More MBS hotel suites, good for premium gaming: Bernstein
The number of hotel suites at the Marina Bay Sands (MBS) casino resort (pictured) in Singapore will increase by 200% from 150 to 450, under an ongoing program US$1 billion renovation lodging at the property, a Thursday note from brokerage Sanford C. Bernstein Ltd. said.
The suite’s product quality is also expected to increase, up to “high-end ‘Macau-style’ suites,” the memo says.
“The additional suites should enhance premium casino play, but this will come at the expense of some leisure, free independent travelers and group customers, as a higher percentage of rooms will go to casino customers,” Thursday’s memo suggested. Sanford Bernstein analysts. Vitaly Umansky and Louis Li.
Sanford Bernstein said an increase in premium casino gaming should benefit performance at Marina Bay Sands as “overall earnings will be higher with the change in business mix.”
The memo also observed that the total number of accommodation units in Marina Bay Sands’ current hotel space would decrease by just under 12%, from 2,550 to 2,250, as part of the refurbishment.
“While some sequels will go live in 2022, more sequels will go live before Chinese New Year 2023, and the rest in summer 2023,” Sanford Bernstein said.
International casino operator Las Vegas Sands Corp owns and operates Marina Bay Sands. The company’s chairman and chief executive, Rob Goldstein, said on a conference call with investment analysts on Wednesday – following the company’s first-quarter earnings announcement – that the renovation of The US$1 billion Marina Bay Sands accommodation was currently underway and would be completed by next year.
In his first quarter resultsLas Vegas Sands said net revenue at Marina Bay Sands in Singapore fell to $399 million from $426 million in the first quarter of 2021. The latest adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of the ownership in the first quarter was US$121 million, compared to US$144 million a year earlier.
Mr Goldstein, however, noted on the first quarter earnings call that following the announcement by Singaporean authorities that the city-state was to remove nearly all Covid-19 travel restrictions, Las Vegas Sands expects business performance for remainder of 2022 noticeably improve.
Sanford Bernstein observed in its Thursday memo that what it called the “Marina Bay Sands 2.0 expansion” program costing SGD4.5 billion (US$3.31 billion), and which had was agreed with the Singapore government in 2019, was currently “delayed due to the Covid pandemic, but will commence later and Las Vegas Sands fully intends to see large-scale development come to fruition, which will lead to growth significant for Marina Bay Sands in the long term”.
In early April, Las Vegas Sands said it reached an agreement with the Singapore Tourism Board that the updated deadline to begin the expansion could be pushed back. “for one year, until April 8, 2023”.