Tourists wanting to float in an infinity pool 57 stories in the sky are paying the most ever to stay at Singapore’s Marina Bay Sands. The hotel’s owner would rather they spend their holiday at a roulette table downstairs.
Even as room rates at Las Vegas Sands Corp. (LVS)’s Singapore resort surged to a record $468 a night last quarter, more than double the average in the city-state, earnings declined. The taste for luxury accommodation didn’t extend to the casino floor, where high-stakes gaming revenue slumped 34 percent from a year earlier.
“We didn’t come here for the casino,” German tourist Raik Wernicke said last week as he and his family waited for a bus to take them from Marina Bay Sands to Singapore’s zoo. “We booked this hotel because of the infinity pool at the sky deck that offers a magnificent view of the city. This is our first visit to Singapore so we’re seeing the sights, enjoying the food and doing some shopping.”
More European, Canadian and South Korean tourists aren’t offsetting a slump in visitors from China, whose citizens are estimated to account for half of the city-state’s VIP gambling. Singapore’s woes are mirrored in Macau, Asia’s gaming hub, where casino spending plunged in October by the most since at least 2005 as China’s campaign against corruption prompted gamblers to cut back on lavish spending.
Photographer: Sam Kang Li/Bloomberg
Hotel guests in the infinity pool at the Sky Deck atop Marina Bay Sands look out… Read More
Singapore tourist arrivals fell 3.3 percent to 10.3 million in the eight months through August from a year earlier, according to data from the tourism board. Shares of Las Vegas Sands, controlled by billionaire Sheldon Adelson, fell 24 percent this year through yesterday, while Genting (GENS) Singapore Plc, which operates the Southeast Asian city’s other casino, fell 29 percent to lead declines on the benchmark Straits Times Index. (FSSTI)
Genting Slumps
Genting slumped 2.8 percent at the close in Singapore, today, its biggest decline in seven weeks. Shares are falling as the drop in Marina Bay Sands’s revenue from high rollers, along with the plunge in Macau’s gaming revenue last month, highlight the weakening casino business, said Carey Wong, an analyst at OCBC Investment Research in Singapore.
“The market is worried about Genting’s upcoming results, especially the rising accounts receivables,” Wong said. Genting said in August that it had written off S$81.6 million ($63.3 million) in accounts receivables in the second quarter, compared with S$31.95 million a year ago
Celebrity Chefs
Lonely Planet named Singapore its top country destination for 2015, citing the “boat-shaped” Marina Bay Sands complex as a drawcard. As well as the infinity pool, tourists can dine at restaurants run by celebrity chefs including Wolfgang Puck and Tetsuya Wakuda, and shop at the 800,000 square-foot mall across the street that boasts luxury brands and an indoor canal complete with gondolas-for-hire, and watch performances such as “Lion King” at two theaters that can accommodate as many as 2,155 guests.
Such attractions helped to make the Singapore property the busiest and most expensive among Las Vegas Sands’s hotels. Occupancy at the 2,561-room Marina Bay Sands sat at 99.4 percent in the third quarter, compared with 92.6 percent for the gaming company’s hotels in Macau and 91.9 percent in Las Vegas. It’s also higher than Singapore’s average occupancy of 86.1 percent in the first eight months.
Big Spenders
Even with the hotel almost full, Marina Bay Sands posted adjusted earnings before interest, tax, depreciation and amortization of $351.7 million last quarter, a 5.9 percent drop from a year earlier.
“They’re probably not getting big casino spenders into their hotels these days,” Alan Richardson, an investment manager at Samsung Asset Management Co. in Hong Kong. “The gaming revenue normally comes from Chinese tourists and we have seen a decline in visitors from China.”
Travelers from the world’s most populous nation, Singapore’s biggest source of tourists after Indonesia, plunged 29 percent in the eight months through August, according to official data. President Xi Jinping is cracking down on corruption and spending by officials, while the disappearance of a Malaysia Airlines’s plane bound for Beijing in March spurred Chinese holidaymakers to choose destinations other than Southeast Asia.
Genting’s Profit
Marina Bay Sands spokeswoman Gayathri Ramasamy declined to comment when asked how many of its guests visit the casino. Lee Sin Yee, spokeswoman for Genting’s Resorts World Sentosa, declined to comment pending the release of quarterly results on Nov. 11.
Genting is expected to post third-quarter net income of S$138.8 million ($107.7 million), according to the average estimate of five analysts in a Bloomberg survey, down from S$193 million a year earlier.
Genting is likely to report a steep decline in VIP gaming revenue, according to an Oct. 16 report by Macquarie Group Ltd. Casino revenue from highrollers at Marina Bay Sands dropped 34 percent to $9.1 billion in the third quarter, Las Vegas Sands said last month.
With a full house at Marina Bay Sands, that means visitors such as South Korean engineer Jeong Hoon Moon can only see the famous infinity pool from the observation deck.
“We wanted to stay in this hotel because it’s a Singapore landmark, but we were told there are no available rooms,” he said on Oct. 30, dragging his luggage. “We’ll just go up the sky park and then head out to a nearby hotel.”
