GGRAsia – More MBS hotel suites, good for premium play: Bernstein

More MBS hotel suites, good for premium play: Bernstein

Apr 28, 2022 Newsdesk Latest News, Singapore, Top of the deck

The number of hotel suites at the Marina Bay Sands (MBS) casino resort (pictured) in Singapore will rise by 200 percent, from 150 to 450, as part of an ongoing US$1-billion refurbishment of accommodation at the property, says a Thursday note from brokerage Sanford C. Bernstein Ltd.

The quality of the suite product is also due to rise, to “‘Macau style’ high-end suites,” said the memo.

“The additional suites should improve premium casino play, but it will come at the expense of some leisure, free independent traveller, and group customers, as a higher percentage of rooms will go to casino customers,” suggested the Thursday memo from Sanford Bernstein analysts Vitaly Umansky and Louis Li.

Sanford Bernstein stated that an increase in premium casino play should benefit Marina Bay Sands’ performance, as “overall profit will be higher with the business mix shift.”

The note also observed that the aggregate number of accommodation units at Marina Bay Sands’ current hotel space would decline by just under 12 percent, from 2,550 to 2,250, as part of the refurbishment.

“While some suites will come on line during 2022, a larger number of suites will be on line before Chinese New Year 2023, and the rest in summer 2023,” said Sanford Bernstein.

International casino operator Las Vegas Sands Corp owns and operates Marina Bay Sands. Company chairman and chief executive Rob Goldstein said in a conference call with investment analysts on Wednesday – following the firm’s announcement of its first quarter results – that the US$1-billion refurbishment of Marina Bay Sands’ accommodation was currently under way, and would be completed by next year.

In its first-quarter results, Las Vegas Sands said net revenues at Marina Bay Sands in Singapore declined to US$399 million, versus US$426 million in the first quarter of 2021. The property’s latest first-quarter adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) was US$121 million, versus US$144 million a year earlier.

Mr Goldstein noted however on the first-quarter earnings call that, following the announcement by the Singapore authorities that the city-state was to remove nearly all Covid-19-related travel restrictions, Las Vegas Sands expected business performance for the rest of 2022 to improve significantly.

Sanford Bernstein observed in its Thursday memo that what it termed “the Marina Bay Sands 2.0 expansion” scheme costing SGD4.5-billion (US$3.31 billion), and that had been agreed with the Singapore government in 2019, was currently “delayed due to the Covid pandemic, but will start later and Las Vegas Sands fully intends to see the large scale development come to fruition which will drive significant growth for Marina Bay Sands in the long-run”.

In early April, Las Vegas Sands said it had reached a deal with Singapore Tourism Board, whereby the updated deadline to start on the extension could be pushed back “by one year, to April 8, 2023”.