Weeks before the deadline to submit a bid for the gaming tender (September 14), Wilfred Wong is optimistic about Sands China Limited (SCL) being able to continue to execute “the vision and the dream” the late Sheldon Adelson had for Macau and operating here another ten years, the duration cap imposed by the new gaming law.
Sands China president’s confidence stems mostly from the fact that the company “has already been developing its operations” in the direction defined by the government in the current tender, namely the investment in non-gaming ventures like events, entertainment and gastronomy as well as market diversification – “but we can do more.”
Moreover, he pointed out the contribution made by SCL to the community these two and a half years into the pandemic and during the concomitant economic crisis. “We put our hotels, our staff volunteers, and our facilities at the service of the government and the community.”
In round numbers, “our volunteers put in a total of 7.4 million working-hours over 27,000 shifts for NAT tests alone,” Wong highlighted, as an example of his company’s commitment to the well-being of the community. “We are team players.”
As to the hard-ball game, Wong considers that the new gaming law lays out a “clear direction” for concessionaires. However, he does not foresee big changes in the near future for the industry but believes that it will happen “in the long-term.”
In an exclusive interview in his office in Cotai, as The Venetian celebrates its 15th anniversary, Wong stressed the importance of linguistic abilities and of a strong English press in the city, if “we are fully committed to being an international center of tourism.”
Macau Daily Times — The Venetian opened 15 years ago as the biggest casino on earth. It was the corner stone of Cotai Strip. Do you foresee, in some way, a return to those golden days?
Wilfred Wong –We’re in the middle of Macau changing its branding, because 15 years ago apart from gaming and some heritage, there’s not enough attraction as a tourism center and with the development of integrated resorts, such as The Venetian, The Parisian, The Londoner and [those] from other operators we’re seeing a change in the branding of Macau; it is truly [becoming] a tourism center; a destination known for retail, gastronomy, MICE exhibition, entertainment. That all helps to change the direction of Macau toward a tourist attraction. With the recent cleaning up of gaming, we will develop more healthily and in the long-term improve the attractiveness of Macau as a tourist destination for the world. Obviously the government wanted us to try to promote Macau overseas, so that there are more tourists from outside of mainland China. We will do that, and I think that in time this is going to help diversify the sources of tourists. Before that, we will have to get our staff prepared. Language ability is one issue – if you want to receive guests from Southeast Asia, from Japan, from Korea… How many of our dealers can command those languages? We will have to include in our plans more language training.
MDT – Surely, with the borders closed, that is a challenge.
WW – We can only plan on the assumption that the border will open one day.
MDT – Do you agree that zero-Covid policy, two and a half years into the pandemic, is the right path?
WW – Macau can only adopt the same policy as the mainland China. Because we all know that 70% of the tourists used to come from China, and that percentage may decrease in the long run. In the meantime, we’re still very dependent on them. 20% used to come from Hong Kong, which is closed. So, for a long time to come we have to cater for visitors from the Chinese mainland. But these visitors may be different from those in the past because the demographics have changed; we are seeing younger tourists attracted by the good food, the good shopping, the good entertainment, and the many photo opportunities in the city.
In a survey in 2019, apart from the St Paul’s Cathedral, the most sought-after destination was The Venetian and The Parisian, because there you have many photo opportunities, and of course now there’s The Londoner. We, as an operator, have to look at the trend, have to improve our hardware and software in line with the trend, and that’s why we’re investing so much. We’ve already invested something like MOP120 billion in Macau to make our properties attractive.
MDT – Gaming has been the major contributor to the GDP, something like 70-80% in the past. How is it possible to return to that when the government is saying that gaming should be not more than roughly 25% of GDP? Do you see any alternative to replace the riches of gaming?
WW –This will take time, because the percentage of any industry depends on the growth of that industry and the other industries relative to each other. So, hopefully in future years, gaming will continue to develop healthily, whereas the other industries will grow faster. That’s likely the long-term objective. But to say that this will happen immediately or in the near future may be a bit too optimistic.
MDT – In the meantime we have the new gaming law. Do you see it as a good development for the sector?
WW – First of all, it shows a clear direction in which the integrated resort business has to develop – not [to be] totally dependent on gaming. We have to look at the non-gaming aspect of our operations. In 2004, we had something like 1,700 members working in the non-gaming areas. Today, we have 14,000, which is like 52% of our workforce. In our business operation, MICE, retail, entertainment, F&B, already take 52% of our labor force!
MDT – So, youí are already complying with the direction of the new law?
WW – We have moved in the government’s desired direction. In the new tender document they listed 11 areas, and really these are the areas that to a greater or lesser degree we have already been developing. There are some [areas in which] we are more invested, like the MICE sector: 85% of Macau’s MICE business is ours. Also, the entertainment business. So, we are very compliant with the direction in which this is going. Of course, we have to do more.
MDT– As an example, MICE depends on local infrastructure (seamless connections, etc.): it seems that, for instance, the airport is not meeting those expectations.
WW – You have to think outside Macau. We do have an international airport at our doorstep: Hong Kong. The [HK-Macau-Zhuhai] bridge has never been really used! In fact, we were planning when the bridge opened to use the Hong Kong airport for large scale convention event [access], because the HK airport already designed a transit arrangement for people arriving internationally: not having to go into Hong Kong, but take a direct transit to Macau. In the other [direction] is the Greater Bay area. Right now, high-speed rail comes to Zhuhai, and then there’s the infrastructure linking up with Hengqin and Zhuhai.
MDT – But then we are talking once again about the Chinese mainland, the same Chinese marketÖ
WW –For convention and MICE, that’s fine. […] We have large groups from China attending conventions. We’ve had conventions with 10,000 participants.
MDT – SCL drew $201 million from a credit revolver earlier this year, providing the gaming company with ìenough capital to survive through the end of this year.î In Q2, revenues were nearly cut by half. New GGR lows in ìdecades,î Macau casino operators post losses topping USD2 billion as Covid hits – how is SCL dealing with these cards in the bid proposal?
WW – It just shows the depth of our financial strength. We have survived for two and a half years already and there’s the support of the parent company. LVS just lent us $1 billion to support our bid. Any bidding has to be on the basis that we have confidence in the future, any bidding has to [anticipate] business will return to normal, sustainable, one day. Whether that is this year, next year, we don’t know.
MDT –There is no alternative.
WW– There is no alternative, but judging from the way the tourists reacted, once a lock down is over, once the boarder re-opens, there’s immediately more people coming in. It’s very fast.
MDT -Are the leaders in China showing signs that the Zero-Covid policy is going to change soon?
WW – I have no crystal ball. But obviously, the Chinese leadership is well aware of what’s happening in the rest of the world. They are of course, considering their own situation within the country, because every country has its unique problems. And you shouldn’t forget that China has a very large rural population, still about 500 million people, and the medical facilities may be inadequate in these areas. So, they must have their own consideration and I’m sure they are looking at different ways of dealing with the problem. Higher vaccination rates, a cure, medicine and all these things.
MDT – Can Hong Kong and Macau serve as laboratories to test and advance the policies?
WW –Whatever happens in Hong Kong will be under close observation. This three-day quarantine plus four days home isolation, China’s government must be observing it very closely. China is also now saying we can shorten the quarantine period from 14 days to 7. It is a step forward, as the country [learns] more about the development of Covid, as the country takes more reference to the international situation and practices, as with the practice in Hong Kong. I’m sure they’re going to adjust the policy and Macau has to follow, because naturally 70% of our customers come from the Chinese mainland, at this stage. Maybe in future there will be more from foreign destinations, but until the border is opened to foreign countries, this won’t happen. So, we still have to rely mainly on what happens in the Chinese mainland.
MDT – I was recently in Singapore and visited Marina Bay Sands which was crowded. Within the LVS universe will there be a shift in your center of revenue from Macau to Singapore or even to other locations in AsiaÖ do you still have plans for Taiwan?
WW – No. Right now it’s just Macau and Singapore. We [also] sold Vegas and we’re looking at other locations in the U.S.. We are interested in other destinations in Asia, but there’s no strong indication at this stage. It’s really focused on Singapore and Macau. Singapore has come back very strongly, and that positive revenue has almost covered the loss in Macau. It’s lucky that LVS has these two operations [in Asia]. We are very pleased that the Venetian [came] here 15 years ago, and that has spear-headed the integrated resort business in Macau. As a company we are very privileged to be here. The late Sheldon Adelson’s vision made this happen. We are here to execute and make sure that his dream goes on.
MDT – So your prospects are optimistic?
WW – We are optimistic. That is why we are going confidently into bid for the next 10-years.
