Harrah’s Entertainment Inc., which is in the competition to build Singapore’s second casino-resort, needs a strong entertainment partner to rival Genting Bhd.’s Universal Studios, analysts say.
Harrah’s, the world’s largest casino company by sales, is up against Eighth Wonder and Kerzner International Ltd., as well as Genting, which analysts say has the highest chance of winning because of its partnership with Universal Studios.
„Universal Studios is a very strong trump card,“ said James Tan, analyst at DBS Vickers Securities Pte. „Harrah’s needs to come up with something comparable to Universal Studios, and I expect them to excite the market with a strong entertainment partner.“
The four bidders are competing ahead of an October deadline to come up with the best entertainment concept to tap into Asia’s growing tourism market fueled by cheaper travel. The ability to attract leisure tourists is the key criteria for awarding the license, making up 45 percent of the government’s evaluation process.
Tan said he expects the bidders to propose investments of as much as SGD 5 billion (USD 3.2 billion), including the SGD 605 million land cost the government had set on the site on Sentosa, a southern resort island off Singapore’s coast.
Genting, which is Asia’s biggest casino-operator, said last week the Universal Studios theme-park it’s proposing will be bigger than the location in Los Angeles. Eighth Wonder cited the roller coaster in the New York New York casino-resort it built in Las Vegas as an example of family attractions, while Kerzner’s Atlantis in the Bahamas is known for its water rides and the world’s biggest aquarium.
The entertainment attraction is „the crown jewel where you draw the crowd and give them the experience that’s unique in this part of the world,“ Wallace Chu, senior research manager at Savills Singapore Pte, a property consulting company in Singapore. With a well-known partner, Harrah’s and other bidders „don’t need to develop the brand name themselves.“
Harrah’s, which is teaming up with the city-state’s third- largest developer Keppel Land Ltd., has yet to unveil plans for the project and said in a statement it declined to comment on this report. The two companies reiterated their intention to stay in race this week, after their architect Jon Jerde stopped listing the Sentosa project on his company’s Web site.
„I don’t think anything has changed even though they got into the game,“ said Winston Liew, analyst at OCBC Investment Research Pte, whose top pick is Genting. „They’ve not come up with anything that would change their chances so far.“
The Las Vegas-based company failed in an earlier bid for the city’s first casino site, where it had proposed a theme-park created by Hollywood director James Cameron, known for films such as „Titanic.“ Las Vegas Sand Corp., the biggest casino- operator by market value, was named the winning bidder in May.
„Considering the fact that it’s the last license left for a while, participating in first tender does give it a competitive advantage, and they can learn from their mistakes,“ said David Lum, an analyst at Daiwa Institute of Research Singapore Pte. „Their concept has to fly, and it must be compelling for them to win.“