Las Vegas Sands eyes Sheraton, Londoner refurbishment to beat Venetian revenues, traffic

Significant renovation projects are underway at Sheraton Grand Macao and The Londoner Macao, with Sands China announcing the second casino at The Londoner Macao will undergo refurbishment starting in May.

In an earnings call with analysts on the first quarter revenue, the company cautioned there will be considerable disruption to its services and products until 2024.

The completion of the USD1 billion Phase 2 renovation of The Londoner Macau, which is on top of the USD2 billion already spent under Phase 1, includes the Sheraton, with Sands confirming the hotel’s first tower will be complete by the end of this year and its second by May 2025.

Renovations of the second casino at The Londoner are also scheduled for completion by December.

“The fundamentals of the Sheraton Tower are quite good and both towers are quite good. They’re actually a little bit better than the existing Londoner side, believe it or not. The layout of the casino will be very good, [with] additional food and beverage amenities that we can add,” said Patrick Dumont, president and chief operating officer.

“And when we’re done, it’s going to be one of our best properties in Macau. The design will be high-level,” he added.

The top executive said connectivity will be a very good driver of future results for the property, noting that when completed, it will meet or exceed that of the Venetian.

In its revenues report, Londoner Macao saw net revenue fall from USD589 million to USD562 million due to fewer hotel rooms being available during renovation works.

“The worst is going to be across the summer when we have the lowest key count that we’ve had since we opened what was then in Sands Cotai Central because we’re taking out … the Sheraton. And so it’s going to be more of this disruption across the summer,” Dumont said.

“But then hopefully, as keys come back online across the [project] phasing, and as we get the arena back [in around] October-November, we’ll have a much more powerful set of assets to drive tourism and create cash flow. So there will be disruption,” he added.

Meanwhile, explaining the upgrade works at Venetian’s Cotai Arena, which has “always been a core part of our content programming,” Sands China CEO and president Grant Chum said the gaming operator was able to offer plenty of shows at the London Arena.

“If you just compare the sheer number of shows that we had in the first quarter, we had 12 shows compared with the fourth quarter last year, we had 31 shows. It’s a big difference. And obviously, in terms of capacity, there’s a big difference,” he said.

“So the attendance per show was much higher in the fourth quarter as well. That gives some color in terms of the disruption that had on our business with the arena being closed for renovation,” he added.

With hotel renovations ongoing, the group will see more keys out of inventory in the next couple of quarters.

Gaming Sands China reports strong Q1 results fueled by GGR growth

Macau gaming operator Sands China Ltd. (LVS) has reported robust financial and operating results for the first quarter of 2024, with significant growth in both Macau and Singapore.

The company’s total net revenue increased 42% year-over-year to USD1.8 billion for the quarter, while net income reached USD297 million, a turnaround from the USD10 million net loss recorded in the same period last year.

Sands China’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) reached USD610 million in the first quarter of 2023, an increase from the USD398 million recorded in the same period of the prior year.

However, the EBITDA figure would have been higher by USD31 million if the company had held as expected in its rolling program, according to Patrick Dumont, president and chief operating office of parent company Las Vegas Sands.

“When adjusted for lower-than-expected hold in the rolling segment, our EBITDA margin would have been 34.4%, up 380 basis points compared to the first quarter of 2023. This highlights our focus on cost discipline and profitability,” Dumont said.

The growth in Macau was driven by the continued recovery of the market, with the annual run rate reaching over USD28 billion in annualized gaming revenue, up from USD17 billion in the first quarter of 2023.

“The Macau market continues to grow as it has in each of the past five quarters. Since the reopening in early 2023, the annual run rate of the market has grown every quarter,” said Robert G. Goldstein, chairman and CEO of Las Vegas Sands.

Sands China’s capital expenditures during the first quarter totaled USD196 million, including construction, development, and maintenance activities of USD90 million in Macau.

“We remain deeply enthusiastic about our opportunities to deliver industry-leading growth in both Macau and Singapore in the years ahead, as we execute our substantial capital investment programs in both markets,” Goldstein added.

Staff Reporter