Las Vegas Sands Profits Soar Thanks to Macau Resurgence
Posted on: January 25, 2018, 03:00h.
Last updated on: January 25, 2018, 11:38h.
The Las Vegas Sands Corp. announced that their net income rose 137.9 percent year-over-year in the fourth quarter of 2017, driving a full year of strong growth for the company.
Overall, the firm’s income was up 68 percent for the year, rising to about $2.81 billion compared to $1.67 in the prior year.
In the Las Vegas Sands quarterly earnings call, chairman and CEO Sheldon Adelson told investors that the company’s investments in Macau were paying off. While he noted that the Sands’ gaming operations were experiencing faster growth than Macau casinos as a whole, he noted that the firm’s non-gaming facilities were also starting to drive profits.
“The structural advantages that enabled us to drive mass non-gaming growth were fully evident during the quarter,” Adelson said. “The scale and range of our hotel suite inventory, the diversity of our non-gaming offering, especially in retail and entertainment and the unique benefit of inter-connectivity between our Cotai properties. These advantages allow us to attract more overnight visitors than any other operator, as well as increase their length of stay.”
Sands Sees Success with Mass Market
According to Adelson, hotel occupancy for the company was 94 percent for the quarter, even with the addition of 3,000 more hotel rooms at the Parisian about a year ago.
That helped the Sands’ properties set a new all-time high by having over 1 million “occupier room nights” for the quarter.
All of this is part of a strategy to attract premium mass market gamblers, as well as tourists who may only have a passing interest in gambling. In particular, Adelson said, the Venetian Macau has managed to attract more than 290 million visitors during its first decade of existence.
“The Venetian Macau stands as the most visited integrated resort in Asia, if not the world,” Adelson said.
Londoner Rebrand Could Spark More Growth
Sheldon Adelson is also hopeful that the renovations that will rebrand Sands Cotai Central into the Londoner will build on this success. According to his comments during the earnings call, the renovations will take the Sands’ presence in Macau to a whole new scale.
“Upon its completion, the Londoner will accommodate more overnight guests than the Venetian and the Parisian combined,” said Adelson.
The Sands is planning to spend $1.1 billion on their efforts to rebrand the Sands Cotai Central into the Londoner. The renovations are expected to be completed by 2020, just as Macau’s gaming licenses begin to come up for renewal.
While the Sands venue might experience some short term disruption because of the construction work, most analysts believe the upgrade and rebranding will ultimately pay off by becoming an attraction for tourists and mass market gamblers.
Macau casinos have been experiencing growth for well over a year now, rebounding from an extended downswing caused mainly by anti-corruption efforts on the Chinese mainland. According to analysts at Morgan Stanley, gross gaming revenue at the city’s resorts could reach as much as $53 billion by 2022.
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