Inside Asian Gaming

20 (-) Tom Arasi President and CEO Marina Bay Sands Pte Ltd Tom Arasi is the first President and CEO of Marina Bay Sands, the US$5.7 billion integrated gaming resort created in Singapore by Las Vegas Sands Corp (LVS). In the nine months from his appointment in August 2009 to MBS’s ‘soft’ opening in April this year, Mr Arasi faced an intense examination of his leadership skills. There was a very great deal to do, in a very short amount of time. That pressure on the final phase fit out was due to several factors, including difficulties in earlier stages of construction. That’s not uncommon on big projects, but there were other factors unique to MBS. One was that the reclaimed land on which the property is built required a lot more real estate being pumped into the earth to stabilise it than the company or the designers had anticipated. That increased costs and caused some delays. A second was that the design—with its three 55-storey hotel towers topped by Sands SkyPark, complete with swimming pool—is so revolutionary there was no manual written indicating how hard it would be to complete or guaranteeing how long it would take. Third, with LVS’s global long term debt standing at US$11 billion at the beginning of 2010, there was pressure from the company’s bankers and institutional shareholders to start generating revenue from the enterprise quickly. Fourth and by no means least, the Singapore government was expecting the property to launch as close to the original 2009 timetable as possible in order to fulfil its function as an attractor of tourists to the city state. When all those circumstances are considered, it’s a wonder Mr Arasi himself is still standing. It also puts into some wider context the technical glitches that occurred between the soft opening in late April and the gala opening in June. Mr Arasi could, however, have done without the bad publicity generated by a group of early, unhappy and potentially highly litigious MBS hotel and conference guests—lawyers from the Inter-Pacific Bar Association. It would be fair to say it’s unlikely many of them will be writing glowing reviews on tripadvisor.com . Since then, theallegedproblems—includinga leakingconference hall roof, plus non-functioning air conditioning and lack of hot water in some hotel rooms, have reportedly been solved. That’s important. It would be overstating the case to say that the fate of LVS depends on a successful launch for the property. It is fair to say, though, that the way MBS performs will have a major long-term influence on the company’s share price and global earnings potential. The key driver of MBS’s earnings is expected by analysts to be the 161,000 sq. ft casino and its accompanying VIP rooms. The company said MBS generated US$94.5 million of adjusted property EBITDA (earnings before interest, taxation, depreciation and amortisation) on an EBITDA margin of 43.7% in the stub quarter from 27th April to 30th June. Mr Arasi comes from a hospitality rather than gaming background, so it will be interesting to see what his experience can bring to the bottom line in driving gaming and non-gaming sales. In Macau, LVS also hired non-gaming people to develop and run The Venetian Macao. Stephen Weaver has a background as a property lawyer, and Steve Jacobs, the former CEO, was a management consultant. One of the reasons for hiring all three was probably their grasp of strategic issues. In Mr Arasi’s case, he previously led three international businesses for Bass Hotels and Resorts (which trades as InterContinental Hotels). His roles included serving as Global Brand Manager of Crowne Plaza Hotels and Resorts and as President of the group’s Americas division.