Singapore’s market-wide gross gaming revenue is unlikely to near full recovery from the COVID-19 pandemic until 2025, with strong mass demand countered by a more sluggish VIP segment.
The potentially lengthy COVID hangover was outlined by brokerage Bernstein in a Wednesday note in which analysts estimate GGR recovery will begin in earnest from this year but endure for another four years, eventually reaching 94% of 2019 levels by 2025.
According to the note from Vitaly Umansky, Louis Li and Kelsey Zhu, Singapore – home to two integrated resorts in Marina Bay Sands and Resorts World Sentosa – will see GGR grow 12% year-on-year in 2021 to SG$1.25 billion and by another 50% in 2022 to SG$1.80 billion. However estimated 2025 GGR of SG$2.30 billion would still fall slightly short of 2019, when gaming revenues reached SG$2.46 billion, despite mass and non-gaming performing well.
“There remains uncertainty around travel restriction loosening in Singapore (and the feeder markets) and the economic impact from COVID-19 on feeder markets (in particular, Malaysia and Indonesia), but we expect Mass GGR and non-gaming to be back to normal in 2023,” Bernstein said.
“Longer term, we forecast Singapore market GGR to recover to ~94% of 2019 level by 2025 with mass recovering above historical levels but VIP remaining sluggish.
“With the opening of Phase 2 developments for Resorts World and Marina Bay Sands, we expect the market to grow with the expansions beyond 2025.”
Bernstein noted that both of Singapore’s casinos had exceeded expectations in 1Q21 with the slot business at Marina Bay Sands even recovering to pre-pandemic on local customer demand. However, there remains some short-term uncertainty given a recent rise in COVID cases that has seen capacity limits reintroduced, including a maximum of two players allowed on each gaming table until at least 13 June 2021.
Nevertheless, the analysts expect Singapore to benefit from the gradual resumption of international travel with GGR recovering to around 73% of 2019 levels in 2022.