Q4 2022 Las Vegas Sands Corp Earnings Call

Speaker 1: Thank you for holding. We look forward to talking with you soon. Please hold the line and we'll be right back with you.

Speaker 2: Grandin. Thanks for holding.

Speaker 3: We appreciate your time and patience. Please stay on the line, and we'll be back in just a moment. Thanks for holding. We appreciate your time and patience. Please stay on the line, and we'll be back in just a moment.

Speaker 4: It is now my pleasure to turn the floor over to Mr. Daniel Briggs, Senior Vice President of Investor Relations at SANS. Sir, the floor is yours. Thank you, operator. Joining the call today are Rob Goldstein, our Chairman and CEO , Patrick Dumont, our President and COO, Dr. Wilfred Wong, President of SANS China, and Grant Cheung, EVP of Asia.

Speaker 5: we will discuss non-GAAP measures. Reconciliations to the most comparable GAAP financial measure are included in our press release. We have posted an earnings presentation on our website. We may refer to that presentation during the call. Finally, for the Q&A session, we ask those with interest to please pose one question and one follow-up question so we might allow everyone with interest the opportunity to...

Speaker 6: this incredible market has never wavered. And with an unrivaled critical mass of world-class IRs, as well as continued improvement in transportation infrastructure in the region, Macau will mature into a vibrant, diversified tourism market over the coming years.

Speaker 7: SEL's positioning and scale are perfect to capture the opportunity. Our diversified R.R. model with continuous investment in non-gaming segments including mice, hotel suites, live entertainment, retail, food and beverage positions us well to capture the growth opportunity.

Speaker 8: Our diversity, scale, and track record in non-gaming make us uniquely positioned to cater all segments to market, enable Macau to appeal to international tourists as well. The new concession is a win-win. We deeply appreciate the opportunity to operate one of those gaming concessions for the next 10 years. We are excited to deploy more capital to expand non-gaming offerings at S&T.

Speaker 9: marketing overseas markets. We view the investment commitments by SCL and the rest of the industry as positive for Macau. Over the past few weeks travel restrictions have been lifted. It is too hard to tell the true measure of the underlying pace of recovery but indications are extremely positive. We have seen significant improvement on property visitation.

Speaker 10: ying volumes, retail sales, and hotel occupancy.

Speaker 11: We remain positive on investments in the London and Four Seasons. Our investments position as well as the market recovers. The quality of our new products will also help drive high value tourism from the region, especially the overseas markets.

Speaker 12: Turning to Singapore, our normalized EBITDA and gaming volumes are back now to the 2019 levels. Normalized EBITDA reached 386 million less than E for the quarter. Rolling volumes are approaching 2019 level, and mass win per day is now exceeding the level of 2019. We've also delivered strong performance in non-gaming across all segments, including across the region.

Speaker 13: Looking ahead, marina-based fans is poised for further growth as all of our markets recover and become free of travel restrictions and airline Lift continues to recover. Let's move to Q&A.

Speaker 14: Thank you. Ladies and gentlemen, the floor is now open for questions.

Speaker 15: If you would like to enter the queue to ask a question, please press star 1 on your telephone keypad now. If listening on speakerphone today, please pick up your handset to provide optimum sound quality. Also, we ask each participant to limit yourself to one question and one follow-up. Please hold a moment while we poll for questions.

Speaker 16: And the first question is coming from Joe Graf from JP Morgan.

Speaker 17: Joey, your line is live.

Speaker 18: Hey everybody, good afternoon and good morning to those in Macau. My first question obviously is going to be on Macau and Rob Patrick. Can you remind us...

Speaker 19: what levels of mass GGR either on a dollar per day basis or as a percentage of 20 90 levels do you need to be at in order to be you know even doc break even obviously the 4q saw block narrowing relative to the 3q

Speaker 20: I'm presuming and love for you to expand on it. I'm presuming what you're seeing thus far early in January is either at EBITDA break even, or maybe more recently generating, you know, some level of positive EBITDA.

Speaker 21: So pessimistic, Joe. We're more than break even. Am I? We're much more than break even, doing just fine. I'll ask Patrick to give us some color on those issues, but I think we're past the break even. We're now in the positive territory, moving towards very positive territory. Patrick?

Speaker 22: Thanks, Rob. So a couple of things to note. Mix is important here. So as you know, we're a mass and premium mass and really a large scale tourism investment company and I think the key thing to note is the market is open.

Speaker 23: Liquidity is in the market. This is going to be a premium led recovery. We invested significantly during the pandemic. And the benefit of that investment is on full display. We have new suite products. We probably, what we think is the best new property we've had in a long time, opened up in Macau. That investment is really showing power in the market right now today.

Speaker 24: There's significant non-gaming scale investment that we've made that is bearing fruit. And so it's great to see the recovery. It's great to see the volumes coming back. You know, it's interesting. I think, you know, Rob has talked a lot about pent up demand over the years. He's witnessed it in other places earlier in his career. We saw it here in Las Vegas.

Speaker 25: and we experienced it fully in Singapore and now we're at a run rate that is really strong. And I think we're seeing that in Macau. And I think the key thing is this is gonna be a premium led recovery. In terms of breakeven, I don't think that's really a consideration anymore. I think we're way past it.

Speaker 26: Yeah, Joe, I think we have to be confident and be very honest and direct. We are in very positive territory and keep moving up. So I think the one thing I would say to you is that we never ever question the power of the base mass market. I would remind you, look at our numbers, base mass in the car and our buildings cost about 1500 Hong Kong.

Speaker 27: per hand as an opening bet. So it's a couple hundred bucks a hand USD. That's the base mass business. The problem we're having right now is you can't get a seat in the games in our buildings. We're running 95, 100% occupancy in those games. The same applies to slots and ATGs. The big question everyone's thinking about obviously is premium mass. And I think you'll be pleasantly surprised when you see the numbers coming out of the premium mass.

Speaker 28: and you'll see liquidity, you'll see resilience in that segment and it's been a very pleasant surprise. Grant, can you add some color to that?

Speaker 29: Good morning everyone.

Speaker 30: Yeah, I think the key the key thing we're seeing right now is that

Speaker 31: the quality of patronage is very high across all segments. So it's not just premium mass, it's also base mass, it's in the retail segment. So we are seeing a very strong recovery in spend per customer. Again, that's not concentrated in one segment.

Speaker 32: It's extremely broad-based and I think what you're seeing in the public numbers on visitation were recovered I think for CMY against 2019 where about 40% of where we were in 2019 Chinese New Year for the first three days.

And we're seeing revenues and volumes outperforming that visitation recovery, which is natural, which is what we're seeing in other markets. So, things are looking truly positive right now.

Great color, guys. Thank you. And then maybe switching over to Singapore for my follow-up question. Obviously your comments on mass gaming, Rob, obviously very strong. Can you maybe talk a little bit about your comments that I believe on slide four saying —

you know, late December and thus far in January . There's been an inflection, at least from the mainland Chinese segment. Can you give us some perspective on the relative, I don't know, you want to look at it on a revenue or EBITDA.

contribution, looking at 2019 levels, and then where that was sort of more recently as a percentage of the total mix.

Yeah, I'll let Patrick address that. Yeah, sure. I think the important thing to note is that there was this pent up demand story in Singapore and now it's blossomed into full on bonanza. And so what we're really seeing is every segment is working.

And so, you know, we had a lot of noise in this quarter because of the hold. You know, we rolled north of seven billion dollars, which is pretty unbelievable considering where we came from. And, you know, the mass play was very, very strong. And so, while we were doing this, we had almost 20% of our room inventory out.

And so when you look at that 477 win number in mass, and you look at the rolling volumes and realize we're out 20% of our rooms, there's a lot of leg room here. There's a lot of room for us to go. And so I want to be careful when we talk about margins and contribution, because we're going to adjust that as we change mix, as we get rooms online, as we go through the renovation, as we change our suite product, as we...

you know, price up as we yield up and as we have access to higher value tourism. So this is really a forward-looking thing more than it is what happened in this quarter because we're going to continue to sort of adjust while we get our mix right.

So, you know, what I would look to in this business is margin expansion over time, more rooms coming online, better product, better service, and of course being able to capture a very strong component of both the IP play and mass play. Yeah, Joe, I think we're missing Patrick's point. We're missing two. You know, we're in a great place.

all this in 2019 with no China participation and or limited China participation. And as Patrick mentioned, a handicap physical plant. We are in a very, very fortunate position with MBS. I think it's going to become a property with a lot of growth. And I believe it's going to be a $2 billion business in the future.

And I see nothing holding it back except for our own renovations, which are extraordinary. I hope you get the chance to see it. And the reemergence of Asian tourism, including China, back into the property. The only regret we have in Singapore, we'd just like to have more capacity because you'll see in this – I think you'll see in this year the power of the – earning power of MBS. It's an extraordinary product and we're lucky to have it. For more information visit www.fema.gov.au

Patrick, just back to your mix and yield comment. Do we interpret that, at least if we look back to 2019, that that China MBS patron had a positive mix on spend per trip or spend per day or gaming revenue per day?

I think it's a combination of factors, Joe. I think obviously the China market is always powerful, but I also think there's cost issues in all these markets. This inflation, in fact, is undeniable, be it energy, wages. I mean, there's a different world out there and you've got to cope with it. The thing about MBS that fascinates us is we believe we can drive.

revenues across the board. We're going to rethink our retail, rethink our table mix, our floor, our room pricing. We think we have product that the demand will be close to insatiable for it.

from a gamer and non-gamer perspective. And we're gonna overcome margin cost, margin by overcoming costs with higher revenues, a lot higher revenues across the board in every segment. That's the approach. We see MBS as a very unique product that's unrivaled in that part of the world, and we can just push pricing across the board, gaming pricing.

ADR pricing, retail pricing, F&B pricing. It's just that good and that desirable. And let's face it, the market right now is using our favor. Singapore is very desirable from a lot of perspectives.

Great, thank you.

Thanks Joe.

Thank you. The next question is coming from Carlo Santorelli from Deutsche Bank. Carlo, your line of life.

Hey everybody, thanks and good evening. Rob or whoever wants to handle this, I was just wondering in the brief time that China has more or less reopened, have you guys seen positive or negative any change in behavior as it pertains to patronage at MBS?

Oh, MBS. That's a good question. I think it's too early to say we're going to see that. I see us as getting plenty of China participation, both in Macau and Singapore, but it's really too early to say. It just happened so quickly and the turnabout was so rapid. I think it's too hard to predict. I think the way this is going to segment, though, is that

We're going to get more than our fair share of the rolling business at MBS that moves in that direction and we'll get the premium mass customer to visit more into Macau. I think our business really is going to split in that direction. I think it's pretty predictable it's going to happen here. And we're okay with that. So

Singapore will get the top of the top, but each of those places will get tons of premium mass demand from China and throughout the region. I also think people underestimate how powerful Macau can become as a desirable visitation place throughout China. It's got everything. It's got the rooms, it's got the access, it's got the- one thing it has beyond Singapore, it's got lots of capacity and lots to offer.

So I think Macau's going to be a very strong international destination. We plan to be very aggressive trying to push people into Macau to see the property.

all of our properties. That makes sense Rob. Thank you. And then just just as a follow-up and I understand kind of looking backwards at things that are Macau-related is somewhat pointless in the environment that we're in right now. But it's just it does stand out a little bit when looking at your base and premium mass table revenues.

from the slide deck. Your premium mass is representing I think 20% of 4.2.19 and base mass kind of more like mid-teen, 16, something like that.

However, the premium mass is down considerably year over year, whereas the base mass is reasonably steady year over year. Is that a whole dynamic on just lower than normal historical volumes, or is there something else that's kind of made those two...

diverge more recently here and then fourth quarter specifically. So I think it's just a visitation issue. It's not a hold issue. It's a visitation issue. I think you're going to find that washes out. I wouldn't take those numbers too much to heart. I think when you look at Q1, I wish, when you see January when those numbers are out there for the market, I think it will all wash away quite nicely. I'm happy it won't.

Enter into your thinking, Carlo. It's a non-event. I think you'll see a surprising strength in both those segments. I would say in Macau we're going to be very strong, very over-represented in the base mass because we have the capacity. We're a scale player. And so we have the capacity in the gaming, non-gaming, retail, restaurant space to do.

extraordinary things in the base mass. And again, as I'll reiterate, base mass in the cow is a different animal than the US. It's a 200 hour base bet, 175 base bet. So it's a pretty special customer. We are going to over-represent because of our scale. But on the other hand, with all of our sweet product, etc., I think we'll also be the leaders in the premium mass business.

So we have a very strong future ahead of us in Macau. I always chuckle people. If you're looking for a negative comment to get into the Cal market, you're the wrong earrings call.

Understood. And then Rob, just quickly, if you could remind us to the extent you guys are willing to share it, 2019, your direct VIP volume, your in-house VIP volume as a percentage of total, would you guys be able to share something like that? We would, but we won't.

Understood. Okay. You could, but you won't. We could share it, we just won't. No, we're not going to do that, but Carl, thank you.

Thanks guys, and you as well. Take care.

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

Hi everyone, thanks. Can you hear me okay? Okay, thank you guys. Steven, go ahead.

The sort of a visitation data for Chinese New Year looks like Hong Kong has been the bigger driver in the recent uptick in visitation. Is there any way to parse out recovery between Hong Kong and mainland China and any reason why spending behavior and recovery may be different between these source markets?

Yes, and I've got a perfect answer to that, Mr. Chum.

Yes, you can see from the visitation numbers published by the Tourism Bureau, the mainland Chinese visitation is at about 30% recovery rate versus 2019 CMY.

So obviously with 40% recovery for overall visitations, Hong Kong visitation recovery has been higher. Mainly I think as a result of just the ease with which it's been able to go and obviously Hong Kong has had a longer time.

a stabilised situation as it relates to the pandemic. So I think from a pure visitation point of view, this is not unexpected. And bear in mind, the transportation support for the Hong Kong visitor only really opened up on the 8th of January . So this has been a very

a rapid increase in Hong Kong visitations. That said, I think we referenced back to comments that Rob made earlier and I alluded to as well. I wouldn't get too stuck on the visitation recovery.

I think in these types of reopening, we're going to see the premium customers come back first, the core customer coming back at a much bigger percentage than the overall presentation. So I think what we're seeing is the quality of revenues and the patronage.

property visitations, our recovery rate in visitations to our own property is far outperforming recovery in the overall visitation numbers in the market versus 2019.

Steve, I was just... The grant's comments, just, you know, again, we don't want to confuse visitation with GGR. There's not necessarily an easy way to make them work. I was recently in Singapore. I walked in one of our retail stores with our retail person, and she told me the sales in the store were like $70 million US.

There's nobody here, no one in the store.

And she said, Rob, we don't need the right people, not a lot of people. I think that's what's happening, Michal, you're getting the right people showing up in mass and it's reflecting in your numbers, you'll see that when the market numbers come out. I think the early adapters to the market are the right people for the market and I think that's why there's confusion in the visitation versus the actual revenues.

Makes sense and maybe as a related follow-up there, there's been a similar dynamic of stronger spend per visitor in the US and ultimately drove much better margins. How are you thinking about the puts and takes to margins in the cow versus what we've seen in other markets?

Prance margins.

Yes, I think first of all our cost structure is in big shape. Unfortunately, we've had to spend extra effort in optimizing the cost structure over the past two or three years. So we've got a very lean cost base right now.

In terms of gross margins on the revenue, I think a couple of things. One is our mix obviously is more favorable going forward just from a gross margin perspective simply because and what I still think my

majority of our revenues will be coming from the non-rolling and slot segments. And then secondly the non-gaming we expect to be growing and that's obviously a much higher margin. We expect to be growing retail, hotel, F&B, actually all the non-gaming segments.

So, you know, that's the structural.

framework for the margin. But obviously the actual flow through and percentage margin we ultimately deliver from this very positive structure is really dependent on the rate of volume recovery. So you still need the top line to recover to a certain level.

before you get the flow through. And then to go beyond that, obviously, we hope and we're all working towards that, is for this market to continue to grow and hopefully, at least in the mass segments and non-game segments, to go beyond where we were in 2019.

So if that happens, obviously, our margin structure should be very positive. So hopefully that gives you a sense of how we think about the structure of the margins of food.

Absolutely, thanks so much. Thanks, Stephen.

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

Great, thanks. I wanted to ask, you know, you've obviously always been very focused on the mass business there, but some of your competitors that have been more VIP focused, are you seeing them do things differently now that there's not the VIP market to go after in the same way there had been? Is it too soon to be...

know, Robin, it's a fast story with premium mass retail, commencement, etc. So we don't change a lot. It was tailor made for we do this environment. Our competitors will adapt and have to change but I don't know. Ram, is there any color in that?

Yeah, I think rather than the competition for premium analysis has always been very intense and I think will continue to be given the dynamics you just referenced. But at the same time I think as Rob said we've got footprint and scale advantage.

from our gaming assets and facilities, I think really positioned us very well for all segments of mass. And then as Patrick referenced at the outset, the product that we've been developing for the past three years, especially in London and the Grand Suites of four seasons.

a really prime position to help us defeat more competitive premium lifestyle segments of the market as well as I think hopefully to drive overall high value tourism to Macau over the coming years.

And I do echo the point about international tourism as well. I think our footprint combined with our new products and our traditional strength in mice and international marketing network.

really position us very well to bring those high value guests to Macau as well. Great. Thank you. Thank you for that, Keller. And then just for my follow-up question on Macau, can you give us sort of a rough sense of that dollar commitment that you've made to invest over the next ten years?

Thanks. Sure. I think one thing that would be helpful is if you turn to page 22 in the presentation, you'll see some details on that. So it might be best to refer to those pages because we do break it out and there are several pages behind that that explain what our concession renewal commitments actually are.

So it's there in the presentation. Thanks. It's always tough to get through all of your slides before things go. No problem. I apologize. You know, I think the key thing here is that we're very committed to investing in the Macau market. We think this investment will drive additional long-term tourism value and diversification of Macau's economy. We're very excited to make these investments.

And we think these are things that will really help achieve our goals and the goals of the government. So we're looking forward to it actually.

really help achieve our goals and the goals of the government. So we're looking forward to it actually. Thank you.

Thank you. The next question is coming from Sean Kelly from Bank of America. Sean, your line is live.

Hi, good afternoon. Good morning, Grant. So just high level, as you look through what you're seeing probably real time, could you give us just your latest thoughts on maybe the pace of recovery here? Do you expect things to be pretty linear or any chance of a...

reason that that would be kind of different from the reality or how are you seeing your booking shape up, you know, and the patterns you're expecting to see over the next couple of months? I begin by saying first of all, we're just thrilled to be open and making money and seeing demand like we're seeing. I don't think any of us have the aptitude or the...

insight to tell you what's going to happen post-change New Year's. But I do think longer term, you have to have real strong confidence. When you get to see these numbers that we are seeing, that this is a market that's going to rebound, this market has a strong base mass, premium mass. Some of the fears feel in the market about, gee, what's the quidly like?

what's the resiliency, I think those fears will be pushed aside. What's the trajectory and how fast it happened? I don't think any of us have the gumption to venture a guess. I think it'd be silly. We just feel fortunate. We're open, we're operating, we think it keeps getting better, not worse.

I don't believe COVID is going to be, you know, obviously China's going through a different trajectory than we did here in the US. But hopefully that won't be a problem. I again don't want to speak for anyone I can't speak for. But if things keep going like they're going, we'll be in a very happy place in 2023, especially I think summer in the second half of the year.

As normal travel patterns resume, Hong Kong gets back on speed, mainland China, I think there's a lot of growth potential and a lot of good thoughts coming our way vis-a-vis the future. We are big, again, as a third party, we're not going to tell you that we believe in this story very strongly. We believe in our assets very strongly.

We believe in international tourism in Macau very strongly. So we're not going to predict when it happens, how it happens, how fast it happens, but we feel very positive about what's going to happen in Macau in the long term, very positive. And we're looking to investing money in there and getting back to where we were in the past in Macau. We couldn't be more positive on Macau in the long term.

Great, thanks for that, Rob. And then maybe a little bit more specific one for Grant, if I may, but just wanting to dig in a little bit more on just the labor and staffing side of what you're seeing in Macau right now. You talked about the margin structure, high level, but are you fully expecting to return to...

levels of staff that you had pre-COVID? Are you already there? Will it be even above those levels? What's needed and what have you optimized? I know those people have many of them have found employment elsewhere. The market has grown since where we started. How do you think about maybe either FTEs or overall operating expense run rates relative to?

referencing exactly back to 2019. And also a mix of products has also changed quite a bit through the London app. We do have more high quality non-gaming asset base to operate as well. So to give you a bit more color, today we are...

short of manpower relative to our operating capacity and relative to the demand that we're seeing. So we're not operating one of the Sheraton Towers as we speak. So we are minus 2200 rooms.

from our operating capacity and our newest hotel London Court which we saw opened in the past year were not at the full operating capacity for that high-end all suite hotel.

We're still only about two-thirds of the way through in terms of our ability in manpower to operate the whole hotel. So both at the top end and at the math end, we are still short of manpower to operate the whole capacity and we'll be progressively hiring.

to fill the gaps as we go through the recovery. And hopefully within the next few months, we're gonna be in a better place relative to our full operating potential.

because we clearly see the demand pattern. I think it's going to urge the whole industry to staff up and to be able to operate, especially for these peak periods. And that's another part we have to have a crystal ball as Rob says.

on the post-CMY, but clearly the early indications of...

metrics like the demand for the hotels is telling you that yes, the demand is staging a strong recovery.

Thank you very much. And obviously, we're going to have to stop. Thanks.

Thank you.

The next question is coming from Chad Benon from Macquarie.

Chad, your line is live.

Hi, afternoon. Thanks for taking my question. In the slide deck, you highlighted principal areas of development being Macau, which we just talked about, Singapore, which we talked about, and New York, which I was wondering if you could elaborate a little bit more on. But second part of that question is, I know in the past you talked about other –

potential opportunities in Asia like a Korea or Thailand you know years ago we talked about Japan wondering if if if those are going you know quiet at this time so I guess firstly on New York and then secondly potential Asian opportunities thanks. Let's reverse your mind I'll reverse it just I think we we all know Thailand has been discussions there and we're

York which is an extraordinary and unique opportunity and I think for the winning bidder of bidders it's going to be a an amazing opportunity because they're very simple dynamic of a huge market with limited capacity there's only a few casinos there it's probably the only place in the US where you can have a millions and millions of people

and yet there'll be probably just a handful of casinos total. The win per units there will be exceptional. The lucky winner is going to do very, very well. I think the evidence of the market is clear just by looking at the three operating properties, have their table games, and really don't have much of a great product right now in New York as far as...

room capacity, yet still doing, approaching 2 billion US dollars with just slot machines. So our approach is very much an LDS. It's anchored by an LVH historical approach, which is scale and quality. We're not looking to build a casino, looking to build not a regional casino, but rather a true large hotel with spa convention space.

Dozens of restaurants, a new theater, a huge entertainment feature, a transformational product which will positively impact the community and grow tourism. A powerful statement. We're not looking to be in this thing in a limited way. We'll be all the way in. And we think if we do it, it'll be transformational for the county we're working in.

Very good for the people in the county and something they be very proud of and it will drive tourism Outsides tourism into Nassau and our bid is very much traditional in the thinking of LBS large-scale with numerous non gaming assets lots of meeting space probably 400,000 square foot meeting space So I view New York very much very unique

to the rest of the United States. It's a population in the many millions. You have just a couple casinos, very different here in Las Vegas. We've got a huge local market, but dozens and dozens and dozens of casinos. There you'll be basically alone. And so, it's going to be very, it's an exceptional opportunity. It won't come along again. I think this is one and done.

So we're trying very hard, and we've been trying to do New York for a number of years, but it looks like this is finally someone's opportunity. Hopefully it's ours.

Thank you very much, Rob. And then secondly, just wanted to ask another one on Macau. Now that you've had some more data in the market, Grant, it seems like there's an even bigger shift towards Peninsula or I'm sorry, versus to cotai versus Peninsula than we've seen in the past.

I was wondering if you could confirm that or if that's really just kind of a mix of, you know, a reflection of what we're seeing from the different modes of transportation. Wondering if that's a trend that could continue in 23. And then related to that, how are you thinking about your asset in the Peninsula if there's capex opportunities? I know that's not part of the big...

structurally, we see and we have always said that Cotai will become the primary hub. I think even pre-COVID, we were already more than half of the mass revenues.

from Cotai. And I think that trend will continue. I think there's a lot of different reasons, but I think at its heart the main reason is just the cluster of world class integrated resorts that you have on Cotai.

And what this, I think, next generation of these lifestyle consumers are looking for from Macau as a destination, and all of the investments in non-gaming that are going into basically making these results even more desirable over the next 10 years, all of those structural factors.

surely will continue to push the balance of revenues towards the co-tire side. And that's a structural issue that will continue to evolve over the long term. As regards to, you know, where does that one asset on the peninsula?

We do intend to reinvest in that asset, but clearly the vast majority of our capital will still be going towards our co-type properties.

Thank you very much. Appreciate it.

Thank you. The next question is coming from Brant Montour from Barclays. Brant, your line is live.

Hey everybody, good morning. Thanks for taking my questions. Starting on Singapore, I was curious if you could compare the spend per visitor that you're seeing there to what we saw in Las Vegas and...

2020 and 2021. If that's sort of holding up in the same way, if the curve looks different quarter over quarter, and then if you want to throw Macau early days into that comparison, that would also be helpful.

Yeah, I think it's really hard to compare between markets. The key thing to note is that it's really all about pent up demand, consumer tourism experience and the products that we offer and sort of the nature of those assets for high quality tourism. So it's not really fair to compare between markets. The price points are different.

consumer behaviors are different. It really doesn't look the same. What is thematically similar is the pent up demand story. And you know Rob, as I said before, Rob's seen it in his career in other locations. We experienced it here in Las Vegas in a very strong way. We saw it in Singapore in a very strong way and it's still in effect. And we're starting to see it in Macau now and it's coming on strong.

It's really the nature of consumer behavior as opposed to the specific price points in each market.

Okay, that's great. It's hard to be, Patrick's point, think about Singapore's market GGR versus Macales. Macales could be a $25, $30 billion GGR market, has been higher historically, and Singapore just doesn't have the capacity. And then Las Vegas is much more of a, it's got a gaming component, but it's got very strong non-gaming. So it's almost impossible to do apples to apples.

That market, it's so outsized when it gets back to full capacity, it's harder to compare it to anything. It's powerful.

Okay, thanks for that. And then on slide 22, the long-term commitment to Macau slide, on the capital, the left side of the slide, I was curious, looking at your plans for the next 10 years, if you think you're going to be able to achieve the next 10 years, what are you going to do to achieve

return levels commensurate to recent projects that you've done in that market, you've enjoyed in that market.

Yeah, we sure do. Again, you're talking to a bunch of people who have been doing business in Macau for 20 years and we've seen the returns. We've seen what non-gaming can do. Our theaters, our retail, our entertainment driven billions and billions and billions of dollars and they will in the future as well. We have no concerns whatsoever about investing and getting a solid return on non-gaming.

return just like we've done in the past. I mean, on our current assets, mostly non-gaming. The lion's share of our investment, Macau, is non-gaming. The great majority. That's worked out pretty well for us. So we think the next 10 years will continue that trend and we're very happy and very committed to Macau.

Excellent. Thanks so much, everyone. Thank you.

Thank you. The next question is coming from Ben Taken.

From Credit Suisse, and your line is live.

Hey, how's it going? Just a quick one for me. Historically, capital returns been really important to you guys. Obviously, Macau is just beginning to ramp and there's a lot of areas to invest, but how are you thinking about the dividend these days? Is that still important and if so, how should we think about timing of that?

You know, if Sheldon were here, he would say yay dividends. I'm so excited. I think someone put us on hold in Macau. Sorry about that. Sorry about that. Brief commercial from Macau. So as I was saying, you know, if Sheldon were here.

business returns and as we see normalization of cash flows, we're going to look to start the dividend again and be very shareholder friendly. But at the end of the day, we're very focused on the strength of our balance sheet of new development. You heard Rob talk about New York, it's very exciting. There are other things that hopefully we get a chance to do in the near term.

And opportunistically, I think we'll continue to put capital where the highest returns are. And as part of that, the dividend will be fundamental to our shareholder return strategy. But I think we're going to wait and see where operating cash flow ends up and we'll make some assessments at that point.

Got it. Thank you.

Thanks, Ben. Thank you. And the next question is coming from Steve Wychinski from CIFIL. Steve, your line is live.

Hey guys, good afternoon. So Robert, whoever wants to take this, I mean, if we look at visitation in Macalibra the last, let's call it week or so, around the start of Chinese New Year, it does seem like it has been pretty strong. And I guess, is there any commentary or color you could give us about the spending patterns of these folks that are coming into the market? Meaning... Thanks.

Are these folks gambling as much as they did before? Or is some of that spending being pushed more into the non-gaming side of the floor? And maybe it's just too early to tell. But I think with how high Chinese savings levels are right now, I'm just wondering if you can provide any color around that.

Yes, yes, and yes. They're spending in retail, they're spending in gambling, they're spending, as we referenced earlier, Steve, it's just the right customers showing up. And I think this is historically how it's worked out in recoveries where those who are the most aggressive gamers and retail spenders show up first. And we're seeing that.

strongly in the cow. It's a very good audience, a very strong audience. You'll see it in the market numbers when they come out. It's really gratifying for those of us who wait a long, terrible three years to see these days return and the return. And I think the real question is, how do you make a difference?

These customers are now the question, how many more are coming behind them? Because to your point, visitation has been mediocre out of mainland China relative to what had been previously. We're not even there, yet we're hitting some pretty big numbers coming out of McSally in the market. So we're very enthused about, I don't think, it's not necessarily choosing gaming over retailing, they're doing both, and then they're eating and shopping, having fun doing every...

And we've got a very encouraging start to this whole thing after the last three years. Grant, do you want to add some color to that and the issues you can raise that I haven't?

No, I think it's just as you said, the nature of these reopenings, you know, it will attract the high quality customers first. And that's what we've seen. And I think we saw that in Singapore in April as well, you know, we had much stronger recovery in the Southeast Asian.

overseas spend in Singapore versus the recovery in the tourist arrivals. And I think Macau is also following something similar, except for the fact that Macau has a much bigger advantage in being able to...

support visitation not just by international airlift, regional airlift, but also by land and sea as well and domestic airlift connecting through southern China as well. So I think it's, let's see how, what the pace of visitation.

I think you are in a good position. Last comment, Grant. That's a great one in that this is on the air-dependent market like Singapore. You don't need the airlines. You can come other ways. Access to Macau is mostly vehicular boat. So I think it's a huge advantage for Macau that as the population conquers focus in more attention to what contacts electric architects leave our languages and you're alwaysalis way of guarded Coast Coast, so I think that should probably be connected to,

the virus situation gets more confident. There's nothing to, no impediments to massive growth and visitation coming to Macau from China. That's a very positive point. But Steve, look, we just, we are pleased we're seeing, and they're spending in every direction. So we feel very fortunate, hopefully just continues to ramp up from here.

That's great color. That's it for me guys. Really appreciate it. Thank you. As always.

Thank you. The next question is coming from David Katz from Jefferies.

coming from David Katz from Jefferies.

Hi, this is Cassandra on behalf of David. Happy Chinese New Year to everyone.

I think a lot of my questions have been answered already so I hope it's not getting repetitive. You've mentioned cost issues in all markets, especially in energy wages. So could you discuss to what extent are those permanent and where we might be run trading in terms of EBITDA versus 2019 level today?

Well, I'm not going to discuss EBITDA at this point except for what you've seen in Singapore. I do think energy is fascinating. It does vacillate. It doesn't go one way, as you well know, whereas wages, I think, worldwide are going to be an issue for everybody. And I think we will deal with that. They're not, I don't see them coming down a whole lot. Again, our resorts and our capacity constraint ability.

to price up. The great thing about our business is you can price up and retain your margins and that I think will be our strategy in Singapore and also in Macau. I don't think wages are going to decline greatly. I think Grant alluded to efficiencies and then that's important to get a large workforce and tens of thousands in Macau. So more efficient and better at doing what we do, that should be helpful.

But I think we're all going to learn to live with, at this point, in the U.S. and Asia, higher wages appear to be in the structure for now. Patrick? Is anyone else here?

I think the key thing is that by the nature of our business, we have resiliency in the face of inflation. As Rob mentioned, we have a lot of flexible pricing. Hotel rooms, gaming pricing, the way we operate food and beverage, the way we operate all of our non-gaming amenities, these are not long-term contracts. We have the ability to put the market.

So, while there are some structural increases around wages, around inputs that we use, at the same time we have the ability to price because of the unique nature of our products, the experiences we offer, and to be there at the positioning of the products that we have. You know, we've invested a lot over many years in both markets, the reason why they're so strong. So in our mind, inflation is a real thing. We have to take into account... We have to take into account these difficult issues which we think are very difficult and

but we have the ability to work through it and actually grow the margins of our business over time. Great, thank you. And shifting to New York, have you shared more to schools publicly about investments you expect to make if you win the gaming license versus if you don't?

The other current thought in our heads is about four to five billion US dollars Again, this is not a regional casino. This is a full-blown resort with mice entertainment retail restaurants It's the real thing. It's not meant to be a small time investment we're going all the way in and building something transformational that drives tourism and

we think will be the biggest, in terms of the casino business, will be the biggest revenue generator.

Great. Thank you so much for taking my questions. Thank you. Appreciate it.

Thank you. And the last question today will be coming from Dan Politzer from Wells Fargo. Dan, your line is live.

Hey, good afternoon, everyone, and thanks for tuning in. I guess first on Macau, I know VIP was historically about a quarter of your total business. I mean, to what extent, if any, have you seen this customer return, and in what form? Has it been more of a credit, a direct VIP-type customer, or is this customer showing up in premium mass?

So one thing to note is our VIP contribution was much lower than that.

So, you know, let's call it high single digits, low double digits, historically. We've always been mass and premium mass driven.

So it's on a contribution basis because the margins in premium and VIP and to be fair, junket business were always structurally much different than they were for our mass business.

So we've always been led on a contribution basis by our mass.

by our mass play and our premium mass play. And you can tell that by our asset base and how we speak to our customers and the type of tourism we attract. That being said, I do want to turn it over to Grant for some additional comments.

Thanks Patrick. Not a lot to add. I mean all of our rolling business currently is in the Premium Direct program and I think the second point is Premium Mass is recovering much, much faster than Premium Direct.

I think that's what we're seeing right now.

right now.

Got it. And then just to follow up on the New York investment, the $4 to $5 billion you mentioned, I mean, is there – should we expect a commensurate return on that sort of project as you've seen in your Asia-based investments or given the high-density population, the spend per unit? Is it reasonable to think that there could actually be upside to that kind of 20% historical return?

I think for us, we're very focused on return on invested capital. So, you know, Rob and the rest of the team really looks everywhere that we can to try to best deploy capital and the highest return outcomes.

And so we would be interested in New York if we didn't think the returns were there.

We think it's a very strong potential opportunity. And for us, it's going to be about the jobs we create, about the tourism we drive, about the investment in the local community, the relationships that we have. In every market that we're in, we're typically the largest trade partner with small and medium enterprise. We're looking to develop deep community roots so we can support the community.

and really show this industry is something that can benefit everyone. So we're very excited about it. We think the returns are there. Otherwise we wouldn't be interested.

is something that can benefit everyone. So we're very excited about it. We think the returns are there. Otherwise we wouldn't be entrusted. Got it. Thanks so much.

Thank you.

Ladies and gentlemen, this does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.