SINGAPORE: Mr Chan Tai Pang, 66, is not your regular punter, but he hit the
jackpot when the two Integrated Resorts (IRs) rolled into town.
Mr Chan's company, Laundry
Network, has been providing services to Resorts World Sentosa (RWS) and Marina
Bay Sands (MBS) over the last two years or so after clinching the contracts in
2009, months before the IRs opened their doors the following year.
Within the first year, his
company's revenue from providing laundry services for RWS hit S$1 million. That
figure has grown to S$6 million a year currently, forming almost a third of its
S$16 million total revenue.
The company also made a combined
S$9 million when it implemented a uniform management system - which sends and
collects uniforms for staff - for both the IRs. Maintenance contracts with
both, for this system, are worth a total of S$500,000.
Correspondingly, Mr Chan grew his
staff by over 50 per cent, to more than 300 currently - with Singaporeans
making up six in 10 of his workers. About 80 employees are dedicated to service
RWS - its biggest client by far.
"It was a big turning point
for this company as we really grew... It is only because of this demand that we
could afford to implement the technology," said Mr Chan. For instance, the
company uses RFID (radio frequency identification) to track the laundry.
It is estimated that the IRs
currently contribute about 1.5 per cent to 2 per cent of Singapore's gross
domestic product, a Ministry of Trade and Industry (MTI) spokesperson said. The
presence of the IRs also supports more than 40,000 jobs throughout the economy,
she added.
Experts TODAY spoke to said that
the IRs' economic performances have met all expectations in terms of tourism
growth and job creation for Singaporeans.
But for all the economic benefits
- tourist arrivals, new jobs, bumper contracts for Singapore companies,
spin-off businesses - that the IRs have generated, the social costs their
casino operations have brought remains a minefield for policy-makers.
And after a blistering
performance in the initial years - helping their parent companies Genting
Singapore (RWS) and Las Vegas Sands (MBS) to record profits - the IRs' quarterly
profits have shrunk in the past months.
With or without the current
economic uncertainties, the IRs appear to have hit their peak in terms of
generating economic benefits to Singapore, experts said.
Las Vegas-based economist
Jonathan Galaviz of Galaviz & Co - which provides economic analysis and
feasibility studies for clients in casino gaming - said: "We feel that the
IRs in Singapore are near their maximum economic output capability - there is
very little orange juice left to squeeze out of these oranges."
He added: "Whether you look
at GDP contribution, employment, or tourism inducement, all these measures
point to the IRs as having already provided their maximum upward value to the
economic dynamic of the country."
An MTI spokesperson suggested as
much when she noted that while the IRs have opened more attractions since their
opening, "we also need to take into account the possibility of the IRs'
novelty effect wearing off".
Businesses rejoice
Since MBS and RWS came to town,
Singapore companies have clinched the bulk of the contracts awarded by the IRs.
To date, RWS said it has awarded
some 750 contracts worth a total of S$800 million to local firms, while MBS
last year engaged Singapore-based companies for nine out of 10 of its contracts
with a combined value of over S$350 million.
For just a single event at MBS,
the orders for Sing See Soon Florist & Landscape can be as many as 456
table flowers, said its Vice-President of Sales and Marketing Gracelyn Lin.
The 90-year-old family-run
business has dedicated one-eighth of its 55,000 sq ft office grounds in Punggol
to store inventory for the IR. It has also hired eight more workers (five are
Singaporeans) and adopted a computerised processing system after the company
grew some 20 per cent in its first year servicing MBS' contracts.
Transport company Sun Gee Travel
runs MBS' airport shuttle service for guests and also sends the IR's overnight
shift workers home.
Its director, Mr Ethan Neo, said the
company has had to hire more than 20 new drivers after it was engaged by MBS.
The company also bought 10 customised luxury buses specially for MBS' airport
shuttle service. The image of his workers has also improved, said Mr Neo,
adding that MBS required his drivers to don smart uniforms and look after the
needs of its guests.
Jobs for Singaporeans
Close to three-quarters of RWS'
13,000 employees are Singaporeans and they take up eight in 10 of its PME
positions. For MBS, Singaporeans make up more than three-fifths of the 9,400
full-time staff on its payroll.
Mr James Tan, 69, landed a job at
the Pantages Theatre in RWS' Universal Studios Singapore - after the former
engineer was turned away by all 10 engineering firms he approached. He had
retired for less than three months when he got bored and decided to return to
the workforce.
Mr Tan said: "Normally if
you are over 50 years old, people say don't bother going for interviews... I
was quite surprised that RWS hired me."
For five days a week, nine-and-a-half
hours each day, he makes sure the premises are clean and orderly and equipment
is working. He also does a spot of ushering. Although his pay is not as high as
he used to get at his previous job, Mr Tan said the increments he got from RWS
have been "quite reasonable" and the bonus has also been "quite
substantial".
The unique experience some jobs
in the IRs offer was what made Ms Angeline Foo, 33, leave the teaching
profession after 13 years.
The education manager at MBS'
ArtScience Museum creates information material about exhibitions and customises
tours and workshops to different groups of visitors, such as schoolchildren.
For instance, she had to design a
workshop for students that ties the Titanic exhibition the IR had with the
school's "English Language Week" - Ms Foo centred it around the
ship's postal services.
She said: "It's difficult to
find the same combination of work I do here elsewhere. It's really exciting and
challenging because there's more exposure - it's not just physics and
mathematics, there's Andy Warhol and Titanic - and you also have to customise
the experience for different visitors."
Economic benefits vs social costs
A gaming analyst, who declined to
be named due to company policy, said there is more room for the IRs to grow -
if the government is inclined to let the IRs expand.
Pointing out that the MBS is at
99.8-per-cent hotel occupancy, he said: "If Singapore's largest hotel is
at the highest occupancy, then it means that if we want to grow the business
and create more jobs, more hotel rooms and facilities built around the IRs can
do it."
The analyst added that opening up
the junket market "a lot more" is another possible way to grow the
pie.
Any discussion on the economic
benefits generated by the IRs has to involve the social costs of the presence
of the casinos. There is no doubt that Singapore has experienced "higher
levels of social costs" because of the IRs, said Mr Galaviz.
"The question remains
whether the economic benefits of the IRs outweigh these social costs - it is a
question that probably can never be answered," he added.
Member of Parliament Seah Kian
Peng, who chairs the Government Parliamentary Committee for Social and Family
Development, stressed that economic benefits are "just one part" of
the equation. Adding that the social costs need to be continually monitored, he
nevertheless said: "The non-casino business has been quite good and has
created a lot of value. If it can create jobs, without the ills, then they
should bring in more of that."
As the IRs become a mainstay of
the Singapore economy - reaping the rewards as they provide another leg for the
slowing economy - Mr Galaviz said: "It will be important for the citizens
of Singapore to put direct pressure on the executive management of the IRs to
take social responsibility to the Singaporean community more seriously, rather
than just pressuring the Government to do so on their behalf."
Teo Xuanwei
Business & Investment Opportunities
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