Las Vegas Sands Q3 2022 Earnings Call Transcript

Quartr
Provided by Quartr
October 19, 2022

There are 14 speakers on the call.

Operator

Good day, ladies and gentlemen, and welcome to the SAMS Third Quarter 2022 Earnings Conference Call. It is now my pleasure to turn the floor over to Mr. Daniel Briggs, Senior Vice President of Investor Relations at Sands. Sir, the floor is yours.

Speaker 1

Thanks, Paul. Joining the call today are Rob Goldstein, our Chairman CEO Patrick Dumont, our President and COO Doctor. Wilfred Wong, President of Sands China and Grant Chun, EVP of Asia Operations and CEO of Sands China. Today's conference call will contain forward looking statements that we are making under the Safe Harbor provision of federal securities laws. The company's actual results A definition and a reconciliation to the most comparable GAAP financial measure are included in the press release.

Speaker 1

We have also posted an earnings presentation on our Investor Relations website. We may refer to the presentation during the Q and A portion of the call. For the Q and A session, we ask that participants please pose one question and one follow-up. So we might allow everyone with interest the opportunity to participate. Please note that this presentation is being recorded.

Speaker 1

I'll now turn the call over to Rob.

Speaker 2

Thank you, Dan, and thank you for joining our call today. A few brief comments, then move to Q and A. The recovery at Marina Bay Sands continued during the quarter with Property EBITDA reaching US343 million dollars The isolation of virus related restrictions in Singapore Many of the source markets coupled with the improvements in Air Lift have enabled this performance in financial this improvement in financial performance. We expect a robust recovery over time as further relaxation measures in the region are implemented and additional airlift in Singapore comes online. Our $1,000,000,000 capital investment program currently underway at Marina Bay Sands has introduced exceptional new suite product in premium segment focused amenities throughout the year.

Speaker 2

The response to these initial offerings has been strong. Additional offerings, including a single market as we execute our expansion plans at MBS in the years ahead. Turning to Macau, the operating environment remains difficult. Importantly though, in periods when restrictions have been relaxed, customer demand and spending in Macao have proven resilient at the premium mass level from both gaming We appreciate the opportunity to submit our tender proposal for 1 of the 6 gaming concessions in Macau in September. We are now in the consultation phase of the tender program and as such, we won't be able to comment much further on the process at this time.

Speaker 2

We are big believers in Macao as a world center of tourism and leisure. We have been the biggest investor and operated non gaming businesses over the past 2 decades in Macao. We absolutely welcome the opportunity to invest even more in our non gaming products and offerings in Macao. We have great confidence in Macao's tourism recovery and its long term growth prospects as we do most of our we'll do our utmost to support Macao's economic diversification and its evolution as Asia's leading destination for MICE and leisure visitors. We consider our existing portfolio of resorts was listed in both the U.

Speaker 2

S. And Asia. We thank you for listening today. Now let's turn to your questions.

Operator

And the first question today is coming from

Speaker 3

Rob, in Readiness Sams, your run rating close to $1,400,000,000 in annualized EBITDA. And as you referenced in the investor slide presentation, without any contribution from a geography, mainly China. Given what you're seeing with improved Asian regional visitation volume and say other non China Geographies, do you think you can get to 2019 EBITDA levels at some point in the next year or so without direct contribution from China?

Speaker 2

Joe, we think Singapore is in a very unique place. I think we'll easily achieve 2019 levels. And as you referenced, we have 3 great Right now, we have obviously, tourism to China is very limited. We also are running about 55% visitation into Singapore from the rest of Asia, which means and that may seem odd to reference that because you think, well, we're running at the high levels of occupancy. But keep in mind that, That residual tourist that comes in does not sleep at the MBS property, gambles there, shops there, eats there.

Speaker 2

So we're getting hurt, I think, on the table business by not having all the hotels in Singapore operating at full level. It's a big business for us because MBS is the first port of call for most visitors, Whether they're sleeping there or not, they go there. That hurts our business. And despite that, we're achieving $700 win premiums in the slots and Huge retail numbers, but the upside is material. 3rd impediment is our sleeping rooms.

Speaker 2

We had about 400 or 500 units down right now. I think Singapore, it's just beginning. I always joke with the guys here, the party is just starting in Singapore. The truth is that Singapore is going to grow and for a couple of reasons. One is the destination is getting more powerful than ever.

Speaker 2

Our building is getting better than ever. And I think when you see a rebound from China and the rest of Asia, 1.6% will look very Small in terms of our ability to grow much larger than that. I think we can keep going to $2,000,000,000 next couple of years if we get it right And the market fully recovers. So as much as we like the numbers currently, we think there's much better days ahead for Singapore. That market and that destination Has grown quite a bit in terms of the Asian tourism world.

Speaker 2

And I think our numbers will reflect that in the years ahead.

Speaker 3

Great. And then switching over to Macau, I'm not going to sort of waste, I guess, my bullet of the question on the concessionaire terms and Other things I'd love to ask about, but maybe can you just remind us what your expectation or what your conversations are in the consultation process? What the timetable is for the license renewal to be finalized? Would you expect to hear from the government and then the government's End result to be publicly communicated. I mean that's all for me.

Speaker 3

Thanks.

Speaker 2

We woke our colleges up in Asia and the Dean's sleep to dissipate. So I'll let them answer that question, gentlemen, Grant and Wilfred are both on line, correct?

Operator

Correct.

Speaker 4

Well, we've been working with the government closely and A couple of rounds of discussion has been held. We are waiting for the government's notification Whether there'll be another next round of discussion and the timetable Remains the same. Everything's been good progress and we expect Some notification towards the end of the month for us to know when is the next step.

Speaker 2

Great. Lance, do I hear that? Any Additional commentary, Graham?

Speaker 5

No, I think that's right. And we obviously Welcome the smooth progress in the process. And we still do expect the entire process complete by the end of the year as previously stated by the government.

Speaker 6

Thanks guys.

Speaker 2

Thank you. Appreciate it.

Operator

Thank you. The next question is coming from Carlo Santarelli from Deutsche Bank. Carlo, your line is live.

Speaker 6

Hey, guys. Thank you. Obviously, Rob or whoever wants to take this, you guys had a significant boost in kind of hotel revenue out of Singapore and mainly in ADR. Any color you guys could provide? I mean, I know strategically you're looking to put the best customers in that building right now from a gaming perspective.

Speaker 6

And obviously that's showing up in the numbers both on the VIP segment role and mass segment role. Anything you could provide as to kind of how the mix has changed at that property? I assume some of that ADR is just kind of casino comp room and That's kind of what's making that jump so significant?

Speaker 2

I think, Carlo, one of the most significant things is what's not there. We're running like 96 You see on Page 14, the reference page, ADR515. I think, again, we're just beginning. We only have Half the recovery in terms of China is not there, most of Asia is not there. Our point is the mix gets better and better because demand gets higher and higher.

Speaker 2

Our problem there is going to be not having enough rooms to service over demand FIT casino. And I think we pointed 2 great variables, one being retail, which is that mall just keeps getting better and will keep getting better. And then our win per unit on the slot side looks strong. But I think the refocus on Singapore as a destination as a market in great ascent illustrates what the upside could be on the tables, the non rolling tables. Rolling tables will probably get to a whole new level.

Speaker 2

Demand The non rolling tables is why I'm waiting for recovery. And that's when you see China and the rest of Asia full lift comes back. So Right now, we're just faced with the sad reality is we like to have a lot more rooms in Singapore because that $515,000,000 is a real number. It could be a lot higher As the man keeps listening, we can sell hotel rooms all day long at top dollar rates from the FIT side. We have great demand Much better than pre pandemic demand from the rolling side.

Speaker 2

So again, the 343 is a very nice number, a good print in lieu of what's happening in that market. But I think the best days of Singapore are next couple of years as we keep growing. And you're going to see our refocus on our mix In the Retail segment, our room mix, we're going to continue to focus on being the right room mix, top tier rooms, the right food and beverage product. We've got to work harder because Singapore as a destination is growing immeasurably. We want to be part of that.

Speaker 2

So we're just in a very good place in Singapore. I think looking back, we always thought $1.6 was a very nice number. Hopefully, that looks like a small number in the future. Back.

Speaker 6

Great. Thank you, Rob. That's helpful. And then if I could, as you guys have talked about in the past, kind of the thoughts on development, Clearly, the New York process is kind of underway. Could you perhaps maybe share a little bit of your thinking around your approach and perhaps how you're thinking about the broader process timeline in general for New York?

Speaker 2

Waiting for Governor Hochul's Advice to how that's kind of process will begin. As you know, we've always been focused on the market for many years. We have a bid. We're putting here right now. We Property, we're putting together right now.

Speaker 2

Very bullish on New York as a market. Tough because on one really I think one viable license at the end of the day, I think it's going to be very A dog fight and we hopefully have a bid that gets attention. But other than that, timetable looks like January for the RFP. I think sometime in 2023 maybe we'll see a decision and we'll put our best foot forward, that's for sure. It would be a perfect market to be in with the density of population and ethnicity.

Speaker 6

Awesome. Thank you, Rob. Appreciate

Speaker 2

it. Thank you.

Operator

Thank you. The next question is coming from Robin Farley from UBS. Robin, your line is live.

Speaker 7

Great. Thanks. Can you give us a sense of when what your expectation is for a more open border and whether there's still an expectation that November would see the packaged tour visas and electronic visas, is that something that you feel like is still moving forward and will still allow for increased visitation to start?

Speaker 2

I'm going to ask your former colleague, Mr. Chaman, to answer that question, Robin.

Speaker 5

Sorry, Robin, I couldn't quite hear the question. Can you repeat that?

Speaker 7

It was just about your expectations around timing for the border to be a little more open in Macau and specifically anything on the changes that were planned by early November for Visa applications to be electronic and packaged for Visa to restart.

Speaker 5

Yes, sure. I mean, I think, Robin, there has been a positive announcement on the relaxation With regards to tour groups as well as the electronic visa application in 4 provinces And also in Shanghai, expected to commence End of the month or early November. And so that's obviously going to be a very positive signal for a gradual recovery in the visitation, especially from these key provinces And the municipality. And obviously, we welcome the development. Clearly, In the past few weeks and also months, it's still been Relatively impacted by the COVID cases in different provinces as far as the non Guangdong visitation is concerned.

Speaker 5

So what we're seeing right now in Macau is predominantly coming from the Guangdong province. But hopefully, As we get out further into the Q4 with these recent measures, we're going to start to see A more well rounded mix of visitation building up towards the end of the year.

Speaker 7

Okay. And then also for my other question on Singapore. I know you said that The deadline to start construction was extended till April 2023 and that's you had said that before this quarter. Just wondering if you have anything more definitive about when that would happen? Thanks.

Speaker 8

Hi, it's Patrick. I think the great news is, as Rob said in his opening remarks and the questions, our performance in Singapore is very strong. It's a privileged market Inbound tourism there is really remarkable given some of the constraints. The spending power of the consumer there is tremendous. We're really focused on high value tourism You're seeing the results of that in our results.

Speaker 8

And I think the Tower 2 or IR2 in our mind Has just tremendous potential. We're very excited about it. But unfortunately, we don't have any update right now about the timing. So we're working on it. We're in process.

Speaker 8

And as we make a little bit more progress on our work there, we'll be able to disclose further about where we're headed. But as of right now, we're very optimistic about it. We're excited about the project. We think it really will speak to a very powerful part of the market. Now we don't have an update on timing.

Speaker 7

Could I just ask one clarifying question on that? It sounded previously like the timing and the budget and all of that was Because of the pandemic and the disruption from that, if your business level sort of fairly recovered, Is that still the kind of uncertainty in the commencing construction or are there other factors that are more of a gating issue at this

Speaker 8

It's really just process. I think there's a certain number of steps that we have to go through or be able to build. And so those processes were delayed Because of the pandemic and because of some of the government agencies that we have to deal with being focused on very pressing matters. So now that they're able to reengage, we'll start that process again and begin on the path. And as we follow sort of the steps necessary, we'll be able to provide an update.

Speaker 8

But it's really just timing related to things necessary to begin. There's a lot of things that have to happen to make a building of this scale and complexity in the location that it's in, get all the approvals, get all the steps necessary to begin.

Speaker 2

And Bob, let's say the process for us is a learning, it's an evolutionary process. We keep thinking how about this market differently as we learn more and see more. And so our thinking has changed in the size of room, gaming capacity, who the customer is. Singapore has morphed from what it was 5 years, been a whole different place now. I think it's affected our thoughts on what we build in Singapore and how good should it be and how powerful should it be.

Speaker 2

I think it's slower we want it to be, but it's in the NBA a very, very important product.

Speaker 7

Okay, great. Thank you very much.

Speaker 1

Thanks, Rob.

Operator

Thank you. The next question is coming from Dan Politzer from Wells Fargo. Dan, your line is live.

Speaker 9

Hey, good afternoon, everyone, and thanks for taking my question. So just you guys are seeing a lot of strength in terms of the room product right now. You're doing the $1,000,000,000 project renovation on your room product at MBS. I mean, how do we think about the return of that given this should be fully online next year? And do you think you can get to that typical kind of 20% return Historically or maybe higher even in the absence of the Chinese consumer coming back.

Speaker 2

I think we need the Chinese consumer. We need a couple of these to happen. Let's clear, we need to see China return at some point to achieve our goals. We also need to see the balance of Asia open up and come back at Again, as I referenced earlier, the 55 or so percent number, which compares with 2019 isn't good. We need Singapore to be full on because our building, if you walk through there, when there's tens of thousands, hundreds of thousands of people there, they're all staying there.

Speaker 2

There's the other hotels come to visit. So these other hotels are very important to us. So we need 2 things to happen. Our renovation will complete in late 'twenty three. The balance of Singapore of Asian tourism into Singapore should be hopefully by Q2 complete.

Speaker 2

And that leaves the one variable we can't answer, that's the China return. When all that happens, do we think we can get you a very fat return? Oh, yes. I'd like to believe we can our goal is to get to $2,000,000,000 in Singapore. And we believe that's not difficult if the market returns in full.

Speaker 2

Keep in mind that we went in Singapore with a very different mentality a decade plus ago. The evolution of Macau into a Really the premier FIT gaming market probably right now in that region is MBS. And I think we are we're Experience the beginning to return, but it's not nearly where it needs to get to for us to get to $500,000,000 a quarter, but I think that we'll hopefully see that in the years ahead. So we feel very bullish and I can't think of a better place to invest our capital than Singapore and Macao. And Singapore has proven to be Terrific opportunity.

Speaker 2

We put a lot of money in the cow. That will open up again and be a good opportunity. But right now Singapore is very, very exciting for us. And yes, we're very confident the returns will be there.

Speaker 9

Got it. Thanks. And then just pivoting to Macau, another one on the group tours and the EVs as Dinger's in. Can you maybe frame how big these components were for your business in 2019? And then secondarily, if we think about these parts of the business returning And coming back online, is there a path to Macau getting to positive EBITDA in the Q4 assuming no major outbreaks?

Speaker 2

I asked Grant to reference that. But I think we should be careful. We don't it's very hard as you know right now, Predictions on McAlb have been erroneous last couple of years because we don't know who's going to come and we don't know when they'll close the market. It's been stop and start for so long. It's kind of silly for us to pontificate on exact dates in EBITDA.

Speaker 2

Could it be the deposit? Sure, it'd be the deposit tomorrow if things opened up and return and that's going to happen at some point. But I think it's not it's difficult for us to tell you Q4 could be EBITDA positive without knowing what effect The business team will have in November and then also not knowing how the 0 COVID enforced will happen. So There's so many unknowns in Macao, it's very difficult to guess. Grant, will you open any commentary?

Speaker 5

Yes, Rob. Yes, I think Rob is right. I mean, the prediction of the future is tough. I think what we can say about the past is Group package tours represented roughly a quarter of the visitation before the pandemic. With respect to electronic visas, we don't have those numbers.

Speaker 5

Obviously, it varied significantly from province to province. But Clearly, the provisional availability of that mode of application absolutely is helpful to facilitate the Visa application for those relevant provinces.

Speaker 9

Got it. Thanks for all the commentary.

Speaker 1

Thank you. Thanks, Dan.

Operator

Thank you. And the next question will be from Shaun Kelley from Bank of America. Shaun, your line is live.

Speaker 10

Back. Hey, good afternoon, everyone. Maybe just to stay on Singapore. My first question is just to ask a little bit about I'm trying to triangulate a little bit more on sort of what you're seeing behaviorally. When we look at RevPAR, for instance, I think it's about 6% versus 2019, is that a decent gauge of, let's call it, the consumer and the, let's call it, the spend per person or per head?

Speaker 10

Is it Better than that. I'm just trying to kind of think about pent up demand or what you're seeing on kind of a core visit to visit basis versus what we've seen in some of the Western markets. We don't have a great proxy in Asia yet about sort of how pent up demand is going to play out and just trying to kind of see what you're seeing a little bit more.

Speaker 2

I'm going to ask Patrick take that, but I want to say one thing Sean's critical understanding is that Singapore is much different. I think this is the obvious response that Singapore is much different than Las Vegas or U. S. Regional because of the obvious that you got to fly to get there. So you'd expect other countries opening up.

Speaker 2

And it's like buying wine in Burgundy. There's a lot of different regions in Burgundy. There's a lot of different regions in Asia that don't open, haven't opened, airlift's a problem. So we're really hampered as nice as what 340 is for the quarter. I think you're not getting the full power.

Speaker 2

It's hard to differentiate versus other places. The truth is that Singapore remains really Held back by no China or little China and the regional market there, depending on the airlift. The difference Macao will be when Macao opens up, it's like Las Vegas or Regals. You can come right in without airlift. You're not airlift dependent.

Speaker 2

So I do think Singapore right now is in a kind of Unclear uncertain environment. It's nice you're making $1,400,000,000 or whatever the number annualizes, but we won't know the full power of this market. We see it in retail. We see it in local slot plays is still strong. We see it in rolling volumes are strong because everyone's coming to Singapore, especially the F1.

Speaker 2

But I think what you're not seeing yet is unleash the full power of this destination and what's happening. Patrick?

Speaker 8

It's a very interesting question. I think the key thing to note is that it's a data point for the quality of tourism coming into Singapore And the high amount of consumption that's there when tourists visit. There are constraints and there were constraints for Irma Bay Sands during the quarter. So as Rob mentioned at the beginning, you see from the deck, we had approximately 500 rooms out of inventory during the renovation. The rooms that are coming online are probably the best products we've ever had.

Speaker 8

Very proud about that. We think we'll be able to trade off in terms of the quality of the tourism that we get out of those rooms once the completion is there. One thing to note is that we'll be done at the end of 2023. So we're going to have a few more quarters of disruption as we take rooms out of inventory to complete the renovation process in where they stand. The other thing to note is that the airlift is not there and some of the other hotels around the Singapore market do not have the full capacity because of labor constraints.

Speaker 8

So once these things are removed from the market that act as limiters, then you can get an idea of what the true potential would be in a run rate environment. But I would still call this a little bit of a recovery quarter. So we think there's more potential to run as we fix some of these things, that are sort of limiting the way that we can earn and to be fair, the market can earn.

Speaker 1

Yes. One thing if you look

Speaker 2

at our sales in the retail mall on Page 31, it gives you some indication that we're running at $23,000,000 $2,400 a foot Marine and Bay Sands for the Q3. I also think you look at the rolling volumes as they start to kick in, I think those are great data points see a quality coming. But again, it's fairly days. I think recovery quarter is the right way of approaching it.

Speaker 10

Super, super helpful. And sort of want to go down the same path, transitioning over to Macau. And I'm not sure if The exact right way to look at it. But here, you do this slide on slide 12 where you kind of break down the mass win per visit, which I find to be very valuable. Just as we think about that level and we saw this sort of pullback from what was probably a very premium mass driven business back over the like last 8 quarters or so.

Speaker 10

The last two quarters have looked a lot like where you were back in kind of 2018, 2019. Is this the right which one of those 2, the sort of pent up demand we saw over the last 8 quarters or kind of these more recent numbers is a better guide for what we think normal activity might look like in Macau?

Speaker 2

Wayne, you want to take that?

Speaker 5

Yes, I'll take that Rob. Yes, thanks for the question. I think it's interesting looking at that trend as to highlight for the past several quarters. I would say the difference that you highlighted with the Previous two quarters versus the prior 8, it's really just a function of the regional mix. So Into 2022, we've had a much more Guangdong biased mix, if you look at the visitation data.

Speaker 5

And that's mainly result of the various COVID outbreak impact on the non Guangdong source of visitation. So if you're looking at the period post pandemic, that's clearly the differentiator. And then if you compare with pre pandemic, then it's of course still very much Premium mass coming back faster. And I think that broadly stands, notwithstanding Well, RPE adjusted for the regional provincial mix. I think that's still valid point and it's borne out By the data series, so obviously premium mass comes back first and then the mass comes back later.

Speaker 5

But this year, definitely, there's an impact from the regional mix as well.

Speaker 10

Very helpful. Thank you.

Speaker 2

I think we all agree that underlying demand in Macao is going to be there once COVID is resolved. And we know the difference happened probably in the U. S. And Again, with our footprint there, our size, our scale, we know the base mass, premium mass is going to drive this thing. The only variable we don't know is The missing junkets segment, how impactful it will be.

Speaker 2

But we believe we again, when that door does open, I think dependent demand is going to be extraordinary.

Speaker 5

Thank you again.

Speaker 2

Thank you.

Operator

Thank you. And the next question is coming from Brandt Montour From Barclays, Brandt, your line is live.

Speaker 11

Hey, good afternoon, everyone. Thanks for taking my questions. On Singapore, Can you guys give us the room rate differential between the finished room product and the legacy room product At run rate?

Speaker 8

I think the problem is the it's Patrick. I think the problem is there's so much noise in the comparison Because what we would be giving you is 2019 and this is not a fully open market yet. What we'd like to believe is after the quality of the renovation, to be fair, We were taking keys out of inventory to create larger suite product. The level of design, we have a new service model. We've changed out a lot of the team there In order to improve our service delivery, there's a lot of things that are going to be different.

Speaker 8

So I don't want to quote you a number until we get to the run rate. But the key takeaway is that we're very focused on high value tourism. We're investing in room product. We're investing in personnel and training and in service delivery and in food and beverage and other amenities in the property to ensure that we can sort of capture that high value tourist. And that's really what you'll see over time.

Speaker 2

I think one thing you just have to do, you don't want to understand this thing is you look at pictures, I'll ask, but jump on a plane someday and go see it. The product we're building there is unlike any ever been done in Singapore. It is far superior to what we've done in the past and our competitors. And so I think when people our response has been across the board perfect in terms of how people view this product. I think the impact is going to be much higher than we understand Because you build something that good, people respond to it.

Speaker 2

I would encourage anybody who's in that part of the world to spend a day at Maria Bass and we'll show you what we're doing. It's pretty impressive.

Speaker 11

Great. Thanks for that. That's helpful. And then as you again on Singapore, one of the narratives on the early days of the reopening of that market was that Singapore was gaining share of groups and convention business from Hong Kong. As you talk to your meeting planners and and they're looking out 6, 12 months, 18 months.

Speaker 11

Is there a sense that with Hong Kong starting to reopen that market is sort of Trying to regain some of that share? Or is that market too uncertain and the momentum is being maintained for Singapore in that business?

Speaker 8

So Singapore is open for business. And so that means a return of leisure tourism, which we're benefiting from directly and the return of business tourism, which we're seeing in a strong way. I don't think we can draw a comparison with Hong Kong because access is different. So I think the way to look at it now is Singapore has always been a very strong MICE market. And I think it will continue to be so because of the investment, the high quality tourism assets, its importance as a financial center.

Speaker 8

We intend to invest behind this thesis. And so we think it's generally a very strong place to do business tourism. In terms of Hong Kong, I don't think we're at run rate yet to really understand sort of what that means. There's still COVID restrictions. There's still other restrictions in operation.

Speaker 8

So until those return to a more normal time, I think it's going to be hard to have any view at all.

Speaker 11

Great. Thanks for the thoughts.

Operator

Thank you. And the next question is coming from Stephen Grambling from Morgan Stanley. Stephen, your line is live.

Speaker 12

Back. Hey, thanks for taking my questions. You mentioned the trade up and quality of the new rooms in Singapore. Can you just remind us of the cadence of rooms coming out and coming in over the next couple of quarters. And also talk to the net impact from these actions split across any uplift from renovated rooms versus the older rooms and

Speaker 8

So we're going to have, let's call it, anywhere from 300 to 500 keys out of circulation across the next five quarters. And then the room renovation will wrap up and the tower will be fully the 2 towers will be fully ready By 20 20 24 and actually by the end of 2023. So that's sort of the cycle. So we're going to have not our full potential of room delivery During the next five quarters.

Speaker 12

Are you currently delineating between the new rooms in terms of pricing and the old rooms?

Speaker 8

There is some variability there, yes, but it also depends on which room is in the segment. So that we have certain suites that are out, certain rooms that are in, Depends on the time. Yes, there is some differentiation. So there is a blend there.

Speaker 12

Got it. And then maybe turning to Macau, the market share there in mass has been Quite volatile. How would you frame how your market share may evolve in a market recovery as different segments return as you described in a bit of a cadence

Speaker 2

Graham, do you want to handle

Speaker 1

that? Sure.

Speaker 5

Yes, thanks for the question. Yes. I think it's volatile right now because the volumes are so thin. So I'm not sure looking at This quarter or even the prior quarters is particularly meaningful at this point. But I think going forward, I think as Rob referenced, we expect strong comeback of both premium mass and mass.

Speaker 5

And I think in those segments, we're going to perform very well. Obviously, There's a past history there, but also I think looking forward, we are coming off these fantastic product investments that we've made During the pandemic with the RMB2.2 billion investment program that we've implemented and now Coming out on the other side, pretty much completing with the London Arena being the last component. So with the Londoner and the Grand Suisse and Four Seasons, we feel very strongly that We're going to perform very well in the market share front across all of these segments, not just because of the suites, Speaking to the mass segment, but also for the mass segment, I think we'll end up with these 3 wonderful, iconic destinations, to follow on from the Phoenician and the Parisian and now with the London and Macau, Which is already starting to gain so much traction with the people who have been able to visit and also locally as well.

Speaker 12

Got it. Helpful. Thanks so much.

Speaker 13

Thanks, Steven.

Operator

Thank you. And the last question is coming in from David Katz from Jefferies. David, your line is live.

Speaker 2

Hi, evening, everyone. If you could just talk a little bit about what you may have learned past quarter or so about the mix of revenue in recovery And Macau, what should we expect and what role does sort of VIP play in all of this? And I know Obviously, premium mass is the focus, but just help us break down the different streams if you can. Mr. Cham, are you still awake?

Speaker 5

Yes. Still going. Yes, I think As I referenced earlier, I think there is a mix between, yes, the business segment the matrix between the business segment as well as the Regional breakdown. So I think if you're just looking at the business segment, clearly VIP right now is It's very low levels of volume, especially versus premium mass and even mass. But part of this Impact in 2022 is also the regional composition of the business where We're obviously very Guangdong dependent right now and have been for most part of this year.

Speaker 5

But I think going forward, it should be like how we've been seeing, which is that the premium mass We'll come back first and more strongly and then followed by the mass. And this is also true if you look at the retail numbers, What we've seen is 2021, very, very significant performance in the Luxury Retail segment. And of course, 2022 less so, but again, it's really impacted by that regional difference. And then going forward, yes, similar trends. We expect the luxury retail to come back 1st and the fastest and then you follow through with the mass retail.

Operator

And we did have another it looks like we lost David. We did have another question come in From Ben Chaikin from Credit Suisse. Ben, your line is live.

Speaker 13

Hey, how's it going? Thanks for squeezing me in. Just kind of want to level set as we close the year. I think we mentioned tour groups and e visas for a few provinces in Shanghai, either at the end of this month or early November. Is it possible that Macau could have breakeven or positive EBITDA, as we go into the in the 4th quarter?

Speaker 13

Or you think that's out of the realm of expectations. Thanks.

Speaker 8

Yes. I think the difficulty is we don't know. We've been in these conditions for 2.5 years, we're very hopeful. We're going to continue to invest in Macau. We feel very strongly about Macau's future and the opportunities that exist there for leisure and business tourism, But we just don't know.

Speaker 8

So as of right now, we're just waiting patiently and we're going through the process and we're looking forward to the opportunity for the upcoming concession.

Speaker 13

Got it. I appreciate it. Thanks.

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Earnings Conference Call
Las Vegas Sands Q3 2022
00:00 / 00:00