Las Vegas Sands Chairman and CEO Robert Goldstein has warned that the recovery trajectory of its Singapore integrated resort, Marina Bay Sands (MBS), remains largely dependent on higher flight volumes across Asia as the property looks to expand its reach.
Goldstein was speaking on the company’s 2Q22 earnings call on Thursday morning (Asia time) after MBS saw revenue grow by 70% quarter-on-quarter to US$679 million and Adjusted EBITDA by 164% to US$319 million.
While noting that he was delighted by property’s Q2 figures, Goldstein said the property’s improved business volume was heavily skewed towards nearby nations such as Malaysia and Indonesia while the return of customers from further afield remains constrained by distance.
“The biggest thing we are seeing is that airlift is opening up but that also continues to be the most challenging part of the Singapore recovery,” he explained.
“We are getting a lot of good business out of the region – especially Indonesia and Malaysia – but I think there is a lot more opportunity as airlift returns.
“Chinese monthly visitation numbers are still less than 50% of what they were pre-pandemic so although we are delighted by Singapore and the numbers reflect that, there is reason to be more optimistic in the months ahead.”
According to figures from the Singapore Department of Statistics, monthly passenger volume at Changi Airport has grown steadily every month since February but had still reached just 46% of 2019 levels in May.
“The story of MBS is a regional story and a Singapore story as it gets more visitation,” Goldstein continued.
“Unlike the US where airlift is back, Singapore is still a place you need to fly to and the airlift story continues to hamper recovery. The US$300 million-plus quarter is a pleasant upside to what we thought we would do but there is a lot more room to run as this market opens up into Japan and Korea and places like that. We are really quite dependent right now on the closer-in foreign markets.”
Also keeping numbers restrained is the capacity of other high-end hotel brands across Singapore, belying the 93.9% occupancy rate achieved by MBS in the June quarter.
“One thing that is disturbing is that the hotel business, even the luxury brands, haven’t been able to get [back to opening at] 100%,” Goldstein said.
“Some are running at 40% to 50% capacity because they don’t have adequate personnel, and that feeds into MBS.
“We are running high occupancy at MBS but you need to factor in when the rest of the market recovers. That’s why I reference the other high end luxury hotels because [they provide] lots of sleeping rooms that we benefit from. “They come to shop with us, eat with us, gamble with us, so we’re not getting that lift and that could be very impactful down the road. We are very happy with the spend levels we’re seeing and the occupancy rate we are getting but we are not getting that extra lift from the people who don’t sleep in our hotel.
“You can’t lose 3 million people in May and not have some impact on numbers. The question though is: how high is up?”
The Singapore Tourism Board recently predicted international visitor arrivals will reach between 4 million and 6 million in 2022, having notched 1.5 million arrivals during the first half of the year.
Singapore’s top five source markets in 1H22 were Indonesia (282,000), India (219,000), Malaysia (139,000), Australia (125,000) and the Philippines (81,000), accounting for a combined 56% of all arrivals.
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