While tourism receipts exceed 2019 levels, inflation and a strong dollar may deter regional tourists from China, India, and ASEAN.

Singapore's tourism recovery is likely to remain stunted, as YTD international visitor arrivals (IVA) reached only 88.1% of 2019 levels despite a strong start in early 2024.

CGS International (CGSI) stated Singapore's tourism landscape is heavily reliant on meetings, incentives, conferences, and exhibitions (MICE) events rather than attractions, and with no major events scheduled, international visitor arrivals (IVAs) will struggle to return to 2019 levels by 2025.

While tourism receipts have surpassed 2019 levels since 3Q23, CGSI warned that inflationary pressures and the strong Singapore Dollar could price out regional tourists, particularly from China, India, and ASEAN countries.

Meanwhile, it expects VIP volumes to remain subdued amid slowing IVA recovery amid declining gaming revenues at both Marina Bay Sands (MBS) and Resorts World Sentosa (RWS).

Furthermore, CGSI emphasized GENS's strong net cash position of over S$3.6 billion, supporting an annual dividend payout of 4.0 Singapore cents.

It noted GENS's EBITDA is sufficient to cover near-term capital expenditure of approximately S$1 billion for RWS 2.0 upgrades.

"It is currently trading at 6x forward EV/EBITDA, below its historical mean of 9.4x, which we think reflects subdued tourism recovery in Singapore, but we expect GENS's to undergo a mend in its profitability with the subsequent opening of new facilities for RWS 2.0 through 2030F," it stated.