Marina Bay Sands is doubling its commitment to Singapore, betting on a strong recovery.
In a private chat with Muhammad Cohen, Chief Operating Officer Paul Town stated that the famous Las Vegas Sands property Marina Bay Sands shares a common objective with the city-state of Singapore.
From the peak of its global integrated resort business, the future appears promising, with revenue bouncing back and new growth on the horizon. This is the perspective from Paul Town, Chief Operating Officer of Marina Bay Sands, from his newly renovated suite in one of Singapore’s three towering 55-story structures.
“We’re observing a robust recovery, for sure. The hotel is full for the most part, the restaurants are bustling, pretty much everything is. We’re seeing customers return to entertainment and we’re starting to have our first performances in the theater. So, it’s fantastic,” Town stated in a private interview with ICE365. “We’ve benefited from Singapore and the government taking very proactive and cautious actions during the pandemic.”
Within the regional trends, Singapore authorities have taken steps to limit Marina Bay Sands’ (MBS) (pre-pandemic) industry-leading profits.
Despite this, owner Las Vegas Sands is still investing over $4 billion (GBP 3.7 billion/EUR 4.1 billion) into the 12-year-old modern Singapore landmark, including an additional $1 billion earlier this year.
The city dweller, who spent a significant portion of his formative years in Singapore, has identified a common objective among the integrated resort, the government, and the broader community.
If the recovery wasn’t apparent in the gaming halls of the $5.6 billion integrated resort, the 2,200 hotel rooms, the 800,000 square feet of luxury retail (which David Lepo, head of the Football Betting Network, describes as “a super-charged Rodeo Drive”), and the rooftop infinity pool that has been showcased in the film “Crazy Rich Asians” and countless social media posts, then it wouldn’t be of consequence.
“We’ve reached a point where our clientele and source markets hold a very favorable view of visiting Singapore. They perceive Singapore as exceptionally safe. They also recognize that from an integrated resort standpoint, our hotels currently rank among the top globally, while other regions are somewhat restricted,” the city dweller stated. He joined Marina Bay Sands in October 2019 as Senior Vice President of Resort Operations and was promoted to Chief Operating Officer in June 2021 under General Manager George Tanasijevich.
The city dweller’s casino resort experience encompasses Crown Melbourne and eight years in Macau, initially with MGM (then in partnership with Crown) and subsequently with Galaxy.
Marina Bay Sands’ second-quarter financial results validate the city dweller’s assertions. Revenue reached $679 million, of which $500 million originated from gambling, and EBITDA amounted to $319 million. This represents nearly double the figures from the second quarter of 2019, which were $688 million, $468 million, and $346 million, respectively. Hotel occupancy attained 93.9% from April to June 2022, a slight decrease from 97.2% in 2019.
Marina Bay Sands achieved these outcomes while Singapores …
Singapores tourist figures hit 96 million in August, a bit over a fourth of the 2019 mark. Air travel capacity is still below pre-pandemic levels, but both differences are closing.
Town, the head of Marina Bay Sands, stated the hotel’s rebound started in the final quarter of last year. “But the real change occurred in April and May of this year, when the last truly limiting regulations were lifted.” Border restrictions have loosened as Singapore removed testing and isolation requirements for inoculated travelers and allowed unvaccinated visitors to enter with a negative COVID-19 test outcome. In late August, Singapore dropped most remaining face covering rules and no longer required visitors to install a monitoring application on their phones.
While arrivals are increasing, “the visitor makeup has changed considerably,” Town noted. The Greater China market has shrunk considerably: before July 2019, visitors from Greater China totaled 2.8 million, making up 25% of Singapores tourists, while this year the number is 297,000.
Southeast Asian Market
Before the pandemic, Greater China contributed about a quarter to a third of Marina Bay Sands’ business, with local and surrounding Southeast Asian markets accounting for roughly the same portion.
“If we look at the area, Indonesia and Malaysia are currently sending a large number of visitors to Singapore, and we’re definitely profiting from that.”
Observing these nations, they certainly experience a significant amount of internal travel, but Singapore has consistently been a favored destination for individuals from Jakarta, Johor Bahru, Kuala Lumpur, and other locations.
Thune recognized that the competitive landscape in the Southeast Asian marketplace is becoming more intense with the emergence of integrated resorts throughout the region, encompassing potential new destinations such as Japan and Thailand. “I believe this is a positive development, as a greater number of patrons engaging in the global integrated resort experience will contribute to our success.”
The local market plays a pivotal role in the prosperity of Marina Bay Sands, particularly during the pandemic. In the second quarter of 2021, when inbound tourism had not fully resumed but local restrictions had been relaxed, Marina Bay Sands generated $327 million in revenue, representing 48% of its 2019 revenue, including $223 million in gaming revenue, which aligns with that proportion, despite the fact that Singaporean citizens and permanent residents are obligated to pay a S$150 ($104/€109) per day/S$3,000 per year gaming entry tax at each gaming establishment, along with stringent prohibitions on gaming promotions.
Singapore’s other integrated resort, Genting Group’s Resorts World Sentosa, declined to participate in this analysis. The resort recently recruited Andrew Macdonald, the former chief gaming officer of Marina Bay Sands and Las Vegas Sands, in an endeavor to bridge the longstanding revenue disparity between itself and Marina Bay Sands.
“The local market has always held immense significance for us,” Thune stated.
This location has always been a well-liked tourist destination, but not as much for residents. Following the pandemic, however, many locals rediscovered our area, particularly the shopping centers, retail, amusement, and eateries.
Although Singaporeans can now travel – they’re known for their travel habits, they’re a large outbound tourism market – they’re still enjoying these attractions locally.
Disregard the origin of visitors for a moment, and simply observe their actions. We’ve noticed people are extending their stays. Perhaps it’s pent-up demand: ‘Finally, we can venture out, let’s make the most of it.’ We’re seeing individuals engaging in more lifestyle activities, such as shopping, dining, shows, and nightclubs, and they’re seeking high-quality experiences.
We’re truly motivated by this significant shift toward lifestyle experiences from our primary markets. It’s not just about purchasing goods anymore. People are expressing, ‘I want to visit this place and have a complete, uplifting experience,’ and that’s precisely what we’re striving to provide.
Town mentioned that the demand for upscale shopping centers with excellent retail and dining options is exceptionally high.
He also stated that with people extending their stays, there’s been a slight increase in activities beyond the shopping centers.
For instance, Marina Bay Sands is linked to Gardens by the Bay via a pathway, where there are complimentary and paid botanical attractions, as well as a distinctive Singapore food court known as “Bay’s Satay.” Nevertheless, Tom stated that regardless of how much additional time visitors spend in the city, “We believe it’s a positive development because we can have more extended interactions with patrons. They can reach a greater number of touchpoints.”
**Worldwide Precedence**
Approximately a year ago, Tom and other company leaders visited the United States, Europe, and Australia to observe the rebound in those regions and formulate plans for Singapore’s reopening. Tom mentioned that the group was “taken aback” by customer activity in those markets and theorized that Marina Bay Sands’ recovery might be slower and more cautious.
“That was not the case. Absolutely, once the shift occurred in April and May, it became very, very active. It has been six months now, and there is no downward trend. It remains very, very robust.”
In Asia’s leading integrated resort concentrated on Meetings, Incentives, Conferences, and Exhibitions (MICE), the revival of MICE has lagged behind. To manage the pandemic, Marina Bay Sands developed virtual MICE offerings, including a hybrid broadcast studio utilizing holographic technology – “It’s not like a video conference,” Tom confirmed – and monetized the products, including remote participant lunch meetings in collaboration with Marina Bay Sands’ dining choices.
We experimented with novel approaches that aided us in navigating the pandemic, but we’re delighted to observe the return of in-person gatherings, remarked Tan. He added that the virtual meeting sector isn’t as lucrative as the conventional meeting sector. In-person business is gradually rebounding, with the 1.3 million square foot Marina Bay Sands Expo and Convention Centre hosting pre-pandemic and new bookings.
The Singapore government continues to provide robust support for the development model of the meetings and exhibitions sector. Discussions regarding the future of the meetings and exhibitions sector, as well as the funding and support for the industry, are very strong. We are indeed witnessing an upsurge in demand, stated Tan.
To put it simply, we are optimistic. We believe there is still potential for growth in the future. While it’s true that not all markets have fully recovered, we are confident about the next 12 months.
**From a High Point**
To emphasize this optimism, Marina Bay Sands announced a $1 billion upgrade in February to enhance its luxury brand, with a focus on room renovations. “We aspire to have the finest hotel rooms in the region, and we are confident that we will achieve this,” said Tan, noting that it is a “highly unique and ambitious objective” given the scale of over 2,000 rooms.
This investment builds upon a $4.5 billion expansion agreement signed with Singapore authorities in April 2019, which extended the casino duopoly to the end of 2030 in exchange for each integrated resort adding new facilities. It also immediately increased the entry tax by 50% and raised the gambling tax rate earlier this year.
Arrangements are in progress for the property situated across the road south of MBS Tower 1, as Marina Bay Sands and the authorities have come to an understanding regarding the “final specifics” of the expansion scheme. The project intends to construct a fourth lodging tower with approximately 1,000 rooms, a sporting venue capable of accommodating 15,000 individuals, additional gaming zones, and “essential MICE space,” Town stated.
“The hotels are frequently booked to capacity, hence there is undoubtedly a substantial demand for lodging facilities beyond the existing ones. We have hosted numerous MICE events, that is a certainty. As I mentioned, we observe demand recovering strongly.”
He believes the new sporting venue will supplant the 33-year-old, 12,000-seat indoor arena as the leading facility in its category, making Singapore and Marina Bay Sands more appealing on a regional level. “There is no other [comparable] within 4,000 miles. Consequently, we possess this scale and style, which will provide us with the opportunity to entice performers and entertainers who have never truly visited Singapore.”
“The overall IR2 complex will have a more intimate and opulent ambiance. I believe that will permeate the MICE, retail, and dining experiences,” Town mentioned. Naturally, the new tower will feature its own rooftop pool.
“Individuals perceive MBS and view us as a representation of Singapore’s ambition,” Town remarked.
Consequently, when we discuss the upcoming stage and the actions currently underway on this property, we extensively deliberate on preserving its iconic standing. The government deems it highly significant, we share this sentiment, and I believe the citizens of Singapore concur. Thus, we undoubtedly feel the burden of this responsibility, which explains our unwavering focus on shaping the future.
Born in New Zealand and raised in Singapore until the age of fifteen, Town states he now perceives the same sense of national purpose he recalls from his youth. “This optimistic, ambitious commitment, spanning various societal sectors, the private and public domains, towards excellence… [there’s] a highly unified, collective, positive, ‘we aspire to enhance things here’ [attitude], across numerous facets. Operations function exceptionally well due to the prevalence of social aspects embracing this approach,” he clarifies.
“From our viewpoint, collaborating with the government has been a highly favorable experience. We convene, and it feels as though everyone is striving towards a shared objective. Working here at MBS with a team predominantly composed of Singaporeans, we are able to experience the same advantages, that optimistic spirit.”
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