Monday, May 22, 2006

[RealEdge] TodayOnline : Sentosa rises beyond Fantasy


  This story was printed from TODAYonline
 
 
  Sentosa rises beyond Fantasy

After several false dawns, the isle is finally turning around

Monday • May 22, 2006

Val Chua
Assistant News Editor
val@newstoday.com.sg

LUXURY yachts, Russian tourists, hip restaurants and award-winning museums aren't exactly the first images that pop to mind when you mention Sentosa.

But that's exactly how the 33-year-old island is panning out after a series of facelifts that started in 2002.

The once-sleepy island is waving its past disappointments goodbye as its $8-billion makeover to revive its fortunes finally takes shape.

Taking stock of the revamp as it passes its halfway mark, Mr Darrell Metzger, chief executive of the Sentosa Leisure Group (SLG), told Today: "It's been a long struggle to convince people to come here for recreational purposes."

But now, overseas tourists soak up the sun alongside local beach-lovers, while some 40 luxury boats berth at its new marina, in wait for the first residents of Sentosa Cove to move into the island in a couple of weeks.

The pièce de résistance will be the integrated resort-and-casino, which some five bidders are now eyeing.

Island life wasn't this exciting just four years ago.

When Mr Metzger first came on board in 2002, he was handed a mammoth task by the board of directors: Execute a 10-year master plan to bring new life to the island.

Not easy, since there had been no major development on Sentosa since 1996.

"There was a period of silence. For six years, we didn't have any private investors coming in. The biggest risk was that they would stay away. We had to convince them we knew what we were doing," he said.

And so began a series of nips and tucks — such as reducing the entry price from $6 to $2 to draw in the locals and going on a "house-cleaning" trail of the island.

Said Mr Metzger: "The raw elements on the island were there, it's just that some were not working. Our belief is that if we were walking around, and there was something we were embarrassed to show people, it had to be fixed or removed."

For instance, former military barracks can't be removed — by virtue of their conservation status — so four "terribly old buildings" were restored to house some 400 students at the Tourism Academy.

Where new hotels sprout up, they must be nestled among the untouched greenery, which occupies 70 per cent of Sentosa.

On the drawing board, public attractions were kept on one side of the island, while exclusivity reigned on the other — home to the marina and Sentosa Cove, which will have a total of 2,600 homes when fully built.

Money-losing attractions were also told to shape up or ship out.

"Twenty tenants left within the first two, three years. Some were not making money and really wanted to leave. Some didn't have the will or financial resources to upgrade and bring it to the standard that we wanted," added the 59-year-old American.

Some attractions are making a comeback — on a grander scale.

On the original sites of the Asian Village and Fantasy Island — two spectacular flops — will stand the proposed IR, which is likely to host a theme park.

"Singapore has never had a good theme park. Typically, you can't build a theme park for under US$300-US$400 million ($475-$635 milion). Singapore never had a theme park in that category — and that's not a Disney or Universal Studios theme park, that's a grade below that," he said.

What is important is that the theme park, like the resort, must never stop throwing up new surprises, he said.

Citing Hong Kong's Ocean Park, which he used to head, he said: "They had a plan that stopped in the late '90s. They just stopped developing. With a theme park and a resort, you can't quit developing. It doesn't mean you need more land. But you need to put in new things. Every year, you need a reason for people to return."

And the momentum shows that he has hit the right buttons.

"We have turned away private investors who wanted to build attractions, hotels, convention facilities, retail outlets. We told them we don't have any more space, or any more buildings to renovate," he said.

The turnaround can best be shown by the fast-forward of Sentosa's revamp — the 10-year schedule has been cut by two years, to end by 2010.

The group received a net surplus of $75 million in its last financial year, on record revenues of $260 million.

The profits go back to the upgrading of the island, such as the $140-million Sentosa Express, an upcoming light rail system, said Mr Metzger.

Describing SLG as a "self-sufficient statutory board", he said Government funds only comprise 5 to 10 per cent of the total investment of $8 billion in Sentosa's revamp.

"We are operating Sentosa as if it's a privately-run resort," he said.

For now, the island will continue courting the high-yielding foreign market, which formed 42 per cent of its 5 million visitors last year.

Russia, in particular, is a "great market", he said.

"We are fairly well known there. From the dollar-stand point, Russians are already outspending everyone right now. They typically stay for 10 days. Russians are worth about 10 other tourists," said Mr Metzger.

Although resort operators traditionally view locals as the "easiest, quickest and cheapest" market to woo, Mr Metzger is finding out that some age-old prejudices run deep.

"There are people who haven't been here for 10 years; they still remember the days when it costs $15 to park or a bad experience. It's a tough market. It's not very forgiving. You do it wrong once, and they will go home and tell 10 other people about it," he said, chuckling.

He now has 12 employees dedicated solely to upping service levels. And he intends to finish what he set out to do.

He said: "There wasn't any discussion, even during Sars, to hold off our development. If you don't believe in something, don't start it. We stuck with it."
 
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