Genting Singapore moves company precedence to help large sector.
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Genting Singapore PLC, which has been reliant on VIP high rollers in the past years, wants to lure more mass market players to its facilities amid dampening VIP credit quality.
Bloomberg Intelligence reported that Genting Singapore is pivoting away from the VIP segment in casino gaming as the number of heavy-hitting gamblers from China dwindles following Beijing’s ongoing crackdown on corruption and capital outflows.
Data showed that the volume in Genting’s VIP segment has dropped 76 percent since the first quarter of 2014. The data stands in contrast with the casino operator’s mass market segment which is slowly becoming its bread and butter.
The same data showed that most of Genting’s casino revenue is coming from the mass market segment, with turnover of US$250mil to US$300mil.
It’s early to say whether Genting Singapore is making the right move in overhauling its business model – marketing more heavily into other Asian markets and to premium mass markets.
Analysts claim that Singapore’s VIP gaming is showing signs of stability this year due to the steady demand from non-Chinese gamblers and the return of wealthy mainland Chinese visitors.
Early this month, UOB Kay Hian analyst Vincent Khoo said that Genting Singapore is working on a 5-year roadmap to strengthen Resorts World Sentosa‘s appeal as a lifestyle destination.
Singapore’s strategy mirrors the steps taken by Macau, where the casino operators shuttered VIP rooms and opened new hotels and tourist attractions in an attempt to attract a wider customer base.
Compared with the VIP sector, analysts say the mass market – made up of travelers from other Southeast Asian countries – has been immune to China’s anti-graft drive. The only hiccup to this strategy, according to experts, is that the weakening of regional currencies such as the Malaysian ringgit will make it more expensive for tourists from neighboring countries to visit Singapore.
“No details have been revealed but management shared that it is currently in talks with government on the matter and hopeful to provide more information by end-2017,” the analyst said.