VIP and premium players are staying “below the radar” until the Chinese government levels off its current crackdown on corruption, according to Sheldon Adelson, chairman and CEO of Las Vegas Sands Corp.
“They’re staying below the radar until the Chinese government says ‘we are not hunting down potentially corrupt people,’ because high rollers… they say they will stay low and won’t be conspicuous in their spending habits until the witch hunt –
whatever it’s called – until the crackdown on corruption levels off,” Mr Adelson told an audience of students at the Institute for Tourism Studies (IFT) yesterday.
IFT invited Mr Adelson to share his insights into the hospitality and tourism industries, and to provide a glimpse into his own experience of turning his company into a leading global developer of destination properties.
Asked to comment on the decline in Macau’s casino revenue and how it could potentially harm the city’s economy, the Las Vegas Sands chairman recalled that the most popular explanation for Macau’s gaming revenue slowdown has been the Chinese government’s anti-graft campaign.
“People blame it on the crackdown on corruption in mainland China. Depends who you talk to. Steve Wynn, my friend and competitor, says that the VIP players jumped into their foxholes and I say that they stayed below the visibility radar because, whether [or not] they’re legitimate business people that are making millions of dollars, they don’t want to come in and be ostentatious,” he stated.
Mr Adelson recalled that visitation to Macau has not declined over the past months. But it doesn’t mean “every person that came in is what we call here a VIP player that could spend a large amount of money in each visit.”
It’s not just VIP players who have been avoiding spending large sums of money in Macau, according to the Las Vegas Sands chairman. Premium mass players – who Mr Adelson says can usually bet between USD5,000 to USD100,000 – have not been spending as much as they did before. “A lot of those people are laying low as well, because they don’t want the government seeing them spending what they think are large sums of money,” he recalled.
Nevertheless, Mr Adelson is confident that Macau’s gaming revenue will see brighter days in the near future: “Everything in life is cyclical. Night follows day, day follows night; and recession follows expansion, expansion follows recession…this too will pass, and this too is cyclical.”
Macau’s casino revenue slumped for the eighth consecutive month in January – the longest losing streak on record. The city’s total gross gaming revenue fell 17.4 percent to MOP23.7 billion last month, according to the Gaming Inspection and Coordination Bureau. Analysts are forecasting weaker takings over the Chinese New Year holiday this month, Bloomberg reported.
When asked about the development of Macau’s hospitality industry, Mr Adelson spoke of his experience in the MICE business, which he said can help hotels to increase their occupancy rate during the week and over weekends.
The Las Vegas Sands CEO acknowledged that he favors the integrated resort model, which combines a number of facilities and different purposes. “I like the idea of an integrated resort because all my life I’ve been changing the status quo. First of all I’ve got to identify what the status quo in the industry is; if the status quo is only to target and address business travellers and you have no other way to fill up the weekends… my approach to it – because I was in that business – is what’s called MICE (meetings, incentives, conventions and exhibitions),” he reiterated.
“I rely upon the MICE business because I was in the MICE business and I realized the synergies with the hospitality industry,” he added.
Mr Adelson said he’s been an entrepreneur since he was 12 years old, having developed dozens of businesses throughout his life. “I’m probably stuck with an attention deficit disorder; I lose my patience very quickly and I want to go into something else. Entrepreneurs want to accomplish things; it’s not just about making money,” he said.
He has been in the convention and exhibition business since the 1970s. Looking to build a convention and exhibition center, he bought The Sands Hotel in Las Vegas in the 1980s. “I wanted the hotel to have synergies with the exhibition business,” he told IFT students, adding that later on he “tore down The Sands to put up a property called The Venetian.”
Today, Las Vegas Sands Corp operates various casino resorts and convention centers in the U.S., Singapore, and Macau, through its subsidiary Sands China Ltd. About 250 students and faculty members attended yesterday’s session with Mr Adelson, IFT reported in a press release.
Sands China pays bonus to team members
On February 16, Sands China Ltd. will pay a bonus to eligible full-time team members, “rewarding their contributions toward the company’s ongoing success and achievements.” Over 27,000 employees, who have each completed at least one year of full service, will be granted a bonus worth at least one month’s salary, said the operator in a press release. “The company has earned nearly 100 awards and accolades in 2014 and the success is directly attributable to our dedicated staff, who are key in our Era of Excellence,” said Edward Tracy, president and CEO of Sands China Ltd.