High rollers spent more money than expected at Resorts World Sentosa, helping drive strong earnings and profits in the third quarter for Genting Singapore.
Quarterly profits rose 35 percent year-over-year for the operator, thanks largely to stronger volume from VIP and premium mass market gamblers during the quarter.
Overall gaming revenues were up 11 percent to SGD452.05 million ($331 million), providing the bulk of the growth for the company, which saw an eight percent overall increase in revenues. That led to a profit of SGD143.79 million ($105 million) for the firm.
“Our gaming business grows steadily with our VIP business showing respectable increase in volume, complemented with an acceptable bad-debt provision ratio,” Genting said.
Tighter Credit Policies Limit Exposure to Bad Debt
The debt situation was helped by changes in the company’s credit policies. The casino has been more stringent in granting credit to its clients, a move that brokerage Sanford C. Bernstein predicted might harm the company’s ability to attract VIP gamblers.
But there is a positive side to the policy as well: because gambling debts can be difficult for Singaporean casinos to recover, particularly from Chinese players, Genting’s tighter credit policies could help the company limit its exposure to these potential losses.
Non-Gaming Business Also Improving
The good news wasn’t limited to the casino floor. Overall, visitors were spending more on Genting’s attractions, and daily average visitorship was up five percent. Meanwhile, their hotel business enjoyed an impressive 93 percent average occupancy rate for the quarter.
These non-gaming revenue sources are likely to continue to improve in the months to come. One of the resort’s latest attractions, the Maritime Experiential Museum, is slated to have a soft launch during an upcoming festive season. The company has also stepped up its culinary attractions: a recent food festival featured 30 celebrity chefs, while a “Street Eats” event featured vendors from across Southeast Asia. The company is also set to open a new Japanese fine-dining restaurant.
“These events have collectively attracted almost 170,000 visitors, which is testimony that our approach to re-position RWS as a lifestyle brand is working,” Genting said.
While Genting will undoubtedly be happy with the growth they are seeing out of their Singapore resort, they still have a long way to go to be the top dog in the market. Resorts World Sentosa is firmly entrenched in second place in the two-way race for Singaporean casino supremacy, with Marina Bay Sands holding on to a significant lead.
According to analysts, Sands holds about 62 percent of the market share in the country, compared to 38 percent for Genting. Analysts at Sanford Bernstein predicted that this situation could become even more lopsided thanks to the many advantages enjoyed by the Sands facility.
“Marina Bay Sands has a better location in the center of Singapore, greater MICE exposure and in our view, a superior management team,” the brokerage wrote in a note released last week.