Friday, July 10, 2009

Marina IR Delay 'No Surprise'

Source : The Straits Times, July 10, 2009

TOURISM players say the signs that there would be a delay in the opening of the Marina Bay Sands integrated resort (IR) were visible: Construction at the site was proceeding slower than it should have been.

A view of the Singapore skyline from the 50th floor of the Marina Bay Sands' hotel towers. The IR's opening has been delayed, but tourism players say the signs were obvious. -- ST PHOTO: DESMOND FOO

They said the fact that work had not started on its 1.2ha rooftop garden - which has to be lifted 200m into place - with less than half a year left to the opening was a massive hurdle to overcome.

Said CIMB-GK economist Song Seng Wun: 'Anyone who has driven by could have seen it's impossible.'

Mr Song and others, however, said the delayed opening would not have much of an impact, given the sorry state of the industry right now.

This year has been a write-off as far as tourism arrivals are concerned, they said, and whatever boost a year-end opening of the IR would have given would have been minimal.

Las Vegas Sands' chairman and chief executive officer Sheldon Adelson said on Wednesday that the IR's opening would be pushed back to January or February.

The admission came after months of assurances by Marina Bay Sands' other executives that the 2,600-room casino-resort would open by the year end, as scheduled.

But while industry observers and agents contacted by The Straits Times say they saw a delay coming, they said the explanation given for it - that there was a shortage of materials and labour - was puzzling.

The Building and Construction Authority, for example, said it had not received any feedback from the industry about a shortage of raw materials.

Whatever the reasons for the delay, experts said there were several reasons why it mattered little.

Singapore Management University's adjunct lecturer for world travel and tourism, Mr Aaron Hung, said the state of the world economy meant few people were ready to travel anyway.

Others said the year-end period was a slow one for business travellers - Marina Bay Sands' target group - so the IR would not lose out either.

CTC Holidays spokesman Alicia Seah said that most travellers at the end of the year are leisure tourists who are less interested in the facilities for meetings, incentives, conventions and exhibitions that the resort would offer.

CIMB-GK's Mr Song went a little further and suggested that the delay might be a blessing in disguise.

By next year, he said, things will pick up in the industry, and back-to-back openings by the Sands resort and the other IR, Resorts World at Sentosa, would create a 'Big Bang' effect.

He added that a delay of a few months 'does not really mean much in terms of the long-term strategy of developing the meetings and conventions market or providing Singapore economic growth'.

Asked about the impact of the delay yesterday, Senior Minister of State for Trade and Industry S.Iswaran would only say that tourism has been hit by the slump like other industries, and that the spread of H1N1 flu 'sort of exacerbated that some'.

He added that the Singapore Tourism Board (STB) and other government agencies were in talks with the IR over the matter and 'we expect to have a good outcome'.

Neither he nor STB would be drawn into details of the discussions, such as whether a penalty will be imposed for the delay.

STB spokesman Muhammad Rostam Umar said: 'For Singapore, it is important that the developers maintain the integrity of the concept of an integrated resort as envisaged, to fulfil the objective of enhancing Singapore's tourism appeal.'

However, not everyone agreed that the postponement means little.

Gaming analyst Jonathan Galaviz, for instance, felt that the impact would be keenly felt. Having a mega-attraction open during the downturn, he said, would be a shot in the arm for the country, and would send an important signal that plans are going ahead despite the stormy weather.

He added: 'Every day that one of the IRs is not fully open is another day that the country is not receiving sorely needed tourism revenue and visitation.'

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