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. Because of Covid-related movement restrictions, 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.

The IRs, on the other hand, are recovering. MBS’s parent company, Las Vegas Sands (LVS), reported that the firm’s recovery accelerated in the third quarter, with outstanding growth in both gaming and non-gaming categories. MBS reported adjusted property Ebitda (earnings before interest, taxes, depreciation, and amortisation) of US$319 million, substantially tripling the value of US$112 million recorded the previous year. Genting Singapore, RWS’s parent business, saw revenue grow 20% year on year in the first half of 2022, despite higher electricity expenses and casino tax rates weighing on overall profitability.

In the second quarter of this year, the IRs benefited from a major reduction in Covid-related restrictions. Singapore has relaxed event capacity restrictions and reopened nightlife establishments. Visitors who are completely vaccinated, as well as youngsters aged 12 and under, are not required to quarantine, take any Covid-19 tests, or obtain entry authorization. Singapore drew 1.5 million overseas tourists in the first half of 2022, a year-on-year increase. Each of the first six months of this year saw an increase in monthly visitor arrivals.

However, the owners of the two IRs are no strangers to spending huge sums on extending and updating infrastructure in the face of uncertainty. When the IRs were originally introduced, the world was in the grip of the 2007-2008 global financial crisis. There are reasons to anticipate that the IRs’ ambitious expansion plans will benefit its shareholders.

To begin with, international travel is getting more convenient as more countries recognize Covid-19. After emerging from the pandemic and hibernation, many people have retained a desire to travel for pleasure in pursuit of new experiences or for business in order to create relationships. While MICE events may have more virtual components, in-person events appear to provide participants with excellent business development opportunities.

Second, following the epidemic, Singapore’s standing as a prime leisure and business travel destination may improve. Travelers may value using airports that are well-designed and operated, such as Changi Airport. Changi Airport in Singapore is growing with the Changi East project, which will include a new Terminal 5, improved cargo facilities, and a three-runway system. Singapore may benefit from the casino gaming industry since Macau’s severe restrictions, which are pursuing a Covid-zero strategy, may draw people 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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