Las Vegas Sands Q4 2021 Earnings Call Transcript

Quartr
Provided by Quartr
January 26, 2022

There are 13 speakers on the call.

Operator

Good day and thank you for standing by and welcome to the Las Vegas Sands 4th Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker for today, Mr. Daniel Briggs.

Operator

Thank you, sir. Please go ahead.

Speaker 1

Thank you. Joining me on the call today are Rob Goldstein, our Chairman and Chief Executive Officer and Patrick Dumont, our President and Chief Operating Officer. Also joining us on the call are Grant Chum, our Chief Operating Officer of Sands China and Doctor. Wilfred Wong, who are about to get connected, And apologize for starting late. Before I turn the call over to Rob, please let me remind you that today's conference call will contain forward looking statements We are making under the Safe Harbor provision of federal securities laws.

Speaker 1

The company's actual results could differ materially from the anticipated results in those forward looking statements. In addition, we may discuss non GAAP measures. The definition and the reconciliation of each of these measures to the most comparable GAAP measures is included in the press release. Please note that we have posted Please note that this presentation is being recorded. With that, let me please turn the call over to Rob.

Speaker 2

Thank you, Dan, and good afternoon and good morning to our colleagues in Asia. A very good morning to our colleagues in Asia. Thank you for joining our call today. We'll have some brief comments and then we'll go right to Q and A. Our results continue to reflect the pandemic's impact, Travel restrictions continued to affect visitation and our financial results in both Macau and Singapore this quarter.

Speaker 2

We did generate some positive EBITDA for the Quarter in both markets. We remain confident in the eventual recovery in both Macau and Singapore. The good news in Singapore is the travel restrictions or Travel Carters were established with many important source markets during the quarter. Indonesia, Malaysia, South Korea, Australia, Thailand We're all part of the initial rollout of the DTL program. And obviously, emergence of omicron variant impacted the DTL program In late December, the VPLs should contribute to a more robust recovery over time.

Speaker 2

Our confidence And the long term opportunity in Singapore remains deep, and I'm pleased to announce we've embarked on a $1,000,000,000 U. S. Renovation project at MBS that will introduce luxurious new suite product into the resort. The program We'll meaningfully expand our room to fleet offerings and significantly enhance our appeal to premium customers. In Macau, the Londoner is near completion.

Speaker 2

As the market recovers, both the Four Seasons and Londoner will provide growth opportunities, material growth opportunities in both the premium and mass customer segments. We continue to have the largest footprint in the world's greatest market for CAL and appreciate the opportunity to provide input in the We look forward to participating in the retendering process as it proceeds to fruition. Customer demand and spending in Macao have proven resilient at the premium mass level from both a gaming and retail perspective. It's outlined, I think on pages 29, 30 in your deck. We continue to have great optimism about our ability to perform to pre pandemic levels Once visitation returns, you may know our company is divided primarily into 3 material areas, the most important being Asia, the portfolio in Macao and Singapore.

Speaker 2

We remain confident we will return to strong positive cash flow in both Macau and Singapore in the future as restrictions are eased and travel and tourism recover. The sale of Las Vegas creates liquidity and optionality as we pursue additional large scale land based destination resorts in the U. S. And Asia. And we continue to build our digital presence.

Speaker 2

We're exploring multiple opportunities at this time and we'll provide some color at the appropriate time. So let's go to your questions and thank you for listening.

Operator

Your first question comes from the line of Joe Greff with JPMorgan.

Speaker 3

Good afternoon. Good morning, everyone.

Speaker 2

Hi, Joe.

Speaker 3

Rob, Patrick, let's start off on the topic of capital return And how you're thinking about that, particularly in light of $5,000,000 in gross cash proceeds coming in, in a couple of months. Does that cause you to rethink that capital return is more of a near term event or do you really need To see a recovery in both Macau and Singapore before you initiate some sort of capital return. I know you mentioned liquidity optionality for new jurisdictions in the U. S. And Asia, And that's part of the calculus.

Speaker 3

But if you can refresh your thinking on capital return, I think that'd be helpful for us.

Speaker 2

Patrick?

Speaker 4

I'm happy to. Yes. Hey, Joe. I appreciate the question. I think we've been pretty consistent in our thinking.

Speaker 4

It's been part of our long term strategic plan, how to create additional capacity to really grow this business. Sheldon has really started from the beginning, as you know, you followed us since day 1, That he's really been a developer of large scale projects. And I think that ethos continues today within our company. And I think we're very excited about some of the opportunities that we have in front of us. Rob and the rest of the development team and our entire group has been working very hard.

Speaker 4

It's great opportunities to grow with large scale development in the future. I think the way we see the capital that's going to come into our system from the consummation of Vegas sale is really to grow the business. As we've always said before, the dividend and share repurchases really does do represent a part of our shareholder return strategy, the dividend being the cornerstone. We're looking forward to the opportunity of restarting the dividend program. But as we said, and I think we've been consistent about the idea that we really want to see a steady return to operational cash flow, Understanding what those cash flow levels are from a trajectory and call it a sensitivity scenario perspective and then make an assessment about the proper return of capital at that time.

Speaker 4

We really view the dividend as something that needs to return on a stable and long term basis. And so that's something that we'll look to do when our cash flows return and we get out of pandemic operations, unfortunately during this quarter we were still in.

Speaker 3

Great. That's helpful. And then maybe the gentleman from Macau can chime in on my follow-up question. Just a clarification on the draft bill, on the amendments to the gaming law. Can you talk about how The government's thinking about you and others in the market maintaining specific levels of gross gaming revenues in order to maintain your table count.

Speaker 3

Can you talk about how they're broadly or specifically thinking how this will work and what the broad framework is here? And that's it for me. Thanks.

Speaker 2

Grant, are you there?

Speaker 5

Yes, sure. Thank you for the question. I think the amendment to the gaming law is still in work in progress. It's working its way through the legislature. We need to wait further details In terms of the final form that the amendments would take, and there will be additional regulatory measures that will be potentially issued Thereafter.

Speaker 5

So in general, to your question, we've always efficiently used our table allocation. And in general, we welcome the direction of linking table allocation with productivity, but specifics I think are yet to be outlined. Thank you.

Operator

Your next question comes from the line of Carlo Santarelli with Deutsche Bank.

Speaker 5

Hey, guys. Thank you. Good morning, Rob.

Speaker 6

Ram, maybe if you could kind of shine some light. I know Singapore, obviously, it was kind of A tale of a couple of months, but as you see things starting to normalize over the course of the period, could you comment a little bit about How you felt during the better periods of the quarter as it pertained to restrictions and stuff like that when some of them were more loose?

Speaker 2

Yes, we were very excited to see when there's rays of light and you can get in and the VTL is established, it was extraordinary. And I think it indicates it's a real predictor, thought of what's going to happen that place opens back up. Hopefully, we see it in the first half of the year. Clearly, demand is going to be there. The VTLs, the government's thinking is very positive for us.

Speaker 2

I think Singapore probably gets there quicker than I think Macau might be later, but citing Singapore, the demand is clearly evident When the VTLs were open, it's a shame. I think we had a real positive momentum going and they got crushed by the Omicron concerns. But I think that's just inevitable. The markets around us, I mean the important source markets are opening up Japan, Korea, Indonesia, Malaysia all improving. So we have a lot of hope to see a big bounce in Singapore.

Speaker 2

I would like to reference we had some Non recurring income in that quarter you should be aware of. Patrick, can you eliminate just we're clear on the numbers on the second and fourth quarter?

Speaker 4

Yes, of course, happy to do it. And Carlo, thanks for the question. One thing we did want to highlight is that we were positively impacted by $70,000,000 of non recurring items during this quarter, including bonus reversals, job support scheme and some other items. So I wouldn't look at this as a run rate quarter. I think I would point you back to some of the comments that Rob made on some of our prior calls about that run rate envelope during these conditions, call it the $500,000,000 run rate EBITDA context.

Speaker 4

The real problem is things have kind of been switched on and switched off so much, it's hard to get a real read on the quarter. I think what is really encouraging is the vaccine travel The public health posture of the government, which really has been a leader in both vaccinations and the way they approach public health, and we're very encouraged about their approach towards long term tourism. And we're very excited to see how that plays out in the upcoming quarters. But I think overall the vaccine travel lanes were a big step.

Speaker 6

Great, Patrick. Thank you. That's helpful. And just one point of clarity, that $70,000,000 was that all in the EBITDA results for the quarter?

Speaker 4

It was. It was. That's why I referred back to the run rate that we talked about previously.

Speaker 7

Yes.

Speaker 2

Thank you, Bob. We've referenced $500,000,000 run rate. So things get better over there, until these travelings become real, we're still in the same range as our point not to get over exuberant about the 170 that it was. It is impacted by nonrecurring. Okay.

Speaker 1

Thank you, guys.

Speaker 2

Thank you.

Operator

Your next question comes from the line of Robin Farley with UBS.

Speaker 8

Great. Thanks for taking the question. I was wondering If you could talk about, you said for a while you're evaluating online gaming and sports betting options and there's been a little bit of a change in valuation Over the last year, can you talk a little bit about how kind of what your current thoughts are and how that may be impacted by changing valuations?

Speaker 2

Yes. I think we've said in the past, we've always been interested in digital and all these interests that's happening in the market. But two things are happening at the same Our business, I think, is coming back to a stronger place. I think 2022 finally, especially in Singapore, and I think as well, Macau will see that getting better. Our balance sheet speaks for itself and we've all followed what's happening in the digital equities and the struggle there.

Speaker 2

So I believe there will be a day when sports betting and iGaming are very successful businesses and we'll continue to look at the opportunity. We'll wait patiently. It hasn't been a bad idea to wait for the last 6 to 8 months to see how this shakes out. There's been a lot of blood spilled, but I think we'll continue to evaluate is there an entry point that makes sense for LVS. We remain consistent, Rob, as you know and you've known for years, our bread and butter is still going to be Asia land based As we will make you can't replicate a $5,000,000,000 business, which we think will come back in place in next year or so.

Speaker 2

So that's our first order of business and making sure our balance sheet is pristine, which now will be following closing. But we'll continue to monitor as The difficulties continue in the equity markets and the valuations change. The question is when does that situation get better? And I think it will. It is an interesting point for us and we'll keep our eyes and ears open for that possibility, but waiting hasn't been the worst idea to see how things shake out.

Speaker 8

No, definitely not. Also a follow-up question is, can you remind us what your kind of latest thinking is on The size of the investment when you go to rebid for the new license term, at times you've talked about Things in the past, obviously, you're looking forward to investing more in Macau. Can you kind of remind us what your latest thoughts are on the size of

Operator

that? Thanks.

Speaker 2

I'm not sure I understand. And Patri, I may have been missing it. I don't think we have a I mean, we continue to be Very bullish on the account market despite the last 24 difficult months. We like we're seeing the retendering process. We're respectful of the process.

Speaker 2

We're continuing to Help and be involved with the government. I don't think we have a dollar amount in mind or a specific approach at this time. Patrick or Grant, do you want to chime in?

Speaker 7

Yes. I'll just say one comment and then

Speaker 4

I'll turn it over to Grant. But I think the important thing to note, it's still very early stages yet. So I don't think there's any details that we can really talk about in terms of our approach because It's not known sort of where things are going to shake out. Grant, I don't know if you have any other comments that you want to add.

Speaker 5

No, I think that's right. But I think we just reiterate Our general approach, which is continued reinvestment in our asset base, and it's worth reminding ourselves we're coming to the end About $2,300,000,000 CapEx program in Grand Suites at Four Seasons in London and Macau. And we've really stayed the course during the pandemic. We've accelerated the works where we can. We've overcome all the challenges related to supply chain During this pandemic and we're coming well within budget and we're delighted with the outcome.

Speaker 5

So I think that gives you a pretty good indicator Both of our appetite, but also of our resolve to continue to reinvest, in particular, in the direction that the government is pointing towards Across the various domains of diversification.

Speaker 8

Okay, great. Thank you very much.

Speaker 2

Thanks, Robin.

Operator

Your next question comes from the line of Stephen Grambling with Goldman Sachs.

Speaker 9

Hi, thanks. I guess two follow ups and the first is really a Follow-up on Robin's question and Joe's earlier question on some legislative proposal. You mentioned it is still a work in progress obviously, but I'm wondering if you could just walk us through where you feel like You do have incremental clarity and where specifically there may still be pockets of uncertainty based on the language in your conversations.

Speaker 2

Grant, that's yours.

Speaker 5

Thank you for the question. I think the main The key aspects of the legislation have been laid out in terms of the number of concessionaires and the duration of the future concession. There are a lot of details in there that Our question is to be worked out through the legislature. We've just Successfully gone through the first meeting with the legislative assembly and we're now moving to the Guggenie stage. So I think we can say at this point that it is still in draft form, but we really welcome The progress that's been made so it shouldn't be so rapidly since the launch of the first Public consultation in September has only been a short 4 months since that time, and we're already at the stage where We're going into the committee review of the draft.

Speaker 5

So I think The government has done an outstanding job in getting us to the stage of the process So quickly, with a lot of framework being clarified, but it is important to remember that this is still draft legislation And we await the final outcome hopefully in the coming months.

Speaker 9

Fair enough. Maybe as an unrelated follow-up here, you continue to have impressive cost control despite pretty difficult environment. How are you thinking about margins and labor inflation in Macau as well as Singapore as we think about an ultimate recovery Versus maybe some of the cost reductions you've made.

Speaker 4

So, hey, it's Patrick. It's something that we look at a lot with our team. I think one of the focuses that we had during this pandemic over these last really 2 years has been to keep the core team together. So when we do recover, we have the ability to Service our customers and get right back to business. And I think it's credit to Grant, to the team in Singapore and really to everyone at the local teams That we're able to keep the group together, continue to focus, continue working and keep everyone healthy and safe.

Speaker 4

And I think where we are today as we look about Look at margins upon the recovery, we ran a pretty efficient business both at Sands China and in Singapore prior to the pandemic. If you look at our margins in the years leading up to the pandemic, Sands China team did an unbelievable job taking a lot of costs out of the business and becoming more efficient as we grew our business there. And so I think if you look over a series of years, we've always been cost focused. I don't want to say that there was really room in the prior operating level. What is true is that I'd like to believe that the run rate margins for the business will be consistent with those margins prior to the pandemic.

Speaker 4

The one thing to note is that Singapore, there is going to be a tax rate change, which will impact a gaming tax rate change, which will impact margins at renovated Sands, when that happens. There will be Slight margin impact from that going forward. But as a practical matter, we would expect to have the same margins given the same level of volumes, even taking into account mix. If you recall in Macau, our exposure to lower margin business, such as junket and VIP is less. We're more premium mass focused.

Speaker 4

So we'd like to believe our margin structure will be fairly consistent upon the recovery.

Speaker 2

Helpful. Thanks so much.

Operator

Your next question comes from the line of Thomas Allen with Morgan Stanley.

Speaker 10

Hey, thanks. Can you guys talk about Potential future investments, I know that you've been looking at Florida, New York, any comments on those markets? And then Gwen announced the project in UAE yesterday, have you considered that market? Thank you.

Speaker 2

I'll take the U. S. And I'll leave Patrick discuss the UAE. Thomas, we've been For years talking about, maybe before your time it's been so long, New York, we're big believers in that market. The recent announcement by Governor Hochul about 3 licenses is encouraging.

Speaker 2

We're in the hunt. I wouldn't want to overplay our hand and say we have And what opportunity might be, but it's a massive market underserved by the current product and by any metric that should be a

Speaker 7

massive market for us. So we're deep into it.

Speaker 2

We were there last week. We So we're deep into it. We were there last week. We have a team on the ground working through it and we're hoping to get a license. That's all I'll say about that.

Speaker 2

You followed in the newspapers our efforts in Florida. We're in a signature gathering mode. It's a struggle down there. It's not an easy Process to go through, but we're trying very much to be in the hunt in Florida. We really appreciate how underserved that market is And the material opportunities exist for a top tier land based opportunity in Florida would be wonderful.

Speaker 2

Same goes for Texas. Old Texas is a few years away from We have been down there. We have spent time in the market. We have people trying to find our place in that market if it does happen, but I think that's probably The farthest away from a decision. Patrick, you want to address the wind situation in UAE, what happened over there yesterday?

Speaker 4

Sure. Happy to. So a couple of thoughts. So first off, as someone who's in the tourism business, Our company is very focused on looking at markets, evaluating them and what different markets present in terms of both competition and things that customers like. And I will tell you, if you go to UAE and you go to and you see the investments that are going on there, it's really remarkable.

Speaker 4

The scale of investment, the quality of investment is really unique to the world. It's a very special place and I understand why Wynn would have interest going there. It is a tremendous tourism market, has a lot of potential. And to be fair, it is an economic center for that region. So in terms of opportunity, we all understood Why there would be interest there for them to go?

Speaker 4

So it's something that we'll continue to watch and look at, but there are a lot of high quality markets that are available to our company. Rob just referenced a few. We're going to keep all of our options open and continue looking for opportunities for Las Vegas Sands to deploy capital in high quality developments. So that's really sort of our view on that situation.

Speaker 7

Perfect. Thank you both.

Speaker 10

And then just on the MBS $1,000,000,000 renovation, it's something you guys have been talking about for a long time, But you just add to your slide deck this quarter, is that just because now it's ready? Any more details on the Potential disruption or time line? Thank you.

Speaker 2

Yes. Well, it's under respect that it's moving forward. I think the We've talked about it for a long time, Thomas. We have underinvested at times in those rooms and suites. So we're deep into the renovation.

Speaker 2

I think we all know that with the COVID environment, You always have the risk of either labor or supply chain risk, but they're moving nicely. And the team, we have not been there, so you've had cancer, you've seen it, but The images we see are very positive and I think it's moving at a really good pace assuming that there's not interruptions we can't control. Patrick?

Speaker 4

So I think what's interesting about it, you've heard Rob reference it before. And I think our team is very focused in using this time during the pandemic to enhance our product offerings and our attractiveness to our customers. And we've always been working with the Singapore Tourism Board to help achieve their goals while we invest. And I think there's been a focus in Singapore over the last few years on increasing high quality tourism. And we believe MBS is a leader in that area and we wanted to reinvest In the property to really enhance our suite product and some of the other amenities that we have for our customers, while we have some downtime.

Speaker 4

And so this is something that we've been looking at many years, we have a high quality design team that will really create some of the best suites we've ever had in our system. We've had some great success with some of our efforts in Macau in some renovations with some of the new product we brought online during the pandemic. And so we feel like our design level is really at a high level now, And we're really looking forward to investing this amount of capital into Marina Bay Sands to create a level of sweet product we never had there before, both in terms of count and in terms of quality. So this will address some of the goals that have been laid out by the Singapore Tourism Board and the government there as well as help us address and grow our business in high value tourism. So that's really the objective.

Speaker 4

It's something that will happen Really over the next 2 years, we're underway now and we hope to be complete as soon as possible. But in reality, due to labor and materials, it looks like it's going to take to 2

Speaker 6

Helpful. Thank you.

Operator

Your next question comes from the line of Shaun Kelley with Bank of America.

Speaker 11

Hi, good afternoon and good morning everyone. Thanks for taking my question. Maybe just one because it actually hasn't come up. I guess it's sign of the times really that I was just wondering from either Grant or Wilfred, if we could get a little color just on the COVID conditions and signaling on the ground in terms of Possible reopening milestones you might be looking for. I believe there was actually a little bit of press from the government talking about The tourism industry and its importance, so maybe just a couple of your high level thoughts about things we can look forward to there.

Speaker 5

Sure. Thanks for the question, Sean. I think in the last few months, if you could describe it Sequentially, we've come through some local cases on COVID that occurred in Macau at the end of September to early October. So obviously, The business environment was heavily impacted during the month of October. In fact, that was the lowest month in the entire year for the GGR for the city.

Speaker 5

As we move towards the end of the year, things improved in terms of The travel board policies around Zhuhai and Macau, and then you saw the business volumes and visitations pick up accordingly. Most recently, we've had some local cases in Zhuhai, which has impacted the border Again, and hopefully, we're going to be coming through the other side of that As they get that under control and as they have done. So I would describe it as not a lot has changed in terms of The overall environment of the government, both central government and local government continue To control the COVID cases exceptionally well in accordance with their policies. And as we move forward, We obviously have Chinese New Year and also the Winter Olympics. Understandably, Everyone is being cautious in terms of traveling.

Speaker 5

And obviously, It's possible that beyond these events, as things improve in terms of domestic cases in the various provinces And these big events are out of the way. We can look forward to more positive picture in terms of travel.

Speaker 11

Great. Thank you. And then just one probably for Patrick. But Patrick, you mentioned the Singapore tax rate and I think we picked that up In some of the local press as well, just was curious if you could give us a little bit more color on how that plays through. Is this the change that was actually tied back to The license extension or is this something that's incremental or different from that?

Speaker 11

Because I think there was a tie in to that if I recall correctly, but it's frankly, it's been a couple

Speaker 4

Yes, it's just been a couple of years. This is the implementation of what was tied in the development agreement. So nothing's changed consistent with Prior disclosure, prior discussions, but just wanted to highlight it as something that may have an impact on margins going forward. That's all.

Speaker 11

Great. Thank you very much.

Operator

Your next question comes from the line of Dan Palitzer with Wells Fargo.

Speaker 12

Hey, good afternoon, everyone. Thanks for taking my questions. So a quick follow-up on just the sports betting and iGaming endeavors or analysis that you're doing. Have you given any thought or consideration to opportunities that would involve markets outside the U. S, Such as Europe, are you really just focused on U.

Speaker 12

S. Sports betting at this point?

Speaker 2

We consider all markets. Yes. Yes, I

Speaker 4

think one thing to highlight. Yes, sorry, one thing to highlight. So I think we're not just looking at sports betting. I think we're looking at a variety of different opportunities in the digital space and to Rob's point, in a variety of different markets. But we're not rushed.

Speaker 4

So we're building teams, we're making long term investments, we're thinking about opportunities, we're focused on return on invested capital And we're really looking at it through the lens of long term strategy that can blossom into something meaningful. And so we're not just sort of chasing certain specific areas that may have valuations that are peaked at the day. I think we're looking for long term High growth opportunities that present really positive returns. And so it's not just in sports wagering, it's a variety of different things and we're looking at different markets.

Speaker 12

Got it. And then just a clarification on the capital allocation question from earlier, and as you think about a repurchase First, the dividend, I mean, do you really need to see a more sustained recovery in Macau before returning capital? Or is there a scenario where you get The proceeds from the Venetian sale and Singapore starts to recover and you could be more active on that front beforehand?

Speaker 4

I think from our standpoint, we sort of view return of capital for a very long term shareholder enhancing process. And I think for us, we're going to want to see a return in our markets with a stable level of cash flow And post pandemic conditions where there's operational clarity before we begin return of capital. I think it's very important for the sustainability of any dividend and a return of capital program. And it's something that we hope will come soon. There's been a lot of investment in public health initiatives and a lot of incrementally making progress in both of our markets, and we're hopeful that this occurs in the near term.

Speaker 4

And so once that happens, we'll start to evaluate potential return of capital. But again, we sort of view the proceeds from the Las Vegas sale as permitting us to develop large scale destination resorts In new jurisdictions to help grow our business.

Speaker 12

Got it. Understood. Thanks so much.

Operator

Your last question comes from the line of David Katz with Jefferies.

Speaker 7

Hey, your

Operator

line is open.

Speaker 7

Good afternoon. Thanks for taking my question. I just wanted to, if I may, follow-up on 2 of the details from earlier where you talked about the $70,000,000 and that sounds like it's in the EBITDA line. Is that Solely in Macau, is that spread, does that include Singapore? It's just Singapore.

Speaker 7

And it's just a topic with respect to the $500,000,000 run rate, which is Macau, that is excluding what may or may not have occurred With respect to Omicron in January, correct?

Speaker 2

I think, David, we're mixing apples and oranges. I think, first of all, the seventy That's referenced solely at MBS. And my $500,000,000 reference was in previous calls, I said, I think the current situation which runs up and down Every day, I think Singapore today is $500,000,000 EBITDA annual run rate until we get further DTL and stabilization. My point is I want to make sure we're running that same $500,000,000 We have a lot of optimism that that will change this in 2022, perhaps first half, That's all Singapore related, the one time nonrecurring. And the $500,000,000 was referred to Singapore as well.

Speaker 2

So we're not making any It's impossible in Macau to rationally predict anything until the government makes decisions on the visitation. It's silly for us to Speculating something is so speculative. You can't have no underpinning the fact. I think once look, we believe that market will explode when it was back up again, but I think it's more of a second half of the year, but then again, who's to know. So we're not making any speculative decisions on A run rate in Macau.

Speaker 7

Understood. If I can just follow-up very quickly. With respect to the Makeup of business in Macau, not looking for a guide or a range, but any insight around how VIP business which may go away could be recaptured through premium mass. Any tools or thoughts or perspectives to help us think about what portion of that could be would be really helpful.

Speaker 2

Yes. I'll just keep in mind quick look now on Grant, Opine as well. I think we all believe that the junket having done this for many years in Macau in the U. S, these Customers in that segment are going to just disappear. And when they read the other junket business is not happening, therefore demand will go away.

Speaker 2

It's not It will just resurrect in different segments and find new ways of materializing in the casino. It always is that way in any business. It goes back to any segment doesn't necessarily just go away because the mechanism goes away. It just evolves with different segmentation. So we're pretty bullish that A business that was yielding 8%, 10% could be much more positively profitable As a resurrection of the segments, and so that's my take.

Speaker 2

I think any belief that the junket business, the whole segment is away is just Not thoughtful. Grant, can you weigh in?

Speaker 5

Sure. Yes, I think Rob is spot on on that You have to distinguish between the end demand and the distribution of it. So I think clearly some portion of that end demand and You're not going to get drawn into exactly what proportion will shift into the other segments and that's just natural because The end demand is there. Now, with some portion of it also dissipate and disappear, Sure. But that's probably the portion that was not in the 1st place that's sustainable in any event.

Speaker 5

So I think the core underlying end demand that will find its way through other segments over time And we should distinguish between the end customer as opposed to the distribution system.

Speaker 7

Perfect. Thank you very much for taking my questions.

Operator

Ladies and gentlemen, We thank you for your participation today. This does conclude the Las Vegas Sands 4th Quarter 2021 Earnings Conference Call. You may now disconnect.

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