Singapore’s Marina Bay Sands (MBS) still has room for improvement, despite continuing to break revenue and profitability records, according to CBRE Equity Research.
In a Friday note following release of Las Vegas Sands’ 2Q23 financial results late last week, CBRE’s John DeCree said MBS “still has room to run” given that Chinese tourism is still mid-recovery and some hotel room supply remains offline as part of a US$1 billion refurbishment.
Such prospects bode particularly well for Las Vegas Sands given MBS produced an all-time record US$580 million in mass gaming win for Q2, up 36% on the same period in 2019. Adjusted EBITDA of US$432 million was also 25% higher than 2Q19 and has MBS well on track to achieve the company’s goal of US$2 billion in EBITDA per year.
“We still see plenty of room for MBS to run from here, particularly with only ~50% of pre-pandemic airlift capacity from China returning in 2Q23,” DeCree said.
“Moreover, ongoing construction disruption on the casino floor is coming to a close and 200 higher quality suites are coming back online, allowing MBS to drive pricing and cater to higher value customers.”
While MBS is nearing completion of its recent refurb, it has yet to break ground on a US$3.3 billion expansion project that will see a fourth hotel tower added to the iconic property.
Speaking on last week’s earnings call, LVS President and COO Patrick Dumont said discussions were ongoing as to how and when the expansion would get underway.
“We have very strong feelings about the future success of Singapore,” he said. “We’re every motivated to make an investment there and expand our capacity.
“Right now, we’re in discussions with the government about what the final form of our project will look like. There has obviously been a lot of changes to the market in terms of market potential, the government’s goals around high-value tourism and the way we want to grow into that market. There are some adjustments that we are making and hopefully we will have a better sense of what that will look like in the coming quarters.”
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