Grounding the SingaporeFlyer
When the concept of the Singapore Flyer was first announced, I wondered what sort of attraction one could see 160metres high above Marina Bay. Look south, and all we will see are various oceangoing-ships at anchor. We look east, and we just might be able to see planes leaving Changi Airport. Look West, and we'll see signs of Singapore's economic muscle in the container business, and the huge CO2 emitter that is our Petro-chemical plant called Jurong Island. Look north, and we'll get a nice view of the Skyscrapers, and possibly a view into the heart of Singapore. Apparently, according to a Wikipedia entry, a 'flight' on the Singapore flyer is expected to cost around S$27.50.
The London Eye, on the other hand, cost me £13 (S$40) back in 2003. What the flight gave one the opportunity to see was London, and all 800 years of its development into the capital of the United Kingdom. In a sense, it was boring - all around, you could see were lots of typical english housing roofs, stretching for as far as the eye can see, a testament to London's long history of civilization.
It was fun to see the various railway lines snaking into the huge train stations, and watching trains come and go. And to look at the various statements of each generation, in examples such as London's Gherkin, and the Millennium Dome. The flight was over too quickly, and I longed to watch the trains go all day from literally a 'bird's eye view' of London.
Insulted by many, and initially only given a 5 year planning approval, The LondonEye is now one of London's top attractions, and if you want a overview of London, a trip up the London Eye has no substitute. (except a Helicopter flight over London maybe.)
Unfortunately, for Singapore, our inability to really create complementary planning has enabled us to score an own goal for the SingaporeFlyer even before it boards its first passenger. That is the Marina Bay Sands. With the Singapore Government accepting the Las Vegas Sands bid, it seems, a perfect substitute for the SingaporeFlyer has shown itself.
The planning proposal indicates that "A 1-hectare Sky Park at 50th storey (above the three hotel towers ) offering panoramic views " is part of the offering from the Marina Bay Sands. Now, I could be wrong, and "Location, Location, Location" holds true that the real estate the Singapore flyer sits on will never be the same as the one Marina Bay Sands sits on, but looking at this particular picture, and imagining where the Singapore flyer will be, most economists and real estate professionals will be hard pressed to say that the experience offered by the SingaporeFlyer's has NO substitute.According to Yawningbread, he says that the Sky Park will be a 'public park', which means no entrance fees(?!). I cannot conclude that it will be a public park from either STB, and the LasVegasSands website fails to load (on both IE and Firefox) , so the question remains open, but I do doubt that it will cost S$27.50 to enter the Sky Park, unless the operators are perfect collusionists with the SingaporeFlyer firm.
So, I guess, the most important questions for investors of the SingaporeFlyer now are:
- When will I ever recoup my multimillion Singapore Dollar investment?
- Is s$27.50 still viable given the presence of a near perfect substitute less than 1 kilometre away, and possibly with free entry?
- Why didn't I put in my contracts a no-compete that Singapore was not allowed to approve any development that could create a near-perfect substitute for the x-years?
- Is there any way of getting compensation for the loss of revenue a-la when Singtel was "forced" to give up its "telecommunications" monopoly early?
- Arrrrrgh!!!!!!!
Way before the Marina Bay Sands was confirmed, back in 1999, I already felt that it would be difficult for people to want to take a trip up an oversized Ferris Wheel, when half of the view was just empty sea. Now, with a near-perfect substitute, I think the SingaporeFlyer will become a perfect business case study on business uncertainty and the failure of vision.
Anyone with investments related to the SingaporeFlyer best be calling his broker now or consulting his online brokerage web site?
posted by KiWeTO at 9:05 PM
7 Comments:
You might be right, but then again, you might be wrong. The basis of your argument is the view and the price. But these are subjective criteria based on your own preferences.
Firstly, different views appeal to different people. What does not appeal to you might to others.
Secondly, and I think this is where the price justification is weak, the sensation of moving in mid air is far more exhilarating that standing on "solid" ground, albeit, fifty stories above actual ground level.
Lastly, there is a difference between having to walk along the edge of a park in order to capture and view and just looking up, down, sideways in get an instant panoramic view.
I guess it boils down to the target markets for each attraction and that's where perhaps the figures are still uncertain.
Hope you don't mind but I have Tomorrowed this article for discussion.
Hi,
I have no doubt that different people have different preferences. Just that given the fact that it will be very much substitutable in terms of the view, the projected prices used in determining the financial viability of the Flyer will now be very much in question.
Its a situation like the one the Eurotunnel now faces. Huge debt writeoffs by banks because the original estimates of passenger traffic levels were found to be not much lower when actual traffic started.
E.o.M.
I like your analysis because you put the SingaporeFlyer in relation to its surroundings, which we/I tend to forget. However, taking the relationships further, the presence of Sands itself would mean there is kind of a captive crowd staying at the Sands who might have the power/interest to spend on the ride. The ride can be bundled into the stays at the Sands even? Also, London Eye is partly sponsored by British Airways, so SingaporeFlyer might be able to achieve lower ticket prices if more sponsors come along?
It's hard to beat cheap, and I agree that high ticket prices can put people off (for example: the reverse bungee). The way for SingaporeFlyer to proceed is to be better, not cheaper than cheap. I guess there will be pods like on the London Eye? Those will offer privacy unlike in a public park. Privacy for couples, or privacy for corporate events that a public park can't have.
I meant to say "it's hard to beat *free*"
Hi Fabian,
I've had the opportunity to go up on the London Eye; No, there isn't any privacy either as groups of about 20 are bundled into a pod, taken up and down, and off. The wheel does not even stop moving, so its a continual operation.
I guess if you really wanted to hold a private party for about 20 at the top, you could pay the hundreds of thousands to book the SgFlyer for 3 hours... then you realize that the pod is really too small for 20 people to socialize, and realize some penthouse restaurant can be a much better substitute.
Just wanting to put down for the record that the Flyer is a strategic mistake; SG is making too many strategic mistakes in all sorts of arenas that will come back to haunt us.
(hmm... no need to worry about reserves being whittled down... they already are being destroyed by Temasek Holdings.)
E.o.M.
Well, whatever strategic mistakes we make, nothing beats STB's sanitization of China Town.
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