The Macau gaming market is “just getting started” despite being worth nearly US$33 billion in gross gaming revenue terms last year, and U.S.-based gaming operator Las Vegas Sands Corp would like to build more hotel rooms in that market.
So said Daniel Briggs, senior vice president of investor relations for the group, reflecting the view of its founder and chairman, Sheldon Adelson. Las Vegas Sands is 70-percent owner of Macau gaming licensee Sands China Ltd.
The investor relations executive’s comments came last week during the 2018 JP Morgan Gaming, Lodging, Restaurant and Leisure Management Access Forum held in Las Vegas, Nevada, in the United States.
Mr Briggs told attendees: “If the chairman were here, he would be talking about building a lot more in Macau… [and saying] Macau is just getting started, and that this business can be even bigger.”
The executive added: “But it is going to need more hotel inventory… we would like to build more hotel inventory besides what we have already announced. We will see if we get permission to do that. We don’t have permission today.”
According to the 2017 annual report of the parent, filed in late January, Sands China had more than 12,500 hotel rooms and suites in the Macau market as of December 31.
In October, the parent said it would renovate, expand and rebrand its Sands Cotai Central property in the Cotai district of Macau into a new resort themed on the United Kingdom capital and to be called The Londoner Macao, also remodelling some existing rooms and creating 350 suites under the St Regis brand. The work is due to be completed by 2020.
Also in October, Las Vegas Sands said it would revamp a mothballed Cotai tower into an additional 295 large-scale suites by 2019. The tower had originally been intended as an apartment hotel, according to previous group filings. The group had originally contemplated generating cash from it via sale to investors of some form of title, according to previous company announcements.
According to a slide included in Mr Briggs’ presentation, Sands China expects to control 35 percent of the four- and five-star hotel room supply in Macau by the fourth quarter of 2020. The company expects to have by then more than 13,400 rooms in its portfolio.
In other commentary during the JP Morgan forum, Mr Briggs said the aim behind the rebranding to The Londoner Macao was to make the current Sands Cotai Central real estate “more of a tourism attraction” for the “base mass” visitors.
These were “the people spending less than US$1,000 on their trip to Macau,” said the executive.
“They probably don’t want to pay for a hotel room, but they do want to have an entertainment experience,” stated Mr Briggs.
“If we can create a ‘visit’ to London – with Beefeaters and the Tower of London… we feel that building potentially has the ability to make far more money than it has made before,” explained the head of investor relations. He was referring first to the pike-carrying, red tunic-wearing guards at the Tower of London, and who are known officially as the Yeoman Warders.
Mr Briggs said that prior to increased competition in the Cotai district, Sands Cotai Central had at its “peak” generated US$1.1 billion annually in earnings before interest, taxation, depreciation and amortisation.
He also spoke about the growing role of social media in promoting the Macau market. Mr Briggs suggested Sands China’s existing collection of iconic, themed buildings – including the Venetian Macao, based on the Italian port city of Venice, and The Parisian Macao, with its scale replica of the French capital’s landmark Eiffel Tower – had the power to generate free, and non-gaming based, publicity for the group. It is forbidden within mainland China – the main feeder market for Macau’s casinos – to market gaming products and services.
Mr Briggs stated: “We have a big team of social media people whose job it is to make sure that folks in China when they look at their cell phone, they see the Eiffel Tower from The Parisian [Macao] or they see something from The Venetian [Macao] . Over time, they will see something from The Londoner [Macao].”
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Macau casino gross gaming revenue in November