Singapore is definitely one of the places that everyone should put into their bucket lists. The city-state has been one of the most thriving places in Asia, and one of the reasons for its success is tourism.
The city offers great accommodations, numerous tourist attractions, and has state-of-the-art gambling offer. However, there are some concerns among analysts that Singapore could be facing difficult times in the years to come. They claim that VIP accommodations could become uncertain and that the market could slow down in the future.
The assessment was the result of a report published by Genting Singapore that displayed some pretty “weak sets of numbers” for the period of January-September of 2019. According to the latest filing, Genting Singapore had a big decrease in net profit for the third quarter of 2019.
In fact, they reported a total of 24 percent decline in comparison to the third quarter of 2018. The direct result for this was that the gambling business achieved overall lower revenue.
According to one of the leaders in Singapore’s investment banking, Affin Hwang Capital, there are several reasons why such a struggle occurred in the first place. One of the primary reasons is that gambling taxes were increased by 50 percent since April. Moreover, the company explained that the GGR for mass-market had dropped by 10 percent year-on-year and that it was SG$334 million (which is approximately $245 million).
However, what Affin Hwang Capital sees as the main reason for the decline is the decline of the win rate, which is currently about 2.6 percent. They stated that the gambling market reached an “all-time high” win rate during the last quarter when 3.7 percent was recorded.
They stated that the win rate in the second quarter of 2019 had been just a mask for the overall weakness of the profitability of Genting Singapore. In other words, Genting Singapore is currently on the benchmark for its success in the future, and things are not looking good right now.
Other Reported Figures
The report also stated that there is an overall decrease of about seven percent of the total revenue of the company. Moreover, it also revealed an 11 percent drop in gaming revenue to approximately $360.7 million.
On the other hand, the revenue made by other non-gambling services increased by one percent, but it is not a legitimate indicator that analysts could focus on. In other words, what we can conclude from this is that the customers are generally using the facilities offered by Genting Singapore, but that they are not entering casinos as much as they used to.
Genting tried to cover up this apparent loss by saying they are having great success when it comes to attracting “affluent customers” from every area in the region. Moreover, they added that they are working on increasing and growing the gambling market in Asia. Indeed, Genting has been focusing on new opportunities, especially the ones that could arise in Japan — mainly Yokohama and Osaka.
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