After the coronavirus pandemic caused massive disruption to the global casino industry, a lot of projects that were previously planned faced delays as income decreased. Las Vegas Sands and its Marina Bay Sands (MBS) integrated resort in Singapore have postponed a multi-billion-dollar renovation, and it appears that the property has not yet recovered.
Marina Bay Sands in Singapore at night. The Las Vegas Sands property will once again delay renovations which were planned since 2019. (Image: Unsplash)
This has been an ongoing problem for the company for a few years. Initially, it signed an agreement to spend over $3.3 billion on improvements at MBS in 2019 in exchange for an extension of its duopoly gaming rights through 2030. MBS and Resorts World Sentosa have a tight grip on the casino gambling in the country.
The Singapore Tourism Board (STB) accepted the agreement and gave Sands until 2027 to finish the upgrades. Nevertheless, when the pandemic hit and casinos around the world closed their doors, Sands asked for, and was granted, additional time to begin. The cycle continues.
Sands In The Hourglass
In the past three years, Sands and the STB have had difficulty as the global gaming giant has tried to postpone the commencement of the upgrades. Last year, they reached a deal which would have forced Sands to begin in the following month. It appears that is not going to happen.
Sands announced today that it has been granted another extension from the STB. The most recent decision will give the company until April 2024 to initiate the work and April 2028 to complete it. Last year, the government agency was not pleased with giving approval, and the same is likely true in the present situation.
It is possible that there have been changes to the intended upgrades Sands has in store. The declaration mentioned “alterations to the construction and operation plans” but did not specify what these are. It also did not comment on any fiscal changes to the deal.
The original renovation project included a fourth hotel tower, fresh entertainment and MICE (meetings, incentives, conferences and exhibitions) areas and other services. In return, the government approved 1,000 new gaming machines and a bigger casino space.
The company previously led by the late Sheldon Adelson has not declared publicly why it requires more time to get started. It managed to hit analysts’ predictions that it would find a secure financial basis but it is apparently not yet where it desires to be.
Last December, Sands reported that its net revenue at MBS for the fourth quarter of the year had a dramatic improvement. Almost 50% more than a year before, the property’s earnings closed at $682 million and its EBITDA (earnings before interest, taxes, depreciation and amortization) rose by 54.2% to $273 million.
Singapore Gaining As Tourist Destination
When MBS eventually meets its promise with the upgrades, it could have a larger tourist base from which it can draw customers. New data from the STB displays that tourism is increasing and 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 grown to 4.81 days. Longer visits come from all tourist categories, with those from countries close to Singapore staying an average of 4.5 nights. This used to be only 3.5.
On the other hand, those who have to travel farther to get to Singapore usually stay for a shorter time, although this segment has also seen improvement. Where they used to only remain in the country for two nights, they now stay for three.
