ASIA/PACIFIC
November 1, 2010
Marina Bay
The Long Reach of a Damaged West
Singapore’s red-hot economy may be
cooling a bit, but the Ministry of Trade and Industry said the city-state
remains on track to achieve forecasted growth of 13 to 15 percent for the
year.
The economy expanded by a still robust 10.3
percent in the third quarter over the same period in 2009, down from the second
quarter’s 27.3 percent rate, while on a seasonally adjusted quarter-by-quarter
annualized basis the economy actually contracted by 19.8
percent.
“The decline in growth momentum was an
expected correction from the exceptional growth in the first half of the year,”
the ministry said.
Asian nations from Thailand to Japan have
taken steps recently to tamp down appreciation in their currencies, which is
threatening exports at a time when global growth is slowing. Reuters recently
quoted Singapore Prime Minister Lee Hsien Loong as saying growth in the
city-state may “moderate” in the coming months after a record first-half
expansion, citing risks from Europe and the United States.
“Singapore is typically a bellwether for the
region’s export outlook, and it is the first to show cracks as global growth
slows,” economist Alvin Liew of Standard Chartered said.
Threats to Asian growth include “the fading
impact of stimulus packages, stubbornly high unemployment rates and austerity
measures that are likely to crimp consumption in the West,” he
said.
Growth in visitor arrivals to the city-state
dipped in August to 18 percent from July’s record 24.1 percent. But the month’s
total of 996,000 visitors was the highest ever for August and the ninth
consecutive month when visitor arrivals hit a monthly record, according to the
Singapore Tourism Board.
Not counting overland crossings from
Malaysia, Indonesia contributed the largest number of visitors in August with
165,000. China was the fastest-growing feeder market, jumping 51 percent to
131,000.
The average occupancy rate at Singapore
hotels rose to 85 percent for the month, a gain of 7.6 percentage points
compared with a year ago. The average daily room rate increased by 24.7
percent.
HOTEL MARKETS REBOUND ACROSS EAST ASIA
A
strong rebound in Asia’s hotel industry bodes well for the region’s gambling
destinations.
As visitors to the recent Hotel Investment Conference Asia Pacific
in Hong Kong heard, RevPAR across East Asia is climbing back toward its 2008
peak of US$95 after falling to $73 last year. RevPAR through August was up more
than 23 percent year-over-year to $86, according to data from STR
Global.
“The good thing is
we’re starting to see actual rate growth in addition to demand growth,” said
Jonas Ögren, a Singapore-based area director for STR. “Almost every market is
up in occupancy. About three months ago, we began to see rates go into positive territory. Hong Kong was the first one.
They were able to bring up rates very quickly.”
Through August, Tokyo led the region in
average daily rate at US$268. Shanghai was lowest at $128. Tokyo also led in
RevPAR at $199.
More than 63,600 rooms opened in the region in 312 hotels during
the past 12 months, Ögren said, bringing current supply to more than 2.4
million rooms at 17,600 hotels. More than 60 percent of the rooms are
“unaffiliated,” meaning they are not part of any big brand. The current
development pipeline calls for 255,208 more rooms at 1,037 hotels, 40 percent
of which are not affiliated. STR projects 95,300 rooms coming on line next year
and 88,900 in 2012.
IPO DRAWS NEAR FOR MGM CHINA
MGM
China Holdings, the Macau partnership between MGM Resorts International and
Pansy Ho, has moved a step closer to going public, filing a preliminary
application for an IPO in Hong Kong.
No decision had been made about the timing of a stock sale or how
much to raise, according to an MGM filing with the U.S. Securities and Exchange
Commission. However, Jefferies & Co. analyst David Katz said in an
investors note cited by Bloomberg that a public sale of 25 percent of the
partnership’s Macau assets is expected to raise as much as US$300 million for MGM’s
50 percent share.
MGM Resorts CEO James Murren has said the
company plans to build “multiple properties” in Macau’s booming casino market,
of which the joint venture has the smallest share of the six casino license
holders. The casino operating company controlled by Pansy Ho’s father,
billionaire Stanley Ho, has the lion’s share of the market.
Murren has said he is “confident” the share
sale would be done in the third quarter.
“We designed this joint venture to go public,” he told Bloomberg.
“It’s happening at a time when the Macau market is obviously large and growing.
We like how we’re positioned there.”
MOODY’S POSITIVE ON CASINO SECTOR
Moody’s Investors
Service has given the thumbs up to Malaysia’s sole legal casino, in part for
holding up well against the new mega-casinos in neighboring
Singapore.
In a report released last month, the bond rating agency said the
country’s monopoly casino, Resorts World’s Casino de Genting north of Kuala
Lumpur, has been unaffected by the Singapore competition, while all signs point
to the market maintaining its stability and resilience.
Resorts World also operates one of the Singapore
casinos.
Moody’s has issued a stable outlook for the
Asia-Pacific casino sector as a whole as robust levels of regional travel and
consumer spending continue to support steady growth in gaming revenues. Over
the medium-term, the agency expects the Asia-Pacific markets will add more
capacity as more operators seek opportunities in light of the industry’s strong
performance.
“The liberalization and development of gaming markets elsewhere in
Asia are also a possibility, but these are more medium- to long-term challenges
with no impact in the foreseeable future,” the agency said.
“Looking ahead, we expect Macau’s gaming
revenue to extend its growth in the next 12-18 months, supported by China’s
still-booming economy,” said Moody’s Assistant Vice President and analyst Kaven
Tsang.
WITH EYE ON INDIA, SANDS TOUTS MACAU AS FAMILY-FRIENDLY
Sands China is
turning its gaze increasingly to the Indian subcontinent, opening sales offices
in Mumbai, Delhi and Bengaluru on the heels of a recent three-city road show
through Chennai, Kolkata and Hyderabad.
“India is the fourth-largest source market
in the region with a variety of interest in not only gaming but also in retail,
culture, entertainment, dining, MICE and even wedding activities,” said Ruth
Boston, The Venetian Macao’s vice president of destination
marketing.
Sands China also has begun marketing its properties for weddings
and has made arrangements to suit Indian weddings, Boston told
Travelbizmonitor. The Venetian is keen on promoting itself as an “overall
family experience” among Indian travel agents and trade partners, she
said.
India is one of the fastest-growing outbound travel markets in the
world. According to the Pacific
Asia Travel Association, outbound tourism is expected to hit 20.5 million by
2015.
More than 180,000 Indians visit Macau each year, a number that is
steadily increasing, Boston said.
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