Las Vegas Sands Corp. announced a $3.3 billion expansion Wednesday to the Marina Bay Sands resort in Singapore that will include a 15,000-seat arena, a 1,000-room hotel, and additional convention space.
Expansion to the resort’s casino – one of two in the island nation – is not part of the project.
The company has entered into a development agreement with the Singapore government and “will quickly” begin work on the new project. The development will be located next to the existing Sands resort, which has become a landmark in the Singapore skyline.
Las Vegas Sands executives have long wanted to expand the property’s foothold in Singapore, saying on quarterly conference calls it needs additional hotel space at or near Marina Bay Sands. In 2018, Marina Bay Sands contributed almost $3.1 billion in revenue to the company’s overall revenue figure of $13.7 billion.
According to statement, since opening in 2010, Marina Bay Sands has attracted more than 330 million visitors. The property has brought more than 700 meetings and conventions to Singapore and hosted 3,680 events at the property’s existing convention center in 2018.
“New luxury hotel accommodations and a world-class entertainment venue are exactly the catalysts we need to drive additional visitation to Singapore, and specifically to Marina Bay Sands,” Las Vegas Sands President Rob Goldstein said in a statement.
Goldstein added that Marina Bay Sands is a key component of the company’s growth strategy, reflecting the market’s mission for tourism and increased business potential.
“The additional hotel rooms are extremely important to us in addressing the demand created by our leisure and business tourists and our premium gaming customers,” Goldstein said.
Stifel gaming analyst Steven Wieczynski said in a note to investors Wednesday morning that Marina Bay Sands has been “constrained” by its size, which effectively placed a ceiling in the property’s estimated $1.5 billion to $1.8 billion in cash flow. The analyst said demand for the resort remains “robust,” particularly among the mass market.
“The Marina Bay Sands routinely operates at occupancy north of 95 percent, while at the same time delivering annual daily room rates in the low-to-mid $400’s and consistently producing mass casino win per day in excess of $4 million,” Wieczynski said. “We believe the additional room supply and (convention and meeting) amenities should allow Las Vegas Sands to tap into the unmet demand that exists throughout the southeastern and central Asian regions.”
Marina Bay Sands, built at a cost of more than $5.7 billion, became an immediate Singapore landmark. The three-towered, 57-story hotel-casino-resort includes as its centerpiece a three-acre SkyPark, which sits atop the three hotel towers and weighs almost 7,000 tons. The SkyPark offers panoramic views of Singapore’s waterfront and the island nation’s skyline. It includes the world’s largest rooftop infinity pool and three restaurants and bars.
Last year, the Marina Bay Sands was a backdrop in the film Crazy Rich Asians and was visited by North Korean ruler Kim Jong-Un during an impromptu guided tour of downtown Singapore prior to his summit with President Donald Trump.
The new 15,000-seat arena is expected to attract top entertainers from Asia and around the world. The new hotel tower will feature approximately 1,000 all-suite rooms and include a sky roof with a swimming pool and a signature restaurant. The tower will feature an atrium and terraces along with additional food and beverage offerings and a combination of meeting rooms, ballrooms and exhibition halls.
Las Vegas Sands said Moshe Safdie, who designed the original property, Aedas and Gensler are planning to be part of the team responsible for the design elements of the building.
The current total projected budget for the expansion is approximately $3.3 billion. A timeline for its completion has yet to be determined.
Deutsche Bank gaming analyst Carlo Santarelli told investors the exclusivity period for the two Singapore resorts – Marina Bay Sands and Resorts World Sentosa – expired in 2017 but will be extended until 2030. Also, entry fees on Singapore residents to enter a casino will increase 50 percent in 2022, and the gaming tax rates will increase after the current moratorium expires in February 2022.
“Broadly speaking, we view this as a relatively positive development for Las Vegas Sands, given what we believe to be some mass stagnation, caused by capacity constraints,” Santarelli said.
The press release contained a statement from Las Vegas Sands Chairman and CEO Sheldon Adelson, who has been sidelined since late last year while being treated for non-Hodgkin Lymphoma.
“Marina Bay Sands is an iconic tourism destination that has exceeded all of our hopes in growing leisure and business tourism in Singapore and it is a privilege to receive the Singapore government’s continued support of its development,” Adelson said. “I’m very proud of the commitments we have fulfilled and our ongoing relationship with the people and government of Singapore. Integrated resort development in Singapore is a tremendous example of government and private business working together to maximize an opportunity that benefits all those involved.”
Shares of Las Vegas Sands closed at $64.17 on the New York Stock Exchange Wednesday, down 68 cents or 1.05 percent.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
