Macau casino operator Sands China Ltd should have up to 89 percent of its hotel rooms available by the end of the second quarter, as staffing constraints ease, compared to circa 70 percent in the first quarter, says Grant Chum, the firm’s chief operating officer.
He was speaking on Wednesday on the conference call following the first-quarter earnings announcement of the parent, Las Vegas Sands Corp.
Approximately 3,800 rooms – about 31 percent of Sands China’s total portfolio – were out of service in the first quarter, “due to labour constraints”, the parent company had mentioned in an earnings presentation issued along with its first quarter results.
Macau had seen some shrinkage of its tourism-sector workforce during the three years of the pandemic, affecting areas such as the hotel and food and drink sectors.
Mr Chum stated on the call regarding the staffing situation: “It did improve somewhat in March as the additional hiring of the labour came on board, and the Macau government and the Labour [Affairs] Bureau have been very supportive in helping us to bring on the labour that we need to operate, especially the hospitality side of the business, the hotel and restaurants.”
“We would expect that, on average, second quarter, we can reach 10,700 rooms in terms of operating capacity. So that’s roughly 3,000 additional hotel rooms,” he added.
The Sands China COO observed, referring to peak room inventory: “We will reach the 12,000 probably some time in the third quarter, in time for the summer peak season, as additional hiring and training completes through the second quarter.”
The executive also talked about the structure of the tourism market for his company and for the city as the post-pandemic recovery continues.
Mr Chum stated, referring to the mainland China province next door to Macau, that the city was seeing “a much faster recovery from Guangdong” than from other mainland provinces. “I think that’s for obvious reasons: the proximity, the ease with which the visitors from the neighbouring province can get to Macau.”
Though he added: “I think the biggest impediment to a higher rate of recovery in non-Guangdong visitation is actually the amount of hotel room inventory that was unavailable in the first quarter.”
He referred also to transport infrastructure challenges relating to Macau’s second-largest individual market for visitors: neighbouring Hong Kong.
Mr Chum stated: “Transportation is still only a fraction of what it was, especially in routes like from Hong Kong to Macau,” with ferry capacity “only 20 percent” during the first quarter of what it had been in 2019.
Overseas clients, direct VIPs
His boss Robert Goldstein, chairman and chief executive of Las Vegas Sands, mentioned on the call that a pleasant “surprise” for the quarter, was the visitor volume from outside China, including high-value players.
“I think the first quarter is indicative that there is a VIP market. Our rolling volumes indicate that,” he stated.
Mr Goldstein said: “It makes sense to me. The quality of product there [in Macau], the diversity of product, the experience… it’s an exciting place to visit, easy to access, getting easier, especially for foreigners. So, I think that’s going to continue to build.”
He added, referring to house-managed VIP play, rather than the traditional junket format in previous years: “Macau, I think has a better future in the direct rolling business that I anticipated.”
Mr Chum observed that the group was “redoubling” its assets post the concession tender in Macau, to bring more international visitors to the city. “The VIP gaming was the first natural place to start, given that the general airlift, commercial air flights are still a fraction of where they were in 2019,” he noted.
He added: “I think this direct VIP performance was very healthy during the quarter and kept growing.”
Patrick Dumont, president and chief operating officer of Las Vegas Sands, also gave some commentary on the call, regarding its Marina Bay Sands property in Singapore, and the outlook for the mainland-China customer market there.
He stated that despite the easing in mainland China, early in January, of Covid-19 measures, there had “not been a huge influx” of mainland Chinese to Singapore in the “early part of the quarter”.
But he added that with the expected increase in flight capacity in the post-Covid recovery period, “we’re very bullish on the opportunity of outbound tourism from China to support Marina Bay Sands”.
(Updated 10.36am, April 20)
