Resorts World could hold the aces

Out of the two integrated resorts that may be opening at the end of the year, Genting Singapore’s Resort World may have the upper hand over Marina Bay Sands when i t comes to packing in the local punters.
And the secret to what may be the key to Resorts World getting the upper hand could just be the Universal Studios movie theme park. Analysts from DBS Vickers Securities believe that Universal Studios may be the key to attract Singapore’s mass market, and Genting’s strength in the mass market.

Genting to raise the stakes in gaming
The analyst team from DBS Vickers Securities believes that when it comes to Singapore’s gaming industry, Resorts World will edge out Sands.
“Genting Singapore has the largest exposure to Singapore’s US$3b gaming market. Resorts World at Sentosa (RWS) can tap on Singapore’s existing domestic gaming market, rising regional tourism and leverage on Singapore’s transformation into a global city,” he said.

“RWS could open earlier than expected, possibly in December of 2009 or January of 2010 to coincide with the Chinese New Year peak season,” said the DBS Vickers Securities team of analysts.
“It could overtake Marina Bay Sands - whose launch has been postponed to the first quarter of 2010 from the end of 2009 – by taking an advantage in locking in the local market share. Aside from this RWS’ construction is on-track, with 71% of project cost has been awarded to date with testing/ commissioning of ride equipments scheduled for November 09.”

What does Marina Bay have to offer?
But that doesn’t mean that Marina Bay is giving up. Thomas Arasi, president and CEO, , believes that when it opens Marina Bay Sands will set a new standard for “Wow!” in Asia.

“The Sands SkyPark™ will be 200 metres from the ground atop Marina Bay Sands’ three hotel towers. and the two floating Crystal Pavilions on the waterfront. Marina Bay Sands’ two theatres will host an extensive range of Broadway shows, world-class productions and special gala events that may have bypassed Singapore in the past.” he said
Donald Chua, an analyst with CIMB-HK reckons expectations for the integrated resorts aren’t very high.

“While many we spoke to are not negative on the prospects (of the IR), they aren’t very positive either.

And there are uncertainties raised over the level of incremental demand for properties that can be generated from the spill-over effects of the IRs.

Many also used Macau and Disney Land in Hong Kong as examples, recalling how the lofty expectations of investors before the openings were disappointed by the eventual lukewarm impact,” said Chua.

“The current low expectation on the IRs is showing, most starkly through valuations of S-REITs and Singapore developers. While we aren’t sceptical ourselves, we also re-iterate our view that the potential impact on property prices from the IRs cannot be underestimated.
We think that the low expectations will provide very strong potential upside surprise for stocks if the IRs prove to be successful,” he added.

Still upbeat
Resorts World Sentosa on the other hand doesn’t seem to be worried about the lukewarm response coming from abroad surrounding the impact of the integrated resorts.

Not surprisingly, Robin Goh, assistant director communications for Resorts World anticipates nothing but success for the IR. “As the date draws nearer to the opening, we are very excited and confident that Resorts World at Sentosa will be a success and achieve our goal of bringing in twelve to thirteen million visitors in our first year of operation.

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