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Cotai Expo hotel extra to licence capex, says Goldstein

May 30, 2023 Macau Earnings & Filings

The idea of a new hotel tower for Cotai Expo at the Venetian Macao casino resort would represent capital expenditure (capex) additional to the MOP30 billion (US$3.72 billion) pledged by Sands China Ltd as part of its successful bid for a new 10-year Macau gaming concession that began in January. That is according to Robert Goldstein (pictured), chairman and chief executive of the parent company Las Vegas Sands Corp, in an interview with GGRAsia.

Mr. Goldstein said regarding the plan for the additional hotel: “We don’t have any approval yet to do that. It depends on the government’s willingness to let us invest in a new hotel. We’ve had those conversations: the government, they know our intentions, and we will wait for their advice.”

Asked if such a hotel would be part of the concession-investment package, Mr Goldstein stated: “No. Separate.”

Mr. Goldstein is also the chairman and CEO of Sands China. His visit to Macau marked a formal launch event on Thursday for another of the group’s Cotai resorts, The Londoner Macao, including an opening for its 6,000-seat arena.

Of the MOP30 billion already pledged by Sands China up to the 2032 end of its current Macau concession, MOP27.8 billion is to go on “non-gaming projects that will also appeal to international visitors,” the firm had said in a December statement.

Sands China’s president, Wilfred Wong Ying Wai, had been cited recently as saying a new hotel tower might be built atop a circa 18,000-square-metre (193,750-sq.-feet) supplement to Cotai Expo. The meeting space expansion is something that is already part of the concession commitment.

Mr. Goldstein stated in his comments to GGRAsia, referring to the Macau market: “We’d like to build a lot of hotel towers.”

He added: “Even in the darkest moments of the pandemic, we’ve always said this market will come back strong… We’re big believers in Macau. We’ve been here 20 years. We hope we’ll be here many more years.”

Asked whether any new hotel at Cotai Expo would be for customers in the meetings, incentives, conferences and exhibitions (MICE) segment, the executive stated: “When you build a great product, it works in midweek, it works for MICE, for the weekend [customers], works for FIT [flexible independent travelers], it works for gamblers.”

He added: “When you build great rooms and [offer] great food, it attracts. We learned this in Las Vegas 30 years ago.”

Mr. Goldstein noted, referring to Macau’s expressed public policy preference: “We can’t build more gaming. So whatever you build by definition will be a non-gaming amenity.”

2023 spending, tax rebate

Asked about the concession-related 2023 capex plan for Sands China, and specifically what had been approved by the government, the CEO stated: “I don’t want to discuss what we talked to the government about. It’s not public information.”

Regarding the role a glass conservatory – proposed for an existing garden next to The Londoner Macao – would play in the company’s appeal to gamblers and general tourists, Mr. Goldstein said the aim was to make the whole product offer “appealing to millions of people”. It was about making Macau a “must-see, must do,” destination, he added.

The executive was also quizzed about the workings of the Macau government’s announced policy of an up to 5-percentage-point rebate on Macau’s 40-percent gross gaming revenue tax rate, for play generated by overseas players. GGRAsia has made several requests to the Macau government to clarify the specifics of how the system is to work.

Mr. Goldstein stated, without explaining the specifics: “It’s been clarified [to us]. It’s not material.”

He added: “The customers don’t even know it exists; they don’t care. I think what people forget sometimes is the customers aren’t saying, ‘What’s the rebate on taxes?’ The customers want products, they want quality. That’s what we give them.”

The existence of a dedicated zone for foreign players within The Venetian Macao was confirmed to the media in February by people with knowledge of the matter.

An industry insider not from Sands China recently suggested to GGRAsia that Macau operators – which under the new concession system in place since January are permitted to set up foreigner-only gambling zones on their properties – were still working out how to tailor those areas to maximize their appeal to a clientele drawn from beyond China.

Mr. Goldstein told the media: “That’s true. They want roulette and they want blackjack, they want everything. But baccarat is still the dominant game in Asia. But as you diversify… it doesn’t matter. We have all those products.”

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