Welcome to the Las Vegas Sands Corp. fourth quarter 2013 earnings call. I will now turn the call over to Mr. Daniel Briggs, Vice President of Investor Relations.
Thank you, Rachel. Before I turn the call over to Mr. Adelson, please let me remind you that today's conference call will contain forward-looking statements that we are making under the safe harbor provisions of federal securities laws. The company's actual results could differ materially from the anticipated results in those forward-looking statements. Please see today's press release under the caption Forward-looking Statements for a discussion of risks that may affect our results. In addition, we may discuss adjusted net income and whole normalized adjusted net income, adjusted diluted earnings per share, and whole normalized adjusted diluted earnings per share, and adjusted property EBITDA, and whole normalized adjusted property EBITDA. All of which are non-GAAP measures. A definition and a reconciliation of each of these measures to the most comparable GAAP financial measures are included in the press release. Please note that this presentation is being recorded.
We also want to inform you that we have posted supplementary earning slides on our investor relations website for your use. We may refer to those slides during the Q&A portion of the call. Finally, for those who would like to participate in the question and answer session, we ask that you please limit yourself to one question and one follow-up, so we might allow everyone with interest to participate. With that, let me please introduce our Chairman, Sheldon Adelson.
Thank you, Dan. Good afternoon, everyone, and thank you for joining us today. We are extremely pleased with our strong financial results, which reflect continued execution of our strategic objectives. The highlights of the quarter from my perspective are as follows. We delivered outstanding growth in revenue, cash flow, net income, and earnings per share once again this quarter. With our whole normalized adjusted diluted earnings per share increasing 33.8% to reach $0.87 per share. We produced another record quarter in Macau, where we continue to grow faster than the Macau market in mass table games, the most important and profitable segment in that market. We also realized strong growth in the VIP segment. Importantly, growth was also on display in our non-gaming, hotel, retail, and entertainment offerings in Macau.
This enhances both the growth profile and profitability of our portfolio of properties on the Cotai Strip, while contributing to Macau's diversification and appeal as a leading business and leisure tourism destination. The confidence we have in the strength of our business and the reliability and predictability of our cash flows have allowed us to raise our recurring annual dividend for the 2014 calendar year to $2 per share. An increase of 42.9% compared to the $1.40 per share recurring dividend we paid in 2013. Our board of directors has announced that our first quarter 2014 dividend of $0.50 per share will be paid on March 31, 2014, to holders of record on March 21, 2014.
In addition to the dividends we paid in the fourth quarter of 2013, we returned nearly $225 million US dollars of capital to shareholders during the quarter through stock repurchases. Our financial results again reflect the strong performance of our principal strategic objectives that we have outlined in past earnings calls. Focusing on organic growth, normalized adjusted property EBITDA across our Macau property portfolio grew 55.8% to reach a record $887.6 million US dollars. Our mass table win in Macau for the quarter increased 58.3% to reach a record $1.22 billion US dollars in a market that grew approximately 40% in the quarter. Our growth rate was nearly 47% faster than the Macau market in the most important and most profitable segment in Macau.
We have grown faster than the Macau market in mass table games every quarter this year. One year ago, we generated approximately $770 million in mass table win, and we grew that in each successive quarter to $867 million, $929 million, $1.06 billion, and finally $1.22 billion in the fourth quarter of 2013. Our annualized departmental profit in this segment has increased to approximately $2.2 billion US dollars from approximately $1.4 billion US dollars over the last year. That growth has allowed us to bring an additional $800 million annually to our departmental profit and EBITDA. I guess there's no wonder that analysts and journalists are saying that we lead the market by far in mass market and in premium mass.
We see this trend continuing in the future for three reasons. First, more people are visiting both Macau and our property portfolio on the Cotai Strip. Visitation from China to Macau was up 10% in the year ended December 31, 2013. While mainland visitation to Macau from outside the neighboring Guangdong and Fujian provinces was up 15%. Growth from the more distant provinces is meaningfully exceeding the visitation growth from the neighboring Guangdong and Fujian provinces. We believe the growth trend will be enhanced by infrastructure investments, as tens of billions of dollars of investments in Macau, Guangdong Province, and Southern China enable more people to more easily reach Macau and accelerate Macau's evolution as the leading business and leisure destination in Asia.
The infrastructure investments include the world's most extensive high-speed rail network, a $10 billion bridge directly connecting Macau and Zhuhai with Hong Kong, and more than $20 billion of investment in the Special Economic Zone of Hengqin Island, which is adjacent to Macau and Guangdong Province. Second, as visitors come from further away, they stay longer, and they spend more money on dining, retail, and entertainment. Overnight visitors to Macau have the time to enjoy the full complement of entertainment amenities of the Cotai Strip and are spending 2.1 nights on average in Macau. While that 2.1 night length of stay for overnight visitors has increased, it's still far below Hong Kong's average of 3.7 nights. We believe there is room for expansion in Macau's average length of stay for overnight visitors, increasing length of stay will contribute to growth.
Third is our database of customers continues to expand. We have the ability to further optimize our mass table productivity across our property portfolio. In particular, we will continue to have the ability to increase the utilization of our market-leading 9,000-plus hotel room and suite inventory on the Cotai Strip for our most valuable mass gaming customers. We're pleased that we have expanded our mass table productivity to $12,143 of mass win per table per day across our Macau property portfolio from just $9,716 per day one year ago. We're confident that we have additional opportunities to optimize our table productivity across the portfolio in the quarters and years ahead. The VIP business is also exhibiting strong growth, with our rolling volume increasing 26% to reach a record $49.54 billion.
That represents rolling volume per table of approximately $1.23 million per day, which was a record for the company and was up 33.7% compared to the quarter one year ago. The Venetian Macao delivered another record quarter, due to our market-leading investments in non-gaming offerings, continues to lead the Macau market in visitation and business and leisure tourism appeal. A fundamental multi-tiered integrated resort development strategy, which features convention, exhibition, hotel, retail, and entertainment offerings, helped deliver 17.4 million visits in the quarter to our property portfolio, including over eight million visits to The Venetian Macao alone. EBITDA at The Venetian Macao increased to a market-leading $433 million for the quarter. When you take eight million visits per quarter and you multiply that by four, that's more than the number of individual unique visitors to Macau.
When you take 17.4 million, that's the equivalent of let's see, that's four, 40, 50. Over 60 million people, I think closer to 70 million people, for the year when only 30 million unique visitors arrive in Macau. The Venetian Macao is a must-see for everybody who comes in. Of course, one can conclude that we have one million people coming in 32 times, or we have 32 million people coming in once each. Likely it's something in between. When you think about it, that you capture everybody, every visitation for every unique visitor, it's an amazing statistic. Sands Cotai Central, our latest and largest property on the Cotai Strip, continues its steady ramp. It delivered $237 million in EBITDA this quarter.
On a whole normalized basis, Sands Cotai Central generated $273 million in EBITDA during the quarter and is approaching a $1.1 billion annualized EBITDA run rate. That's only for the first quarter this year. By the time we get to the fourth quarter, we'll be running at that point at a, hopefully, a significantly higher run rate. Perhaps the most important takeaway from the strong performance of both The Venetian and Sands Cotai Central is the clear positive impact that the increased critical mass of convention, exhibition, dining, retail, and entertainment offerings, including over 9,000 hotel rooms, brings to the overall tourism appeal of the Cotai Strip. Our property portfolio was attracting customers who were staying longer, which in turn is driving growth for both properties.
The Venetian and Sands Cotai Central work together to meaningfully enhance the overall appeal of the Cotai Strip, increasing both visitation and length of stay and attracting a more valuable set of customers to Macau and the Cotai Strip. This increases the returns across our entire property portfolio. We couldn't be more enthused about the future benefits to both The Venetian and Sands Cotai Central, that the additional dining, retail, and entertainment offerings of The Parisian, including 3,000 more hotel rooms and suites, will bring to the Cotai Strip. Now turning to Marina Bay Sands in Singapore. On a whole normalized basis, we generated $372 million EBITDA. Mass gaming win increased to $4.63 million per day, I believe for the first time. In addition, our hotel business reflected strong growth with ADR increasing to $425 and occupancy approaching 97%.
We expect to drive growth in the future as we focus our marketing efforts on high-value visitors from the surrounding Southeast Asian region. Turning to development growth in our current markets. Construction continues at The Parisian Macao, our fifth property on the Cotai Strip and our sixth in Macau overall. We remain on budget and on schedule. Subject, of course, to timely government approvals that may be required, we continue to target a late 2015 opening of our latest integrated resort. In addition, we have now started construction on The St. Regis Tower, the fourth and final tower of the Sands Cotai Central. We're targeting the fourth quarter of 2015 for the completion of that project, which will add over 700 additional hotel and apartment units to our portfolio on the Cotai Strip. Moving on to the pursuit of opportunities for integrated resort development in new markets and geographic areas.
In Asia, activity levels in Japan have increased, we are pursuing the potential for integrated resort development in this promising market with great enthusiasm and optimism. Korea has also shown increased activity, we're looking forward to the potential development opportunities there. We believe our Vision four and our creation of the convention-based integrated resort business model, together with our history of market-changing developments in Las Vegas, Singapore, and Macau that deliver meaningful and measurable economic benefits for our host markets, including increased employment, business and leisure tourism, and visitor spending, position us exceptionally well as we compete for these development opportunities. Finally, let's turn to one of our favorite subjects, the return of capital to shareholders.
Through December 31, 2013, we have returned more than $5.5 billion to our shareholders through dividends and stock repurchases over the last two years, including over $4.8 billion to Las Vegas Sands shareholders and over $700 million to the non-LVS shareholders of Sands China. As I mentioned before, we have raised our recurring annual dividend for Las Vegas Sands to $2 per share for the 2014 calendar year, an increase of 42.9%. For Sands China Limited, we increased the interim dividend for 2014 by 30% to HKD 0.87. Sands China Limited is also paying a special dividend of HKD 0.77 in February. We have every intention of increasing the dividends at Las Vegas Sands and Sands China in the years ahead as our business and cash flows continue to grow.
At December 31, we have over $1.4 billion remaining under our current stock repurchase authorization at Las Vegas Sands, and we expect to purchase at least $75 million of stock per month. We look forward to continuing to utilize the program to return capital to shareholders and to enhance long-term shareholder returns. Two, we are pleased to have completed the refinancing of our U.S. restricted group credit facility and to have extended the tenure of that debt on very favorable terms through the end of the decade. Looking ahead, we expect to maintain the strongest balance sheet in the industry, which provides another meaningful competitive advantage as we pursue global growth opportunities. It's a tongue twister. People have asked what leverage level we would be comfortable with in the future as our cash flows grow.
We would be comfortable with a gross leverage debt to EBITDA ratio of between 2.0 times and 3.5 times before additional debt related to the future development of integrated resorts in new markets. Note that our leverage ratio is 2 times today. We have the capacity to increase our leverage levels as we see fit and still stay within the range. In summary, we are successfully executing our business model, and we have outstanding operating momentum as we look to extend our leadership position in convention-based integrated resort development and operation. We are the visionaries of the convention-based integrated resort business model and the leaders in the industry. Couple that with our financial strength and our disciplined focus on operational excellence, not to mention our good looks and charm, and I couldn't be more confident about our future success.
It's my job, together with our outstanding management team, to make sure we stay disciplined and continue to execute our strategies that will both extend our industry leadership, encounter the new markets, and generate strong growth and outstanding returns for our shareholders in the years ahead. Yay, dividends. With that, let me turn the call over to the operator to begin the Q&A session.
At this time, if you'd like to ask a question, please press star one on your telephone keypad. Your first question is from Joe Greff from J.P. Morgan. Your line is open.
Good afternoon, everybody. Most of the questions we're getting from investors this evening relates to Singapore, I'll save a follow-up for something else. I know you kind of gave us the normalized EBITDA performance in the quarter. What was the normalized for hold EBITDA margin in the four Q at MBS?
About 47%.
Okay.
A little north of 47%.
Okay. Are we thinking with we're seeing progress, obviously, in the non-rolling chip and the slot handle, that the segment margins in that are probably going to be lower than where we have historically, just because the cost of acquisition and promos and comps related to hotel rooms are impacting that?
Joe, it's Rob. I think first of all, we're seeing increased volumes in all our businesses there except for the rolling chip piece. Very pleased with the growth in the foreign visitation, very pleased with the growth in the non-rolling slot ETG segments, especially the premium portions. I think our margins remain low sixties in that most important segment. Feel pretty good about it. Obviously, we're paying more for our hotel rooms because we are getting very high CAP rates, the highest in the Singapore market. Our ADRs keep getting higher and higher, we're paying more for those rooms. Nevertheless, I'm really pleased with our team as far as the non-rolling chip play, slot end table. The issue there, obviously, this quarter is all about the hold percentage on the rolling chip piece, and that's continued to be a disappointment. Hopefully, that'll level out.
We're confident that our range 2.7%-3% is reasonable and achievable. Clearly, this quarter, we missed by quite a bit.
My follow-up relates to capital allocation broadly. Sheldon, do you think your being at 3.5x gross leverage impedes your viability for new integrated resorts?
Impedes the what?
Does that change your ability, in your view, to compete, i.e., having a phenomenal balance sheet when it comes to the competitive level for new IRs in Japan or South Korea?
Joe, I'm glad you brought that up because I forgot to add an addendum to my prepared remarks. We probably have somewhere between $12 billion-$14 billion US dollars worth of monetizable retail mall sales potential. We could wipe out every dollar that we owe and more if we just monetize our increasingly valuable real estate. We were just talking this morning about the average sales per square foot on the very hot, through-the-roof square foot sales in US dollars on the first level of the Shoppes at Four Seasons, and the lower amount on the second level, which is increasing now with close to an average of 10,000 visitors going across our pedestrian, air-conditioned, moving sidewalk, pedestrian bridge between Sands Cotai Central and The Venetian. The average for the two levels, I think, is $4,600 a sq ft.
The highest mall in the U.S. is The Forum Shops across the street, followed in second place by the Grand Canal Shoppes here at The Venetian. The Forum Shops is only about $1,200, $1,300 or $1,400 a sq ft. Our worst mall is doing better than that. We've got plenty of cash. We could be highly competitive to doing two, three, or maybe even four properties in emerging markets. I pray that we will have two, three, or four emerging market possibilities. I have to tell you, we are pumping money out of here. Yesterday, we were talking about our balance sheet, and the financial department said how much cash we had on hand.
Mike Leven and I looked at each other and say, "Do you realize," these are unspoken words, "that we come from the slums in Boston, both of us?" The best you can say about them were they, tenements. That's the best you could say about where we came from. We looked at each other and we said, "Look at the $ billions we got sitting there. Could you ever imagine?" It was unspoken. We looked at each other, and our look said all the words. Can you imagine when we grew up in Dorchester area, Dorchester, Roxbury, Mattapan section of Boston, that we'd have $ billions sitting in the bank, wondering what we're going to do with it?
Just a follow-up to the comment about monetizing the retail real estate assets. Are you commencing a process now, or is it more of a theoretical at this point?
No, we are commencing the process for approaching final approval from the city from Macau SAR. If and when we decided that it was time to monetize them, all we'd have to do is pull the trigger.
Got it. Thank you very much.
You're welcome.
The next question is from Jon Oh with CLSA. Your line is open.
Hello, Jon.
Jon, if I could start with maybe looking out in Cotai. We expect several new properties opening in 2015 and in 2016, including The Parisian. What do you think will happen to your existing Cotai properties over this period? I guess, I'm trying to see, how do you plan to stay competitive, or do you think that the additional supply can be easily absorbed by the market?
Your last statement is right on the mark. You hit the nail right on the head. The market is growing. As we talked about earlier, the infrastructure improvements in Southern China are so overwhelming. In 2016, there's going to be a second airport in Macau. It actually won't be a second airport in Macau, but it'll be shorter to get to Macau from the Hong Kong International Airport, servicing 180 cities with 100 scheduled carriers. It'll be shorter to get to Macau in 20 minutes from there than it will be to drive to Hong Kong Island for 45 minutes. The infrastructure and the demand, Jon, you know as well as anybody, and you're probably one of the most, with all the other analysts on the phone, the foremost analyst and knowledgeable in this field. You know that this is a supply-driven industry. Let's not forget that.
The more properties go up, the faster we grow. My vision, when I looked at the bay and the swamp that is today Cotai, I said that what will work here is critical mass. I don't care, I said at the time, whether the critical mass is ours, which I'd much prefer, but the critical mass comes from ours and others. That critical mass is going to make the Cotai Strip Asia's Las Vegas. A rising tide carries all boats. When The Venetian alone is getting almost 10% more visitation than the number of unique visitors that arrive in Macau, I don't understand how other people can compete with us. When we get 2.5 visits, visitations, from each individual unique visitor to Macau, I don't see how anybody can compete with us.
Between now and the time it is open, there'll be three properties open in 2015. Galaxy, Studio City Macau, and The Parisian Macao. We may open before at least one of them. I'm happy to say that we are very pleased with our budget and our schedule I can't give you the details because things can change. Right now, I'm quite happy with the progress. We have the largest footprint, meaning we have more square footage of casino space than any of the other competitors, maybe more than one or two or three have. Secondly, we have more gaming tables than everybody else because we ended up building more non-gaming, and therefore, the attraction to bring in more people. We ended up more tables. When they put the cap on, we were leading the table count.
Number 3, as I repeated in my prepared remarks, we are the leader in the mass market, and we are growing. You see the growth from 9,000 to 12,000 in just 12 months. We're the leader in the mass market, although MPEL is doing quite well in the premium mass, we're rapidly catching up, and we hope to and expect to suppress them. We have 9,000 rooms. We're building about 700 more, plus 3,000 at The St. Regis, and we're in the process of putting through the implementation of the permission that we have to sell the Four Seasons apartments on a co-op basis. That'll put another 300 units. We had the foresight and the Vision to build because the whole Vision for Cotai was ours, mine.
We had the foresight and the courage to build the number of rooms and the amenities that we did without getting paid for that.
Okay. If I could follow up with just another question. On your prepared remarks, you said that you're expecting substantially higher EBITDA for Sands Cotai Central this year. You guys have done a good job ramping up Sands Cotai Central to over $1 billion in EBITDA in a very short period of time. Could you give us a sense of how much more headroom do you think we can expect, and is the improvement largely going to come from mass, or is it going to come from VIP? Thank you.
I'll give that to Rob. He hasn't spoken so much today. Clear your throat, Rob.
Hey, Jon. How you doing? The answer is, SCC, you're right, it's ramped to $1 billion, we think there's a lot more running room for a lot of reasons. The best two would be, room is the biggest driver of mass gaming, as well as VIP gaming in Macau. 5,700 keys at Sands Cotai Central. We also open our Dragon Master room later this year, probably in the spring. I think we're just starting. We're in the infancy of Sands Cotai Central. A lot of people were questioning its viability. Now it's running $1 billion plus. Our next goal is $1.2 billion, $1.3 billion. We think there's a lot of room to grow there. The only thing inhibiting that property is that it's our biggest win per unit per day in the mass side. It's doubled from $6,600 per table to $13,900, Q4 2013.
That's a wonderful ramp. Can it get to $15,000, $16,000 a table? We believe it can. We believe Dragon Master can drive the premium mass, and honestly, it also competes with the junket segment. I walked through the new retail space on the third floor last week, and I think that property just has a lot more room to grow. Everyone was excited about a billion-dollar threshold, but that's just the beginning. We are very excited about all the segmentation. Just like The Venetian, it's got rooms, Dragon Master, premium mass, pure mass, junket play. SCC has a wonderfully bright future with lots of growth there.
Okay. Thank you.
The next question is from Shaun Kelley with Bank of America. Your line is open.
Good afternoon, guys. I wanted to start by going back to your comment in the prepared remarks about going up to 3.5 times gross leverage. That number was a little higher than actually we were expecting, and I was just wondering, do you guys think there's an optimal time to begin thinking about this, given where we stand with record low interest rates, and possibly forecast for those rates to start to move higher? Just any thoughts on that would be helpful.
Well, that outside number is thinking about the possibility of getting some money and doing something with it. Right now, we don't have any demand for large amounts of money. The billions of dollars of EBITDA are throwing off billions of dollars of free cash flow with nothing to do with it. When I joke around and say, "Yay, dividends," I think that's what I and every other shareholder wants to hear. Yay, dividends. Yay, stock buyback. What are we doing with the money? We're in a position that I'm basically a debt-averse person, and I never want that I had bad experiences when I was a kid. I'm still a kid, but I'm a little older on the calendar. I don't want to be in a position where I owe money.
I had to take $1 billion out of my pocket in 2008 and 2009 because we owed money. I don't want to be put in a position that I'm just going to speculate and owe money with no immediate liquidatable obligations. If we have money to borrow to do something with, if we can't do it with development, if we got an okay to go into Japan, for instance, tomorrow morning, we're not going to need the billions of dollars until 2 or 3 years from now. We got plenty of time to build up the money, and I've concluded that each and every integrated resort will have its own standalone financing, and it's not going to be financed with equity from our other income-producing properties. We went through that with our previous management. We're not going to go through that again. We're not at 3.5.
We're far from it, and I'm not even sure we want to get up to 3.5, but we want to be honest and fair with you and tell you there's a possibility we could go there. For those of you who know me personally, you know I'm debt-averse and that I'm not going to take any money that I can't quickly repay to. I've had enough lessons in my life about making sure that I have enough cash flow to take care of my obligations.
That's really helpful, Sheldon, and really appreciate the candor. You brought up Japan in that discussion as well, so maybe switching to that topic, if you could just give us a little bit of an update about where you see Japan in the timeline, in the phase right now, and very specifically, is it your thought right now that partnerships are going to be required to enter into Japan? Just how do you think about partnering with someone else for that project?
I just came back a few days ago from Japan, seeing people there, so I'll let him answer that question.
Thanks, Sheldon. Shaun, it's Mike. I just came back from Japan. I was there a week or so ago. The process in Japan, which has been made public, is that, of course, the first legislation passed. The second legislation should be passed in June, which forms the committee to set up the regulations and the locations as well as the information for bidding for whatever sites are selected. Today in Japan, everybody that we've spoken to believes that that second piece of legislation is going to pass, and we are preparing. We're ramping up our people there. We're opening an office there. We're doing all the work in order to do that. The talk about partnerships was in most of the conversations in Japan. The level of partnerships was not. There's interest from some major Japanese conglomerates, some major Japanese companies to participate.
Until they really know the licensing situations and the investment realities, we don't know for sure whether that will take place. We have made comments to much of the people that we've been talking to that we are not a closed door on some of those partnerships, and we've been advised by certain members of the Japanese community to keep the door open and keep the mind open in that situation. We don't know exactly what's going to happen, but it's likely that there could be partnerships involved.
Great.
I'd like to add something onto that. Not one of the companies in Asia, in Japan, have had operating experience. I think Universal, former Aruze, had a position on the Wynn board. None of these guys have an infrastructure to operate integrated resorts/casinos. We went through this fervor for partners during the Macau, the Singapore tendering period, and everybody fought and did everything they can to line up the best of partners they thought could be made available. The partners will say they'd like to be partners. They think all they have to do is put up some money with you and their partner. They don't understand how this industry is regulated.
When they have to put up a stack of application papers with personal histories of every member of their board of directors, of every one of their subsidiaries, I think their appetite to be partners. That is to satisfy the other jurisdictions in which companies like ours are licensed. They may have to prove that they're worthy in Singapore and in Nevada. When they look at the papers they're going to have to file, I think they're going to do an about-face and march in the other direction.
Great. Thank you, everyone.
One other thing I want to add, Shaun, in that situation, in the meetings in Japan, we are in a very favored position. Essentially about 22% of our non-gaming business in Singapore at Marina Bay Sands has Japanese components to it, either visitors or meetings or conventions.
We're very well known there, and Marina Bay Sands is often talked as the model for what the integrated resort facility in Tokyo or Osaka would be like. We are in a very leadership position as far as having that opportunity.
Thank you, Mike. That's actually really helpful.
Your next question is from Felicia Hendrix with Barclays. Your line is open.
Hi, good afternoon. Rob, you touched on this a bit before, I wanted to get more granular. The mass win per table per day obviously continues to impress, and you've surpassed the prior goal that you set, the 12,000 win per table per day goal. I see you shifted the chart a little bit in the presentation. Just wondering what's the next benchmark there, what's your timing to get there, and if you could just walk us through some efforts you're making at the properties other than Sands Cotai Central to get to your next benchmark.
On the whole portfolio, Felicia, you're talking about cost?
Yes.
Obviously, the results have been excellent. Our table game optimization, the count, we're really pleased with that. We dropped our rolling tables from what was 525 in Q2 of 2013 to about 402 currently. Yet we've increased our roll. We're maximizing the roll on the VIP side, and we're very pleased about that. We're getting more utilization of the game, obviously great. The real story, as you know, resides in the mass side. I think the real story there is we've got about 1,100 tables. As you noted, we've exceeded our stated goal of 12,000 per table per day. The question now is how much higher can we get?
I think the real answer resides in the thought that we have all these about 9,000 keys on Cotai, in addition to the infrastructural improvements, in addition to the fact that our focus in that business is both and all throughout the mass portfolio, not just the premium mass, the super premium, but on the pure mass. I think there's where our advantage is well-placed. No one else can compete on the pure mass side. About 800 games right now are doing about 8,000-9,000 a day. As we grow that segment, although our premium mass and Dragon Master from 5 and 6, I don't know, can we get to 13,000, 14,000, 15,000, 16,000? I believe we can. People were skeptical when we said we can go from-- We doubled Sands Cotai from 6 to 13.
Venetian is a juggernaut, probably the most successful casino in the world today, 500-plus mass table games in excess of 12,000. Can we ramp the entire portfolio to 14,000, 15,000? I believe we will. I can't tell you the timeframe. I can't tell you if it's the next two quarters. I can't tell you if it's 13, I mean, 14 or 15, but there's no reason to believe as we penetrate beyond Guangdong, as sleeping rooms become the biggest driver of gaming, we have that unique advantage of all those sleeping rooms. As the infrastructural improvements, the cultural propensity to gamble, it all works in our favor. Our team there, we know Chris and I were there last week, their focus is completely on this segment and all 3 tiers of segment. We're very favored in the belief we can grow it.
I don't want to put a timetable in mind. We thought 12,000 was a pretty aggressive goal. It turns out we passed that. Next stop, 13,000, 14,000, 15,000 a table. Couldn't be more pleased with our progress. Couldn't be more pleased with our ability to grow our rolling win as well as our mass. We also believe there's one more hidden advantage, that is our real estate in both SCC and Venetian enables us to put more ETGs on the floor to talk to that table customer who can't play the limits we're posting now. We're in a very, very preferred position, and we feel very confident there's big growth ahead for us.
Thanks, Rob. That's really helpful. Just as a follow-on, Rob, maybe do you foresee the opening of the new resort on Hengqin having any kind of benefit in Macao this year?
I do. I believe Hengqin is extraordinary positive for us in Cotai. It affords more sleeping opportunities, more visitations. It's a wonderful development for all of Cotai. Again, with our 1,500 gaming tables, we're more advantaged. All casinos are not equal. Those who have more retail, more sleeping rooms, more gaming positions are more equal, and we are more equal at Venetian and SCC. As the market brings more customers, and that's Hengqin, that benefits us dramatically. I think it's wildly positive for us. Yes.
Great. Thank you for the color.
Sure.
Next question is from Steven Wieczynski with Stifel. Your line is open.
Good afternoon, guys. Rob, you talked about with Singapore, with that VIP market being pretty tough at this point, trying to go out and identify more of those customers inside that region. Can you dive into that a little bit more? Maybe what kind of conversations have you had with the government in terms of eventually allowing that junket structure to come into play there?
The junket structure, Steve, is not on the table. Let's be clear about that. We've not had conversations. We wait and listen to the government's advices, frankly, that's not in discussion at all. If you break out the rolling versus non-rolling, let's be real clear, we are very pleased where our non-rolling business is going. We ramped to 4.6 again, came back from that dramatic lull couple about six quarters ago. Couldn't be more pleased with what our team has done over there in terms of developing the Jakarta-based, Malaysian-based, Japan-based customer. We're seeing a real growth there on the premium side, both slot and table. We're not seeing as much pure mass play. That play is disappearing, frankly, both Singaporean. Both us and RWS saw that lull as a result of the government's approach.
Going back to the premium side, we're very disappointed we can't seem to play lucky, quote unquote, the last year and a half or so. We have total confidence with the best people on the ground looking at it, that we will return to a 2730 range. I must caution you, I don't believe there's going to be significant rolling growth in Singapore in the foreseeable future. It's going to remain a pretty much flat market, in my opinion. It's Mainland Chinese driven. We want to maintain our $60 billion or so a year roll. We want to hopefully get our whole % back to a good place. We want to focus on margin to grow a better yield. We believe the growth is going to be in the non-rolling segments for us.
The real opportunity to make money in Singapore resides in the non-Singaporean based premium customers in both slot and table.
Okay, thanks. Second question, I know it's not an overly important market for you guys, but with Vegas, your numbers there were pretty strong. What's your outlook into 2014, just in terms of that group and convention business?
Michael, business?
2014 convention business is in very good shape, actually, for Vegas. The convention business is really the best market we have at the moment. Rates are moving up a little bit in the convention area, which is good. I think you can expect a good convention year, probably one of the best here in Vegas.
Okay, thanks.
Your next question is from Carlo Santarelli with Deutsche Bank. Your line is open.
Hey, guys. Good afternoon. Just really quickly on The Venetian and on margins there. It seems like this is the second quarter where commissions were a little bit higher on the VIP side than I would've anticipated, and that obviously weighed on the margin a little bit, despite clearly the higher margin mass ramping nicely at that property and across the portfolio. Could you guys shed a little bit of light on maybe what's going on the VIP side and the commission numbers specifically?
Yeah. I must say, Carlo, to be honest with you, any time you can start to run towards a $2 billion run rate, I'll take a lesser margin. We're now ramping that place. It's heading for $500 million a quarter, so we can live with it. We're very pleased with the numbers. I think to your point, the mass tables are the driver there. Having said that, the mix of business at The Venetian, both premium, we're mixing premium direct as well as the VIP piece. The mix sometimes ends up affecting margin in terms of commissions paid. As you know, we have a structure there that's both win based and volume based, it's purely in the mix. There's nothing out of sync with it. We made a lot of money in both the junket side this quarter as well as VIP premium direct.
Feel very comfortable we're heading there. Again, at The Venetian, you can't argue those results. It might be the first property in history to push $2 billion of EBITDA. The mix may, from quarter to quarter, vastly, may affect our margin vis-à-vis the rolling segment. I think in the aggregate, the margin at The Venetian was about 37%-38%. Feel pretty good about that.
Great, Rob. That's helpful. If you wouldn't mind just following up on that, you mentioned a little bit of the premium mass. If we were to think about that and the old adage that you guys have talked about, obviously, the power of that mass revenue dollar relative to VIP. As we layer in more of that premium mass business, should we be thinking about that relationship of mass revenue relative to VIP, to EBITDA dollars any differently?
You're talking Venetian now, right?
Across the Macau portfolio, more so.
Got you. No, not really. I think we believe we're going to trade in the 45%, 46% margin across the portfolio on the non-rolling segment. Clearly, we have this ridiculous advantage of having lots of pure mass games that run as much as 50 point margins on them. The blend will be in the mid-40s, probably higher than most. To your point, we'll trade lower in the premium mass, but still we're seeing that reside in the 41%, 42%, 43%. The beauty of our portfolio is we're not super premium mass or premium mass dependent. We have lots of pure mass, and that's where the margin will keep kicking up. I believe we can grow our yield to hopefully, as I referenced earlier to Felicia, $14,000, $15,000, $16,000 a day blended and maintain a 44%, 45%, 46%.
The Venetian story, I think, what's happened there, what has happened so favorably is we've always had the mass business there. We started to develop as our premium mass. That's where I think the growth story is in The Venetian specifically. As we drive home that premium mass customer, use our theming, our room product. Again, I believe The Venetian is going to hit a $500 million quarter one of these days because the blend of that business, that's the only property in Macau that hits on all cylinders, all three portions of the mass segment, the junkets, the retail. It's a traffic machine, as Sheldon referenced. It's got all the cylinders working. That is a juggernaut. There's no reason in my mind that can't be a $2 billion store on a run rate sometime this year or next.
I'm very confident we maintain margin and keep growing our yield per table.
Great, thank you. Just one quick follow-up on Marina Bay Sands. I know that Sheldon commented earlier on it, but when you look at the life to date at this property, I think there's something like $185 billion of total VIP roll that's come through. I want to say life to date hold at the property is about 8% below that theoretical level. Is there anything structural about your customers there? Maybe it's betting patterns, maybe it's tie bets, things like that maybe should influence a lower hold? I remember being told one time, players from certain jurisdictions play ties more and that drives hold up. In this instance, do you guys think there's anything structural there that we should think about, or is it just a string of kind of less than fortunate luck?
I spent hours last week in Singapore. We hired a number of experts to look at our mix of business. We pay people a lot of money to tell us what we already believe, and that is structurally sound, and it should be in the range of 2.7%-3%. I'm as frustrated as anybody. As a manager who's paid to create EBITDA, I found it very frustrating. I sat through a four-hour lecture from three very smart people. What they told me is, "You're going to hold 2.7%-3%." The only thing I can tell you, Carlo, and I will tell you this. One, highly concentrated. The one mistake we made in Singapore is we should have built it inside mainland China with the border, like Macau. You don't have as much pure volume as you have in Macau.
2, we let people bet $1 million USD a hand. That creates volatility that is frustrating but valid. 3, pairs and tie betting, which you know drives the margin of our baccarat business. Some of our better customers don't bet pairs and ties. We wish they would, but they're betting it less, and that's a wise gambling choice. That's impacted somewhat. Having said that, in the aggregate, 3 very smart experts, along with Andrew MacDonald, sat there and lectured me, and I listened very carefully, and I walked away saying, "Shucks, we should be holding 2.7-3. Be patient and keep taking all the action." That's all I can tell you. There's nothing structurally wrong. We have to keep our head down, keep bringing the business, be margin-focused, and watch it return to a better day. We saw this years ago.
When I was young, we used to watch Caesars Palace go through this. It is a very, very volatile, highly concentrated, very high bet. We've got over 100 guys that bet huge amounts of money each quarter. One of these days, we'll give you guys a 4% quarter, and all this will go away. Unfortunately, this is not that quarter. Bear with us and watch Singapore perform.
Yeah, for sure, Rob. Thank you very much. That was really helpful.
The next question is from Cameron McKnight with Wells Fargo. Your line is open.
Good afternoon. Thanks. Question perhaps for Rob, just to follow on from Carlo's first question. On the premium mass side of the market in Macau, premium mass is a term that we're hearing a lot of operators use and talk about now. Are you seeing any signs that that segment is becoming any more competitive on the fringes?
Yeah, surprisingly, I'm not. It's a great question. It's a very valid one. I ask that of Ed and the team all the time. Frankly, we're not seeing it. The market is so fluffy and so rich that everyone's participating. I am fearful that margin erosion, but thus far, we haven't seen that. The customer still seems more focused on the environment. We've created some wonderful environments to gamble in. Obviously, service, obviously, room product. I was at the Four Seasons last week watching rooms full of these guys betting huge amounts of money. I was mesmerized by the amount of people there in the middle of the week, betting huge amounts of money, having fun. I don't see it. Fortunately, the market's remaining rational. There is so much good business in Macau. It's such a staggering market that very appealing to any operator.
Far, I've seen none of the silliness I've seen in other markets in the last 35 years. The answer, respectfully, is no. We're seeing lots more business and maintaining margin.
That's a very interesting question. There are two indicators that provide a predictable prognostication. It's tough to prognosticate, particularly about the future. The first one is we went from 1.3 nights average stay to 2.1 in less than a year. What does that mean? What it means is the second item, which is that people are traveling from further away. We have an upside potential of that when the Hong Kong-Macau-Zhuhai bridge opens in 2016. That we see now more and more people that are coming from further away. When they do, they bring more money and a higher gaming budget. It's evidenced by the 2.1 nights average stay. The infrastructure is bearing fruit, that people are coming for a longer stay. When they do that, they bring more money. When they do that, you increase the premium mass on a predictable basis.
You've heard Rob mention the word Dragon Master. The Dragon Master is what somebody had a nightmare and called the space that we're building in Lot Five, the premium mass space. I suppose it's a good name, Dragon Master.
Call it a Stommy Master.
Huh?
Call it the Stommy Master.
Would you go for a combi master? Anyway, those are the indications, the expansion of the infrastructure to bring people from further away and the promise of more of that. When you open that bridge, 180 cities will be serviced by the airport that's only 20 minutes from you, serviced by over 100 airlines. Somebody before asked a question about, are you going to be too crowded when everybody opens up? As I said, I think it was Jon Oh., we're in a supply-driven industry. We could see by the indications that the future looks much brighter, and it's predictable and reliable than it is today.
That's great. Thanks. Sheldon, as a follow-on with the bridge opening in 2016 and linking Macau to Hong Kong International Airport, do you think that will really, and perhaps finally, give Macau a leg up in the convention and exhibition business versus, say, for example, Hong Kong, which is far more accessible for international travelers?
Yes. It's accessible only because of the airport.
Yep.
If that airport essentially is right in the middle between Hong Kong and Macau, then it'll substantially increase the viability of the convention and exhibition market.
That, Cameron, that's the biggest objection now from big groups and big conventions in terms of having to fly into Hong Kong and take a boat. When that objection gets removed with our MICE capability in the Cotai Central as well as at The Venetian, we stand in a major position to benefit from that MICE activity, which is midweek business, which is the opportunity area for significant improvement continually.
Great. Thanks very much.
You're welcome.
Your next question is from Robin Farley with UBS. Your line is open.
Great. Thanks. I wonder if you could comment a little bit more on Singapore. I know you mentioned that you expect it to stay at that $60 billion level, but just looking at Q4, and I guess it's the lowest volume in the last two years, and how you get comfortable that that's in the range of normal and that there are still $20 billion quarters coming. Is it related to the number of events held that makes you comfortable that 13 is not where it's moving towards, rather that it's going to stay at that $60 billion a year?
Closer to convertibility on the yuan and inflation. They're both going to contribute to an increase in gross room.
I think that was coupled with the fact that. You're right, it's a light quarter compared to the $18.2 million we did first quarter last year or even the $14.4 million we did Q2 of this year. I guess my answer, Robin, it's super concentrated, and two more guys, three more guys, four more guys show up, it's a $1 billion a roll. I wouldn't take too much stock in the fact. It's a light quarter, you're absolutely right. We could easily do $17 million-$18 million, which puts right back a normalized run rate of $60 million. I think $15 million a quarter blended for the year is a realistic estimate. Could I be off by here and there a quarter that's up to $18 million and down to $12 million? Yeah, I could.
I think in the end of the day, if you want to be super conservative, drop it to [$55 billion-$60 billion] blended for the year, and I think you're very safe. I'm more focused on the margins and the whole percentage right now because I don't think there's significant growth beyond that right now. To your point, it was a weak quarter, and there's no denying that. We had an [$18.2 billion] quarter a year ago, and I wouldn't be surprised to see the first quarter pop that number again. It doesn't take a lot. We've got some special events coming on the horizon. David Beckham shows up, it makes a difference. I'm not that concerned that we can pop the numbers in Singapore.
I'm more concerned we can hang on to the money, and we can maintain a margin to drive our EBITDA back to a $1.6 billion-$1.7 billion run rate.
Okay, great. Thanks. Then lastly, can you give a little more color on the approval process for the apartments in Cotai? It sounds like you're going to be actively under construction there and just if there's any approval needed for those sales.
Were you going to say something?
No, go ahead.
No. We've gotten the okay from the Government of Macau to proceed with the St. Regis tower. We've gotten the okay to monetize through the co-op basis for the Four Seasons. However, they have not had any experience with the legal infrastructure, and we are sending in to the council of the community, the General Council of Macau, we're sending in knowledge and experience from the major co-op market in the world. That's New York City. We're having the law firms acquaint them with the structure. Their lack of familiarity with the structure is holding back their okays for little things. We expect in the near future that that should resolve itself.
They knew that I wasn't going to build the St. Regis until I got the okay for the Four Seasons, and now we're building the St. Regis, and we'll have it ready before the end of 2015, at or about the time we're going to have the Parisian opened. Again, we're just adding to the most precious commodity there, and that is the room supply.
Okay, great. Thank you.
Your next question is from Harry Curtis with Nomura. Your line is open.
Hi. Just a quick question for either Sheldon or Rob. Can you talk a bit about the license renewal or the concession renewal process, that initial discussions in Macau could begin in 2015. How do you expect that to go?
Harry, that's Mike. I'll answer for the-- since you didn't ask me. The answer is simply, Secretary Tam made that statement about six or seven months ago about 2015. We've had no further information whatsoever as to whether it will start, where it will go, or what have you. You hear rumors all the time, but basically, there is absolutely no factual information coming out of the secretary or anybody else at this point.
There are some thoughts that-
Sorry.
That's okay. There are some thoughts that an additional license could be issued or two. Do you buy that?
No. There's no reason to buy or not buy, actually. At this point-
I don't buy
It doesn't look to us that there'd be anything. You really don't know, for anybody in your end or ours to make a speculation, the only thing we know is that more emphasis is going to be put on integrated resort-type facilities with more non-gaming facilities for operators. You're seeing some of the guys talk about that in the new buildings as we do, that's the one that the government continues to talk about putting more emphasis on Macau for that kind of situation. That's the only really factual situation we know.
Okay. Just my last question is, are there any direct investment opportunities for your company on Hengqin?
There's been conversations about direct investment. You see that with Pansy Ho and some of Galaxy working in that area. We have had some conversations about leasing some space for office space, things of that kind, no direct conversation about anything where there was actually a financial investment other than that.
Okay, that's it for me. Thank you.
Thanks, Harry.
There are no further questions. Ladies and gentlemen, thank you for your participation on today's call. This concludes today's conference. You may now disconnect.
Thank you, everybody.