Sands China executives said Thursday they are confident that the company’s capital commitment of up to US$4.5 billion into Macau over the next 10 years, most of which will be for non-gaming attractions, can generate positive returns.
The commitment, which guarantees spend of at least US$3.8 billion but would rise further should market-wide GGR reach certain annual milestones, formed part of the new concession contract Sands China signed with the Macau SAR Government late last year.
Parent company Las Vegas Sands provided further detail on that commitment as part of its 4Q22 results release yesterday, noting that 92% of its initial US$3.8 billion commitment would be on non-gaming attractions.
These are to include expansion of MICE facilities at Venetian Expo, themed attractions Including a new garden-themed attraction in the current Le Jardin (Tropical Garden) adjacent to The Londoner, investment in upgrades to entertainment facilities and investment in new F&B and Health & Wellness amenities. Sands China has also promised to invest in increasing international visitation, sporting events, entertainment, arts and culture, and community tourism.
Asked if it would be able to achieve return levels commensurate to recent projects in Macau, Chairman and CEO Rob Goldstein replied, “You’re talking to a bunch of people who have been doing business in the country for 20 years, and we’ve seen the returns. We’ve seen what non-gaming can do.
“Our theaters, our retail, our entertainment has driven billions and billions and billions of dollars of EBITDA, and they will in the future as well.
“We have no concerns whatsoever about investing and getting a solid return on non-gaming commitments. All they do is drive more visitation to the market. They are additives to the market and are certainly going to drive more business right now.
“We look at this as a 10-year starting commitment and going beyond that. Our commitment to Macau is as long as we can be there. And so, we have no hesitation to invest or show the market a very, very considerable return. Just look at what we’ve done in the past, on our current assets which are mostly non-gaming.
“The lion’s share of our investment in Macau is non-gaming, the great majority. It’s worked out pretty well for us so we think next 10 years, we’ll continue that trend, and we’re very happy and very committed to Macau.”
As reported by IAG, LVS told analysts during Thursday’s earnings call that it was already profitable again with volumes and revenues since reopening comfortably exceeding raw visitor numbers.
