Sands China, a prominent Macau concessionaire, expresses optimism in the ongoing recovery of the base mass segment despite transportation infrastructure lagging behind 2019 levels. The company’s newly appointed CEO and President, Grant Chum, highlighted the encouraging trends during the parent company Las Vegas Sands’ 4Q23 earnings call.
Positive Trends in Base Mass Segment
Chum noted that the base mass segment is exhibiting robust demand, with revenues growing by 7% sequentially in the fourth quarter. Although this growth is slower compared to the premium mass segment’s 13% growth, positive momentum is building compared to earlier in the year. Base mass revenues reached 97% of pre-COVID levels at US$732 million in Q4, while premium mass win reached 101% at US$685 million.
Chum emphasized that base mass progress is notable, and visitation trends in the fourth quarter indicated that Macau recovered to almost 90% of 2019 levels. The recovery is attributed to improved transportation infrastructure and increased interest in non-gaming events.
Transportation Infrastructure and Customer Desirability
Chum discussed the improvements in transportation options and the increasing desirability of customers to visit Macau. Despite transportation challenges, passenger numbers on the company’s Cotai Water Jet services recovered to 93% of pre-COVID levels in Q4, with sailing capacity at just 52%. Foreign visitation to Macau also rebounded to more than 80%, even though direct flights from foreign countries were still below 60%.
“Clearly, people are enthusiastic about coming even though transportation capacity is still recovering,” Chum remarked.
Confidence in Capturing Base Mass Market
Sands remains confident in capturing a substantial share of the returning base mass market, even with the Phase 2 renovation of The Londoner Macao set to accelerate in the second half of the year. Chum acknowledged potential disruptions during this phase, particularly in upgrading the property’s hotel inventory.
“We have done the bulk of the work in public areas, externals, the façade, retail mall, and one of the two casinos in Phase 1,” Chum explained. However, Phase 2 will focus on renovating the majority of the hotel inventory and the gaming floor on the Sheraton side.
The Londoner Macao’s Transformation
LVS Chairman and CEO Robert Goldstein expressed confidence in the eventual transformation of The Londoner, comparing it to a juggernaut on par with The Venetian and beyond. He anticipates that the completed transformation will make The Londoner and The Venetian assets capable of generating US$3 billion by themselves. While acknowledging disruptions in the short term, Goldstein emphasized the unique market position that Sands will achieve in 2025 and beyond.
“The end result will be well worth the pain,” Goldstein concluded.
Sands China’s positive outlook, despite ongoing challenges, underscores the resilience of Macau’s gaming industry. The recovery of the base mass segment, improving transportation options, and the ambitious transformation of The Londoner Macao position Sands for sustained success in the evolving market landscape. As the company navigates through disruptions, the long-term vision emphasizes the strategic importance of capturing and retaining a significant share of Macau’s thriving gaming market.