascent growth momentum to continue into April. The casino operator expects the property to return to US$1 billion ebitda run-rate by end 2022 on the back of the Vaccinated Travel Framework which will replace VTLs from April 1 and provides quarantine-free entry to Singapore for all vaccinated travellers.
Elsewhere at Sentosa
Resort World Sentosa (RWS), now held under Genting Singapore, is the other bellwether of the Singapore tourism industry. Like MBS, it too offers a wide spectrum of attractions such as Universal Studios Singapore (USS) and RWS Casino.
Covid-19 was a big blow to RWS too. Back in July 2020, RWS reportedly retrenched around 2,000 workers out of its then headcount of around 7,000.
Edward Chew, senior vice-president of sales and marketing for RWS, explains that during the pandemic period, RWS’s offerings were more focused on drawing local visitors as it curated offerings such as staycation packages and dining experiences.
But with the reopening and lifting of travel restrictions, there is now a ray of hope. RWS is preparing itself to wow the tourists expected to come flooding back soon with an experiential holiday by adding new programmes at USS and SEA Aquarium as well as several resort-wide retreat packages.
As announced in February, construction for RWS 2.0 had started on time in 2Q2022. This begins with the addition of a new Minion Land at USS and the expansion of SEA Aquarium to become the Singapore Oceanarium, an institution dedicated to championing marine education and the protection of the environment. Both Minion Land and the Singapore Oceanarium are expected to be completed by 2024.
RWS will also be refurbishing three of its hotels — Hard Rock Hotel Singapore, Hotel Michael and Festive Hotel — as it has received suggestions from visitors to incorporate social network elements.
Resorts World Convention Centre will also be refreshed to strengthen RWS’s position as a leading business destination to meet future MICE events.
“Our new offerings will accelerate our pivot towards curating exclusive premium experiences that our guests desire. At the same time, we are more targeted in our marketing and sales distribution, recognising the evolving expectations of our various audience segments, as well as the latest post-pandemic travel trends,” says Chew.
When RWS 2.0 is completed, it will have an eco-system of differentiated bleisure (business and leisure) experiences for business travellers too, anchored by a strong calendar of leading MICE events, adds Chew.
In its latest 1QFY2022 ended March, Genting Singapore saw net profit after tax (NPAT) grow by 17% y-o-y to $40.4 million while revenue increased by 13% y-o-y to $314.5 million, led by growth across all of the group’s segments.
Genting Singapore says it remains “cautiously optimistic” about its recovery as Singapore reopens its borders. Although footfall has increased in RWS, Genting Singapore expects the pace of recovery in leisure travel to be moderated by limited flight schedules, high airfares and ongoing travel restrictions on visitors from certain countries.
Nevertheless, analysts are upbeat about Genting Singapore and its near-term prospects. DBS Group Research is keeping a “buy” on Genting Singapore with a target price of $1.00 as the group’s strong performance over the past few quarters demonstrated the resilience of domestic gaming demand. Analyst Jason Sum expects the group to register core ebitda (excluding exceptional gains from the Job Support Scheme) of $75–$100 million quarterly in the absence of tourists.
Currently, Genting Singapore is trading at an “undemanding valuation” of 10.1x FY21 EV/ebitda, which is about 0.2 standard deviations (SD) above its five-year average. Sum sees this as reasonable considering its swift ebitda recovery trajectory. The stock is also trading at a significant discount to the regional sector average of 31.3x.
Photo: The Edge Singapore/ Albert Chua
