Posted on: March 24, 2023, 09:45h.
Last updated on: March 24, 2023, 11:15h.
After COVID-19 wreaked havoc on the global casino industry, many planned projects faced delays as revenue shrunk. Las Vegas Sands (LVS) and its Marina Bay Sands (MBS) integrated resort in Singapore put a multibillion-dollar upgrade on hold, and it now appears the property still hasn’t completely recovered.
This has been an ongoing issue for the company for several years. It initially agreed to spend over $3.3 billion on upgrades at MBS in 2019 in return for an extension of its duopolistic gaming rights through 2030. MBS and Resorts World Sentosa have a tight grip on casino gambling in the country.
The Singapore Tourism Board (STB) agreed, and gave Sands until 2027 to complete the upgrades. When the pandemic hit and casinos around the world shut down, Sands asked for and received more time to get started.
Sands in the Hourglass
Over the past three years, Sands and the STB have struggled, as the global gaming giant has sought to push back the start of the upgrades. Last year, they struck a deal, which would have forced Sands to begin next month. That’s apparently not going to happen.
Sands reported Friday that it’s received another extension from the STB. The latest move will give the company until April 2024 to begin and until April 2028 to finish. Last year, the government agency wasn’t happy authorizing the approval, and likely wasn’t in this case, either.
There may have also been a change to the upgrades Sands plans to include. The announcement referred to “changes to the construction and operation plans,” but didn’t specify what these are. The announcement also avoided discussing any financial alterations to the agreement.
The initial upgrade project included a fourth hotel tower, new entertainment and MICE (meetings, incentives, conferences, and exhibitions) spaces, and other amenities. In return, the government authorized 1,000 new gaming machines and a larger casino space.
The company, previously led by the late Sheldon Adelson, hasn’t publicly stated why it needs more time to get started. It lived up to analysts’ predictions that it would find solid financial ground, but is apparently not yet where it wants to be.
Last December, Sands reported a drastic improvement in net revenue at MBS for the fourth quarter of the year. Posting an increase of almost 50% from more than a year earlier, the property’s revenue closed at $682 million and its EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped 54.2% to $273 million.
Singapore Gaining as Tourist Destination
When MBS finally fulfills its promise with the upgrades, it could have a larger tourist base from which to grab customers. New information from the STB shows that tourism is on the rise, and that people are staying longer in the country.
In 2019, the average length of stay was 3.36 days, according to the agency. By the fourth quarter of last year, that had increased to 4.81 days. Longer stays come from all tourist segments, with those from countries surrounding Singapore staying an average of 4.5 nights. Previously, the average was just 3.5 days.
Those who travel longer distances to get to Singapore stay for less time, although the segment has improved as well. Where they used to only remain in the country for two nights, they now stay three.