Nomura analysts have cited regional travel indicators and an impending visa exemption between Singapore and China is expected to trigger a significant increase in Chinese travellers to the Lion City, in what shapes as a further boost to Singapore’s integrated resort operators.
On the same day that Marina Bay Sands reported an all-time high in quarterly Adjusted EBITDA of US$544 million, Nomura’s Tushar Mohata and Alpa Aggarwal said it is likely Chinese travel began picking up in December following a November slowdown. This, they explained, was based on trends seen in Thailand where the Tourism and Sports Ministry revealed that Chinese tourist arrivals had jumped by 37% month-on-month in December to reach 50% of pre-COVID levels.
“We think Chinese travel will improve from December onwards based on trends seen in Thailand and once the mutual visa exemption between Singapore and China travellers is implemented in 2024,” they wrote in a note previewing Resorts World Sentosa’s impending 4Q23 results release.
The analysts noted that while MBS enjoyed a record quarter thanks to high hold in the rolling chip segment, VIP volume actually fell 11% and mass volume 3% quarter-on-quarter in a “marginally negative read across to Genting Singapore.”
“We think the decline in volume reflects the fluctuation in Greater China tourists into Singapore and Singaporeans travelling overseas on holidays,” they explained.
Nevertheless, Mohata and Aggarwal still expect resilient trends for RWS operator Genting in 4Q23 given Q3 GGR was already back to 123% of its pre-COVID run-rate due to its faster mass recovery, higher premium traveller spending and higher ADRs.
Nomura has therefore maintained its “Buy” rating on Genting Singapore stocks, with FY23 rolling chip volume expected to have grown by 51%, mass table drop by 30% and slot handle by 21% year-on-year.
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