10,000 duds?

I never cease to wonder at the optimism that Singapore, or more precisely, the people who are in the tourism business seem to display, even in these recessionary times. Mr George Tanasijevich, GM and VP of Singapore Development, Marina Bay Sands Resort (aka the Marina Integrated Resort), wants 10,000 line workers (see also Today Online) to staff his brand new Resort, which is slated to be opened in late 2009. This has given a boost to the morale of the Singapore workforce, and even the Singapore government in these bad economic times. Minister Lim Hng Kiang even went so far as to say that the economy will see recovery in 2 years' time when the IRs are ready. That's a fantastic instance of crystal-ball gazing, but I guess the government has an army of analysts who can make such predictions, and more importantly, realise them. They have both prophets and Gods on their side. How wrong can they be?

I hope that he is right. I am not so optimistic, though. There seems to be an underlying assumption, even at the highest levels of government, that "if we build it, they will come". I am of course referring to the Marina and Sentosa IRs. With the world slipping into the worst recession in 70 years (someone made the calculation back to the Great Depression of the 1930s and early 40s), and with the worldwide stock markets losing near half of their values at their peak, many people's income and investments have taken a direct hit. Coupled with inflation, everybody, except the poor, have become substantially poorer. (You see, the poor have nothing to lose, so they cannot become poorer). Even business travel is going the budget route, via low-cost airlines rather than the full-service ones. Businesses are reluctant to expand, as banks become more guarded in lending. I would have thought that in such an environment, the first businesses that will be hit are the leisure and entertainment business. Businesses may continue to organise events and conferences (hey, you need to drum up businesses when there is none, right?), but the extra expenses, extra stays, the leisure and entertainment part will likely be cut back drastically. You'd probably witness more fly swatting than finger massages. How long this state of affairs will continue no one is predicting exactly nor can do so with any sense of reality. Many are already saying that it will be a long winter. Some are still in dreamland.

So I wonder if the rosy predictions about the tourism in 2 years' time is warranted at all. Why exactly 2 years? Because that's when the 2 IRs will have become fully operationalised - assuming that the Marina IR and LV Sands haven't folded by then. Already, we are getting not-so-rosy news out of Las Vegas that LV Sands may be facing a credit crunch. Its resort and gambling businesses in Macau have also reported poorer results.

On the other hand, some smart people are arguing that the Marina and Sentosa IR will not be allowed to fail because they are Singapore government initiatives. What does this mean? That the government will be forced to throw good money, taxpayers' money no less, into bad investments, like what the US has done? We are talking S$5billion or more here. I hope we do not end up with white elephants again, the last of which were spotted near an MRT station in the North-east of Singapore. If it is does appear, it will be far larger than the ones we have seen.

The thought makes me shudder.

Image source: http://en.wikipedia.org/