Singapore Casinos Aiming For Mass-Market AppealJune 21, 2016 9:58 am
Singapore opened its two casino resorts back in 2010, after which the island city-state soon grew into Asia’s second-biggest gambling hub. By 2015, however, gross gaming revenues had fallen by over 10% to $4.8 billion, with 2016 now also on a similar trajectory. Commenting on the causes of its recent decline in popularity, Union Gaming Group analyst, Grant Govertsen, explained:
“The reality is that the same factors impacting Macau – namely the anti-corruption drive and a slowing Chinese economy – are also impacting Singapore. In addition, currency weakness from Indonesia and Malaysia relative to the Singapore dollar is a contributing factor.”
Against this backdrop, Singapore’s two casino operators, namely Genting and Marina Bay Sands, are likely to see their soon-to-expire exclusivity period extended, and so enjoy the benefits of their duopoly for a while longer. In an attempt to attract new customers, however, the operators have now started focussing upon mass-market gamblers whilst increasing the non-gaming services they offer, and while gambling revenues have taken a hit, non-gaming revenues are holding steady.
Genting’s Resorts World, for instance, has reported only a slight decrease in its non-gaming revenues from
S$653 million in 2014, to S$650 million in 2015, and elaborating further Nomura analyst Tushar Mohata explains that Genting has now opened a new hotel in Jurong which offers lower room rates designed to appeal to “the budget conscious traveller.” This is similar to the situation currently developing in Macau, and according to CIMB analyst Jessalyn Chen:
“They have been redeploying [staff] who used to work in the VIP business, to the mass-market segment. They’re also trying to bring in new customers with promotions such as bringing in Michelin-starred chefs”.
Unlike VIP business, the mass market has not been as badly impacted as the anti-corruption campaign which has targeted high-rollers, and so Singapore’s casinos will continue to offer attractions which appeal to this important demographic into the future.