Integrated resorts' S$9b investment to increase appeal to non-gaming visitors: Experts

SINGAPORE — The S$9 billion investment by Marina Bay Sands (MBS) and Resorts World Sentosa (RWS) in non-gaming facilities and attractions are aimed at increasing the appeal of the integrated resorts beyond their casinos amid increasing competition, said industry experts.

On Wednesday (April 3), four government ministries, including the Ministry of Trade and Industry and the Ministry of Finance, said in a joint statement that the integrated resorts will plough about S$9 billion into the projects.

RWS will add new attractions such as a Minion Park and Super Nintendo World to Universal Studios Singapore and expand the S.E.A Aquarium to three times its current size. MBS will build a new 15,000-seater entertainment arena and a fourth hotel tower.  

Both integrated resorts will also be allowed to expand their gaming areas by a combined additional total of 2,500 sqm.

With the expansion, the two resorts are projected to draw in an additional 500,000 international visitors annually and contribute S$500 million to the yearly gross domestic product (GDP). There were 18.5 million international visitors to Singapore last year.

ATTRACTING FAMILIES AND BUSINESS VISITORS

Industry experts told TODAY that the move was aimed at drawing non-gaming visitors to the integrated resorts.

Mr Song Seng Wun, an economist with CIMB Private Banking, said that greater competition from casinos in the region had put the onus on operators here to enhance the experience beyond gaming.

Agreeing, Mr James Walton, Transportation, Hospitality and Services Sector Leader for Deloitte Southeast Asia, said: “By refreshing our tourism attractions, we create new experiences to give people a reason to return for a second visit or stay an extra night.

“The more we can do that, the more competitive we can be in the Asian tourism landscape.”

The different enhancements to MBS and RWS would also appeal to different segments of travellers, as he added that those at MBS would bring more business visitors while RWS’ attractions would draw more families.

For instance, the creation of a new interactive dinner show at RWS would appeal to groups travelling with their families, while the new concert arena and convention spaces set up by MBS would attract those travelling for work.

BOOST TO JOB MARKET

The expansion to both resorts is also expected to create 5,000 new jobs.

RWS said that it expects to create 2,800 new jobs, with 70 to 80 per cent of the vacancies going to Singaporeans and Permanent Residents. Thirty per cent of the new jobs would be for PMETs.

Some 1,800 new jobs will be created at MBS. Currently, two thirds of its workforce comprise locals, who also hold 75 per cent of its PMET jobs. MBS said the goal of the expansion is to maintain or improve on that.

Mr Vishnu Varathan, head of economics and strategy at Mizuho Bank, called the creation of 5,000 jobs “very significant”.

“The economy is already not creating that many jobs. The net number of jobs created is not in the high tens of thousands as it used to be when Singapore was still driven by manufacturing. So 5,000 is a nice bump up.”

He added that most of these jobs were likely to be ground service positions in hospitality, food and beverage, logistics, transportation and security, which meant that there would not be many new openings for professionals, managers, executives and technicians (PMETs).

INCREASED LEVIES, TAXES UNLIKELY TO BOOST GOVERNMENT COFFERS

While the authorities announced an increase in casino entry levies for Singaporeans and Permanent Residents, and introduced a tiered structure for casino taxes from 2022 onwards, experts told TODAY that these were unlikely to add to the Government’s coffers.

The daily levy for casinos will be increased from S$100 to S$150 and the annual levy from S$2,000 to S$3,000.

Casino taxes will change from its current flat rate of 5 per cent to a tiered structure. From February 2022 onwards, the first S$2.4 billion of Gross Gaming Revenue (GGR) from premium gaming will be taxed at 8 per cent, with tax for GGR which exceeds S$2.4 billion at 12 per cent. For mass gaming, the first S$3.1 billion of GGR will be taxed at 18 per cent while GGR exceeding S$3.1 billion will see a tax rate of 22 per cent.

However, Mr Walton pointed out that gaming taxes contributed only about 3.5 per cent of the total operating revenue of Singapore’s budget in 2018. As a result, the increase in levies and taxes was unlikely to change these numbers, he added.

Ms Selena Ling, head of treasury research and strategy at OCBC Bank, said that the tiered tax system would only likely reap more benefits if gaming revenues exceeded expectations.

Mr Walton added that the move to increase levies and taxes was more of a “political statement” by the Government to show that while it was allowing the expansion of the casinos, it still recognised that gambling is a social problem.