Macau casino operator Sands China Ltd says revenues from the premium-mass segment have already reached half pre- Covid-19 levels. “Premium mass has made a very significant recovery and already approached around 50 percent of pre-pandemic levels,” stated Grant Chum Kwan Lock, the company’s chief operating officer (COO).
Mr Chum also said the VIP and premium-mass segments had “diverged” in terms of recovery. “VIP is still struggling, at around 20 percent or sub-20 percent” of pre-pandemic performance, he added. “The segments are following very different trajectories, and we would expect that to continue for the time being.”
The COO was speaking on Wednesday, during the first-quarter earnings call for the parent, U.S.-based Las Vegas Sands Corp.
According to a Wednesday presentation, Sands China saw its premium-mass gross gaming revenue (GGR) increase 12 percent sequentially in the first quarter of 2021, to US$336 million. The result was about 43 percent of first-quarter 2019 levels.
Mr Chum said the different recovery trajectories had more to do with a “structural change” in the Macau market, rather than an increase in oversight or other external factors. Such structural change had led to “more and more customers dealing directly with casino operators,” he noted.
“All of the operators have attracted more consumers to their premium-mass programmes, and we expect this to continue over time,” he added.
Mr Chum said additionally there had been an increase in the number of what the company termed leisure customers. This had supported a recovery in base mass GGR, and contributed to improvement on non-gaming business during the first quarter and beyond.
“In March, we started to experience a pretty meaningful rebound in visitation,” noted the executive. “That has continued in April. The acceleration is seen across the different segments; the encouraging thing is that since March we’ve seen an acceleration in base mass.”
The executive said Sands China also had “an initial resumption” of activities in its meetings, incentives, conferences and exhibitions (MICE) segment, with some “bookings for the second quarter.”
Recovery, reinvestment
Also speaking on Wednesday’s call, Las Vegas Sands’ chairman and chief executive, Robert Goldstein, said the recovery in the Macau market in April had been “across the board”. “We are seeing a gradual growth, and we believe this will continue to accelerate,” he stated.
The group’s management however stated there was no clarity regarding further opening of the borders between mainland China, Hong Kong and Macau.
Mr Goldstein also said the casino group would be open to investing in non-gaming in the Guangdong-Hong Kong-Macau Greater Bay Area, an initiative of China’s central government, designed to integrate the economies of the three places.
“If the [Macau] government wants us to invest in the region, we will do it. We plan to be there for the long term and reinvest there,” he stated.
A recent research paper suggested the Macau government might seek forms of in-kind benefit other than licence fees and taxation from casino companies that wish to take part in a new public tender process associated with the 2022 expiry of the six current gaming licences in the city.
That might include proposals for investment in the Greater Bay Area, added the paper.
“We continue to believe that something will happen in Macau at some point in the future,” said Mr Goldstein, referring to reinvestment “on a non-gaming basis”.
Las Vegas Sands’ management suggested it was evaluating a wide range of opportunities for the use of the proceeds from the announced US$6.25-billion sale of its Las Vegas assets. Such opportunities included the possibility of increasing its stake in Sands China, currently at about 70 percent.
“It’s definitely something that we think about and consider over time,” said on Wednesday, Patrick Dumont, president and COO for Las Vegas Sands. “We are looking at all the options and we will be very focused on returns.”
In the call, the group’s CEO also said it was “hard to see Singapore return to pre-pandemic levels this year,” as that market requires international travel to recover. “Not having foreign players, is very hurtful [to the business],” stated Mr Goldstein.
