Sands China Ltd chairman and chief executive Sheldon Adelson on Thursday said the company had submitted an application to the Macau government to build a 2,500-room non-gaming project, reports online portal MacauNews, crediting local media sources.
Mr Adelson (pictured) revealed the scheme during a public presentation at the Venetian Macao on the work of Sands China Academy’s ‘Local Talent Development Programme’.
Mr Adelson said that while his company was offering a range of different levels of accommodation in Macau, there were not enough rooms in the city to cater for large groups of meetings, incentives, conventions and exhibitions (MICE) visitors.
“One of the problems is we can’t bring in big healthcare groups…here because there aren’t enough rooms,” Mr Adelson reportedly said, referring to events with potentially as many as 25,000 delegates.
“We’re building The Parisian, although the rooms will be four-star size, we’ll be selling them at three-star prices. That’s what the Macau government wants. We’ve submitted a request to build another building of 2,500 more rooms, non-gaming,” he added.
The Sands China chairman did not, according to the MacauNews report, give more details of where the proposed new building would be located.
A Sands China spokeswoman told GGRAsia by email: “Please note the company has no additional comment”.
The Parisian, on Cotai, is the firm’s current construction project. It will have a scale replica of the Eiffel Tower and other French-themed attractions.
Sands China’s parent Las Vegas Sands Corp said in its fourth quarter 2014 earnings conference call in January that The Parisian would have “more than 3,000 rooms”. Mr Adelson, who is also chairman of the parent, said at the time that the US$2.7-billion resort would open “some time” in 2016.
Morgan Stanley Asia Ltd stated in a report on Tuesday that the market consensus among investment analysts currently was that six new Cotai projects under construction by the six current Macau concessionaries – and the 12,000 new hotel rooms linked to them – would bring incremental visitors, and hence boost gaming demand, especially for the mass market gambling segment.
But the Morgan Stanley team – consisting of managing director Praveen Choudhary and analysts Alex Poon and Thomas Allen – said the firm’s research noted the potential for negative surprises in the Macau market on the rooms issue.
“[The] Number of [Macau] hotel guests dropped by 9 percent in the first two months of 2015,” it said, citing intelligence from CEIC Data and figures from DSEC – Macau’s Statistics and Census Service – and Morgan Stanley Research.
“This could mean that hotel demand is not unlimited. [The] Opening of 1,400 new rooms by Galaxy could result in cannibalisation and promotional war,” Morgan Stanley stated, referring to the opening of Galaxy Entertainment Group Ltd’s Galaxy Macau Phase 2 and the neighbouring Broadway Macau on May 27.
But the Morgan Stanley team also noted that a potential positive is that extra hotel rooms might help increase overnight visitors to Macau, thus “improving the customer mix and spending per visitor for the mass segment”.
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Alex Poon and Praveen Choudhary
Analysts at Morgan Stanley