Thứ Hai, ngày 21 tháng 7 năm 2014

Hotel room crunch drags Singapore"s gaming revenue growth in 2014


Mass segment growth will be flat.



Singapore’s gaming industry sees a weak gross gaming revenue (GGR) growth in 2014, a report by UOB Kay Hian revealed today.



According to the report, the uninspiring domestic scene will have a modest GGR growth of 3% this year, as the mass segment remains flattish thanks to market saturation, the hotel room crunch, and the stronger Singapore dollar.



“Despite our cautious outlook on the VIP segment (-5% yoy) amid macro concerns, especially in China, we forecast Singapore GGR to grow modestly by 3% in 2014 mainly due to normalisation of win rate to 2.85% (2013: 2.5%). On the other hand, we expect the mass segment to remain flattish due to: a) market saturation, b) constraints of hotel rooms (90% occupancy), and c) Singapore dollar’s strength against regional currencies, thus impacting gaming budget. However, GENS may be able to gain minor mass segment market share (c.45% currently) upon opening its 500-room Jurong hotel expected mid-15,” noted the report



Here’s more from UOB Kay Hian:



Eyes still on Japan. Given the uninspiring domestic scene, excitement for the sector would come from sizeable foreign expansion opportunities, especially in Japan. We gather that the Japan gaming bill was briefly discussed in the previous Diet session before being postponed due to time constraint. However, lawmakers may continue debating the bill again should they call for an extraordinary session in Oct/Nov 14. Although we remain optimistic of an eventual liberalisation, we caution that any Japanese venture remains

long-dated.



Strong win rate. In spite of a 3-year low rolling chip volume (RCV) of S$13,058m (-19.3% qoq, -27.3% yoy), Marina Bay Sands (MBS) delivered 2Q14 EBITDA of US$417.8m, (-4.0% qoq, +17.6% yoy), mainly attributed to a commendable win rate of 3.45% (2Q13: 2.53%; 1Q14: 3.41%). As a result, MBS recorded a 3.9ppt improvement in EBITDA margin to 51.9% in 2Q14.



Muted growth for mass. For the quarter, MBS reported flattish mass GGR (+1% yoy) which corroborates with our muted view of the segment. However, management displayed excellent floor management capabilities, with the mass segment achieving a hold rate of 24.8% (2Q13: 23.4%), running on a steady growth trend. Overall, we expect MBS to remain the market leader (c.55%) in the mass segment thanks to its superior

location and larger hotel inventory.

  




Hotel room crunch drags Singapore"s gaming revenue growth in 2014

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