Big bets on expanding MBS and RWS could pay off despite economic risks

by Albert02

Big bets on expanding MBS and RWS could pay off despite economic risks

Big bets on expanding MBS and RWS could pay off despite economic risks. Singapore’s two integrated resorts (IRs), Marina Bay Sands (MBS) and Resorts World Sentosa (RWS), had a difficult time from early-2020 to early-2022 because to Covid-related movement limitations.

The IRs, on the other hand, are on the mend. Las Vegas Sands (LVS), which owns MBS, announced that the company’s recovery accelerated during the third quarter, with excellent growth in both gaming and non-gaming categories. MBS reported adjusted property Ebitda (earnings before interest, taxes, depreciation, and amortisation) of US$319 million, nearly triple the prior year’s figure of US$112 million. Genting Singapore, RWS’s parent company, saw revenue for the first half of 2022 increase 20% year on year, despite increased power expenses and casino tax rates weighing on overall profitability.

The IRs benefited from a significant reduction in Covid-related restrictions in the second quarter of this year. Singapore has loosened event capacity limitations and reopened nightlife businesses. Visitors who are fully vaccinated, as well as minors aged 12 and under who are not fully vaccinated, are not required to quarantine, take any Covid-19 tests, or request entry authorization. Singapore attracted 1.5 million overseas tourists in the first half of 2022, a rise of approximately a year. Monthly visitor arrivals increased in each of the first six months of this year.

However, the owners of the two IRs are no strangers to spending significant sums in the face of uncertainty on expanding and modernizing infrastructure. The world was in the throes of the 2007-2008 global financial crisis when the IRs were first launched. There are reasons to believe that the IRs’ expansion ambitions will benefit their shareholders.

For starters, as more countries accept Covid-19, international travel is becoming more convenient. Many people have retained a desire to travel for pleasure in search of new experiences or for business in order to build relationships after emerging from the pandemic and hibernation. While MICE events may have more virtual components, in-person events appear to be valuable business development forums for participants.

Second, Singapore’s standing as a premier leisure and business travel destination may improve following the pandemic. Travelers may value using well-designed and operated airports, such as Changi Airport. Singapore’s Changi Airport is expanding with the Changi East expansion, which will include a new Terminal 5, enhanced cargo facilities, and a three-runway system. Singapore may profit in the casino gaming business since Macau’s tough restrictions, which is pursuing a Covid-zero approach, may entice visitors to Singapore’s IRs instead.

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Source:
https://www.businesstimes.com.sg/opinion/big-bets-on-expanding-mbs-and-rws-could-pay-off-despite-economic-risks


 
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