Strongly early numbers and performance from Genting‘s Resorts World Sentosa metaresort are fueling bullish sentiment regarding Las Vegas Sands‘ $5.7 billion Marina Bay Sands megalith (above), part of a multi-pronged tourism push. Sentosa did $243 million in revenue and $79 million in cash flow during its first quarter (which would point toward a first-year return on investment of 6.5%). Those initial results were inspiring enough for J.P. Morgan to estimate of Sands’ Singaporean gross gambling revenue to $2.1 billion in 2012, ramping up from a predicted $1.7 billion market share next year. Morgan also pegs Sands’ Singapore cash flow in ’12 at $900 million, or a 16% ROI. While short of CEO Sheldon Adelson‘s ultra-bullish prediction of $1 billion in annual profit, that’d be a return Wall Street hasn’t seen from the gaming sector since, oh, about 1998, when Vegas megaresort budgets began to routinely exceed the billion-dollar mark.
Go figure. While room rates on the Las Vegas Strip are starting to creep back toward (or, in Steve Wynn‘s case, well past) last year’s levels and gambling revenue remains a cautiously optimistic unreliable barometer, it belatedly occurs to me: How on earth does the Nevada Gaming Control Board figure on 2010 seeing a return to 2008 levels of business, as it predicted this week?
After the thoroughgoing disaster — or market correction, if you prefer — that was 2009, it would take a more robust recovery than we’ve seen to date to undo all those double-digit declines of ’09. Simply put, consumer spending is going to have to come roaring back in next two quarters and, from all indicators so far, Middle America is keeping its purse strings tight. Take it from somebody who’s been there: There’s nothing like a personal bankruptcy or comparable financial meltdown to make a born-again fiscal conservative out of someone.
