Impacts and Opportunities of Integrated Resorts in Singapore
For the purpose of boosting tourism industry of Singapore, the Prime Minister of Singapore, Lee Hsien Loong (2005) announced cabinet‟s decision to develop two Integrated Resorts (IRs) on two sites – Marina Bayfron and Sentosa
during a parliament session on 18th April 2005. The term „Integrated Resort‟ (IR) is
commonly used by the Singapore government to refer to a mega vacation resort which is built based on a casino (Tam, 2009). MacDonald and Eadington (2008, p. 32) provided a more quantitative definition of IR. They defined IR as a massive resort which includes a casino that just occupies a small portion of the space (around 10%) of the resort but contributes at least $300MM in gaming revenues. Ministry of Trade and Industry (MTI) (2008) stated that the aim of the Integrated Resorts is “to broaden
our leisure and entertainment options to enhance Singapore's reputation as a premium „must-visit‟ destination for leisure and business visitors”.
Before further discussion, it is necessary to provide some basic information
thabout these two licensed resorts with casino facilities. On 18 of April 2004, the
Singaporean government announced that licenses would be awarded to two IRs. The government chose the winner bid from the nineteen bids it received. Las Vegas Sands Co., and Getting Group were allowed to proceed the development in Marina Bayfron and Sentosa respectively. Las Vegas Sands Co., provided 5 billion Singapore dollars to finance the Marina Bay Sands (LVS) and the Getting Group provided 6 billion Singapore dollars to finance Resorts World at Sentosa (Hung et al., 2010). Thus far, Marina Bay Sands and Resorts World Sentosa are the only two IRs which are currently operating in Singapore. Both Marina Bay Sands and Resorts World Sentosa opened the doors at early 2010. These two resorts are built on the basis of casinos and there are also other facilities and attractions that will make the resorts attractive to the
leisure and business travellers.
Given the development of IRs in Singapore described above, its impacts on the Singaporean society has triggered intense debates among pubic, academicians and within government. However, too much of the emphasis has been given to the economic benefits associated with IR (Henderson, 2006; Hung et al. 2010). The discussion about political, environmental and social influence of IR is still rare. This essay is dedicated the holistic evaluation of the impacts of IR on Singapore society and the discussions of the potential business opportunities to increase the income from business travel, meetings, incentives, conventions, and exhibitions (BTMICE).
2 The Impacts of Integrated Resorts on Singapore
In the ministerial statement, Prime Minister Lee Hsien Loong (2005) expressed two concerns which led to the position of opening IRs: Singapore was losing the ground of tourism and was bypassed and left behind of the trend of reinventing the city. As part of the efforts to boost tourism industry and economy as a whole, IPs were approved to operate in Singapore. Though the influence of IR has always been central to social debate, the emphasis dedicated to the issue has more on the economic aspect than other on social aspects. A holistic understanding on the performance of IR within a changed environment can be achieved using a PESTEL evaluation which examines political, economic, social, technological, environmental and legal issues related to IRs. In the following section of discussion, the impacts of IRs on Singaporean society will be examined from these aspects.
Numerous governments have approved and encouraged integrated resort development to improve economical output and competitive advantages of nation. In
an increasingly competitive global environment, developing IRs can effectively sharpen national competitiveness of Singapore by revitalizing tourism and tourism - related industries.
The resorts with casinos can enhance the competiveness of Singapore in the highly competitive international tourism market. Due to its tropical climate, efficient infrastructure, green and safe environment and stock of quality accommodation,
Singapore is one of the popular destinations (Henderson, 2007, p. 404). However, the number of attractions which people can visit in Singapore has always been limited because of the small size of the country.
Pawitra and Tan (2003) conducted a study examining tourist satisfaction in Singapore and identified the following strengths of Singapore as an attractive destination: uniqueness of local blend of multicultural heritage; colorful nightlife; modern life style; and availability of world-class brand new products and services. But this research also identified some weaknesses which made Singapore less attractive: not unique attractions, not long - lasting vacation experience, inconvenient accommodation and uninteresting international art exhibition and performance. Furthermore, Singapore is facing intense competition from other Asian - Pacific countries especially Malaysia and Macau.
As a result, tourists are spending less time in Singapore than in other major cities (Lee, 2005). In Average visitors stay in Singapore three days, while in other three cities, London, New York and Hong Kong four days. IRs will enhance phenomenally Singapore's overall appeal as a must-visit destination by offering a wide range of vocational experiences for the leisure and business visitors. Singapore can find a way to tackle the weaknesses of its tourism industry through IR.
The two IRs have brought more visitors to Singapore. Singapore Tourism Board (STB) (2010) has outlined its Tourism 2015 vision. This ambitious vision aims to “ensure that tourism sector remains competitive and continues to be a key
contributor to the economy in the years to come”. The vision includes targets of
tripling Tourism Receipts (TR) to S$30 billion, doubling visitor arrivals (VA) to 17 million, and creating an additional 100,000 jobs in the services sector by 2015. STB's targets for 2015 are given in the following table 4.0.
Table 4.0 Targets set by Tourism 2015
Indicator 2004 2015 Target
Tourism Receipts (S$ billion) 30
Visitors Arrivals (million) 8 17
Tourism Employment 150,000 250,000
The IRs not only attract visitors to the attractions of Marina Bay Sands and Resorts World Sentosa but also bring more travelers to the shops, restaurants, convention venues, entertainment venues and other attractions outside the two IRs.
More foreign leisure and business visitors come to Singapore due to the more attractions which they can enjoy definitely will contribute to the increase in revenue. The two IRs have not only attracted more international visitors and create more revenue, but also have created more jobs in tourism and other industries (Tam, 2009). A lot of job opportunities are available in the tourism and other related industries - in the hotels, theme parks, shopping malls and casinos. All these job opportunities depend on tourism traffic.
MTI's Economic Survey of Singapore 2010 (2011) reported that:
'incremental visitors” - those who would not have come here
if not for the IRs - spent $3.7 billion in the IRs and elsewhere and
created 30,300 jobs in 2010.”
IRs could also stimulate business opportunities in other industries, as the tourism sector will need an increased demand for the services and facilities, from transportation to gift shops. As Hung et al., (2010) observed:
“developing IRs can effectively accelerate construction of
local infrastructure, perfect industrial development, stimulate the
consumer market, improve the living quality and welfare of the local
population, boost overall tourism value, facilitate the diversification
of the tourism and travel industry, and increase national
Singapore Airlines is a good example. Singapore Airline will get benefits from more visitors to Singapore. Moreover, an increased number of casino - goers could bring more passengers to the two regional carriers;Silk Air and Tiger Airways,
which are owned or controlled by Singapore Airline (Banyak, 2008). Service industry got huge benefits from the IR projects. As a MTI report (2011) observed:
“Buoyed by strong visitor inflows, the tourism-related
services sectors also remained robust, with the hotels & restaurants
sector growing by 7.0 per cent. The “other services” industries
expanded by 14.5 per cent, mainly due to an increase in the arts,
entertainment and recreation activities. On a sequential basis, the
hotels & restaurants sector and „other services‟ industries grew by
annualised rates of 9.7 per cent and 2.9 per cent respectively.”
Since the IRs have created more jobs, revenue and business opportunities, they would also stimulate domestic demand of Singapore. In summary, IRs have generated significant economic benefits for tourism and hospitality industry and has boosted overall economy of Singapore.
However, it is just one side of the coin. Due to the opening of legal casinos n Singapore, IRs development has stirred a great controversy among the Singaporeans. Despite the positive economic impacts of IRs listed above, rreligious groups, social workers and local communities have concerns related to the casinos and gambling which include gambling addiction and undesirable activities linked with gambling such as money laundering, illegal money lending and organized crime (Tam, 2009). Many people oppose strongly to the IRs development due to the concerns of the social ills which the gambling will bring to Singapore. They hope the younger generation live in an environment without the influence of the gambling.
Opposition to the idea of IR was not a new phenomenon. Within the government, many officials were against this idea because of the concerns about the negative effects of IRs on the image of Singapore and the gambling related social issues. In 1985 and 2002 the government repeatedly turned downed many proposals to open IRs (Lee, 2004).
People also worry that the negative influence it will have on the family when the family members are addicted to casino gambling. This will destabilise numerous Singaporean families. If the main supporter of the family gets involved in gambling, there is a great chance of becoming irresponsible to meet the need of the family.
In a parliament session, when Minister for Community Development, Youth and Sports (2010) was questioned about the social impacts of the IRs, the minister answered that:
“My Ministry works closely with the National
Council on Problem Gambling (NCPG) to monitor and address
the social impact of casino gambling …There has been a rise
in the numbers, but this is not unexpected. It certainly does not
indicate an increase in problem gambling but only greater
awareness of the help available from NCPG. This is due to the
NCPG‟s public education efforts in publicising the National
Problem Gambling Helpline number through their „Know the
Line‟ media campaign. The increase in the number of casino
exclusions could be due to anxious family members taking
active steps to prevent family members who may already have
gambling problems from entering the casinos. The
Government will continue to monitor the situation with the
introduction of the IRs. Should social problems arise, we will
consider taking steps to address them.”
As a response to these concerns, the government has taken some measures to minimize the negative influences. People have to pay an entrance fee of S$100 or a fee of S$2,000 per year for entering the casinos and the casinos would not extend credit to local population (Lee, 2005).
Despite the concerns outlined before, it is not fair to reach a conclusion that IRs could only have negative effects on social well being. The positive effects which are brought by IR development projects could also influence the Singapore society. A good example is about employment and wellbeing of Singaporeans. Since the IRs has provided many jobs to Singapore, the social problems which are caused by unemployment will be reduced and wellbeing of people will get improved. This will help Singapore to remain as the most stable and safe country in the world.
Singapore is known as a country with strict laws and policies (Hung, 2010) for other misbehaviors, like spit and corruption, legislation is cold and strict. The strict law and order make Singapore one of safest countries but the legalisation of gambling may shake the expression which people have on Singapore.
It is worth noting that to better understand the social, legislation and political impacts of IRs on Singapore, more academic and practical studies are called for to analyze the long term influence of IRs on Singapore society. To date, these kinds of studies are still rare.
3 Potentials of Integrated Resorts to Attract BTMICE Visitors
The potentials of IRs in increasing income from BTMICE visitors are huge.
The potentials of IR to increase income from BTMICE should be discussed with reference to a wider context. The Singapore economy is undergoing rapid economic progress. According to Economic Survey of Singapore 1Q11 (MTI, 2011), economic performance in the first quarter of 2011 was impressive that on a year-on-year basis, the economy grew by 8.3 per cent in the first quarter of 211. The external outlook of world economy is also bright.
In such healthy economic environment, we can reasonably predict that more exhibitions, conventions, meetings and other business activities will be hold in Singapore. The rapid growth of Singapore economy provides enough opportunities for the IRs to attract visitors for these activities.
Singapore as an appealing tourism destination has many advantages to attract business visitors. Henderson (2007) stated:
“Business travelers of different types constitute a key segment,
particularly those attending conferences, and increasing emphasis is
being devoted to healthcare tourism.”
She (2007) also pointed out a variety factors which contribute to achievement of Singapore to attract travelers: heavy investment in infrastructure, product
development, and destination branding contribute
The resorts will be part of tourism products Singapore develop to enhance appeal for business travel, meetings, incentives, conventions, and exhibitions (BTMICE) visitors.
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