Afternoon, and welcome to the Las Vegas Sands Corp. 2nd Quarter 2013 Conference Call. I will now turn the conference over to Daniel Briggs.
Thank you. Before I turn the call over to Mr. Adelson, 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 hold adjusted adjusted net income, adjusted diluted EPS and hold adjusted adjusted diluted EPS, and adjusted property EBITDA and hold adjusted adjusted property EBITDA, all of which are non GAAP measures. A definition and a reconciliation of each 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 earnings slides in our Investor Relations website for your use. Finally, for those who would like to participate in the Q and A session, we would ask that you keep one question and then one follow-up question.
With that, I will please introduce our Chairman, Sheldon Adelson.
Thank you, Dan. Good afternoon, everyone, and thank you for joining us today. We're extremely pleased with our financial results, which continue to reflect our outstanding strategic positioning, strong execution and position of leadership in integrated resource development and operations. We delivered strong growth in revenue, cash flow and earnings per share, with hold adjusted diluted earnings per share increasing 41.2% to reach $0.72 per share. Our results continue to reflect strong execution against our 4 principal strategic objectives.
We're both confident in every of our successful execution against these strategic objectives will both extend our industry leadership and maximize shareholder value. I will provide a brief progress report on those four objectives before we move to your questions. Our strategic objectives are: 1st, maximizing organic growth from our property portfolio 2nd, deliver additional growth by making new investments in our current market. 3rd, identify and nurture new innovative result development opportunities in geographic areas outside our current markets. And 4th, continue to increase the return of capital to shareholders.
I like that last one It's a personal payment plan. Focusing on organic growth. We again delivered an all time record performance in Macao where our industry leading investments and the unrivaled scale of our revenues have again enabled us to deliver robust market leading growth in the world's largest and most profitable gaming. We welcomed a record 14 point 6,000,000 visits to our Macau properties in the quarter, an increase of 40% compared to the 2nd quarter of 2012. Adjusted EBITDA across our capital property portfolio expanded 53.2 percent to reach a record US657.2 million dollars percent to reach a record $657,200,000 Our non stable income account for the quarter was up a whopping 61.1 percent to a record US930 $1,000,000 Our growth for the quarter was twice as fast as the Macao market in the most important and most profitable segment in Macao.
Also impressive is our rolling volume growth in Macao, which was up 25.7 percent this quarter to a record US42 $1,000,000,000 That represents VIP market share of approximately 17.4% of Macao market rolling volume compared to just 14.8 percent 1 year ago. Our growth for the quarter was nearly 2.5 times faster than the Macau market in the VIP segment. The Venetian Macau delivered the strongest quarter in the property's history. The Munition Macau leads the Macau market in visitation, business and leisure tourism field. And last but not least, the generation of EBITDA, which reached a property record US361 million dollars in the quarter.
The Venetian's non rolling chip drop increased 56.1% to reach a market leading property record of US1.59 billion dollars for the quarter. Quarter. Today's Cotai Central continues at steady rates with strong growth on display across the board. Our mass table, slot and ETG win per day increased over 158% this quarter compared to the period last year, reaching over $3,510,000 per day. Visitation at Sands Cove Dodge Central exceeded 40,000 visits per day during the quarter, an increase of over 142% compared to the year ago period.
EBITDA generation is also improving meaningfully and despite low hold reached $146,000,000 for the quarter. And we held normally at Same Hotel Dental. The property would have generated approximately $170,000,000 in adjusted property EBITDA during the quarter. Now turning to Marina Bay Sands and Singapore. Rolling volume was up over 24% compared to last year's Q2, reaching US14.4 billion dollars On a hold adjusted basis, we produced EBITDA of $396,000,000 this quarter and Marina Bay Sands, which was up about 6% compared to the same quarter last year.
Turning to our U. S. Operations. Over adjusted adjusted property EBITDA was up nearly 8% in Las Vegas and grew nearly 10% in sales by volume. We are pleased to be generating growth in both the largest gaming market in the U.
S, Las Vegas, and the fastest growing gaming market in the U. S, Pennsylvania. Now let's turn to strategic objective number 2, development growth in our current markets. The Parisian Macau, our 5th integrated resort property on the Cotai Strip and our 6th in Macau overall is now under construction. Filament work is now well underway and the substructure work in the podium and hotel tower areas has commenced.
Based on our current construction schedule, subject to timely government approvals, we are targeting the opening of the Parisian account for late 2015. We're extremely enthusiastic about the Parisian, which will be a themed aspirational destination integrated resort, featuring replicas of iconic Parisian land mines, including a 50% scale replica of the IFLO tunnel. The previous offerings have been designed to appeal to wide range of consumer base, including the business and leisure traveler or family that is visiting the Macao's attraction for the very first time. The dining, shopping and entertainment offerings at the Parisian reflect the cumulative experience and the working plan in our 10 plus years of integrated reserve development and operation of Macau. The Parisian Macau will be seamlessly motivated with our other Cotai Strip properties, the Venetia Macao, the Four Seasons Macao and Plaza Kasim and Sands Cotai Central, increasing the property portfolio's critical mass and business and leisure tourism appeal, while enhancing the total returns of our protest portfolio.
We are also advancing our plans to sell shares in the co op venture to prospective buyers of Four Seasons brand and our preference in the Empire Hotel on the Cotard Strip. On June 5, 2013, the latest approval on the development process was published in Macau's official consent. The eventual sale of our product hoteliers has always been a fundamental component of our catastrophe development strategy of monetization of core assets. Moving on to strategic objective number 3. The development of integrated resorts in new markets and new revenue rates.
In Asia, activity levels we should plan have increased and we are pursuing the potential for integrated resort development with great enthusiasm and optimism. Korea has also shown increased activity and we're looking forward to the potential development opportunities. We've also been investigating opportunities in other processes. With respect to Madrid, there are a variety of steps left in the development process. Any investment would be subject to the receipt of government approvals and the finalization of grants of 8 grants and incentive package that would enable investment as well as success in a competitive tender process.
I have a vested interest in pursuing one of the highest value projects that will maximize shareholder returns. As the company's largest shareholder shield, my address are aligned with yours. Finally, let's review strategic objective number 4, the return of capital to shareholders. We have now returned nearly $4,500,000,000 of cash to our shareholders through dividends and stock repurchases over the last 18 months, including over 3,700,000,000 dollars for Las Vegas Sands shareholders and nearly $700,000,000 to the non LBS shareholders of Sands Jet. It is gratifying that we have built our businesses and expanded our cash flows to the degree that we're able to return to the shareholders such substantial sums, while retaining a strong balance sheet and ample liquidity to fund future growth revenue.
We have every intention of increasing the recurring dividend at both Las Vegas Sands and Sands Canada in the quarters as our business and cash flows continue to grow. We are also pleased that the Board of Directors of Las Vegas Sands authorized on June 5, 2013, a $2,000,000,000 stock repurchase program. The stock repurchase program will complement our previously established recurring dividend programs at Las Vegas Sands and Sands China. And will provide another avenue for the company to return capital to shareholders. I'm pleased to report that we're able to complete the establishment of the program during the quarter to repurchase 883,000 shares of stock at an average price of 5,271 dollars per share, returning nearly $47,000,000 to shareholders.
We believe the repurchase program will enable the company to enhance shareholder returns in the future. In summary, we are executing on all four of our strategic objectives. I also wanted to point out that our leadership team is doing an outstanding job across the board. With our industry leadership, outstanding strategic position, strong operating momentum and the discipline and experience leadership team, we have in place to execute our strategy. I could be more confident about our continued success in the future.
With that, let me turn the call over to the operator to begin
Your first question is from Shaun Kelley with Bank of America. Please go ahead with your question.
Hey, Shaun. Hi, good afternoon, guys. Just wondering if maybe you could start with either Rob or Sheldon giving a little bit more color on the ramp up that you're seeing at Sands Cotai Central. It seems like the VIP side is very strong there. You saw some pretty big sequential growth in mass as well.
But we did notice that the like the hotel occupancy is dipped from last quarter. So how you see the hotel side ramping up and what you're seeing kind of out of the player behavior there would be really helpful.
Sure, Sheila. It's Rob. I'll just discuss the gaming issue for a second. Really pleased where STC is going. The big driver obviously was mass tables.
We grew from $30,000,000 Q2 of 12 to 114 this quarter, so terrific growth there. We're seeing obviously the VIP segment is leading our portfolio, so very positive there. Sheldon referenced in his opening remarks the lack of whole percentage, which is actually evident across the whole group of segments in STC. So we actually hold adjusted about $170,000,000 We've always felt this is $1,000,000,000 property. We think that run rate will be achieved some point, I'm not sure this year, but certainly in 2014.
So very, very pleased with what's going. The cross traffic between SCC, Venetian continues to build. And I think SCC, as we've always said, is built for the best market segment in Macao, that being the mass market. And that mass market segment is fueled by sleeping rooms. We've got 6,000 keys along with Venetian.
We have 9,000 keys between Venetian and SCC. Really bright days ahead in the gaming piece of this building. Really, really pleased, especially about the mass ramp there. And across the portfolio, our mass ramp grew from almost it went from 577 last year across all four properties to 920 this year. So I think the staggering growth in the CAL continues and we're the leaders in the mass segment.
We're approaching $4,000,000,000 of top line there. So very pleased where SCC is going, very pleased about the future. I think the rooms drive it. As we get more retail occupancy, that will help the gaming piece as well.
And then I guess my follow-up would be to maybe switch gears on the strategic side. You did get the another approval for moving ahead with the 4 Seasons co op sales.
Could you just talk a little
bit about possible milestones behind that? And then also what that might mean for development of the St. Regis or perhaps the last set of kind of the 4th tower over there at San Kokai Central that would be really helpful.
That 4th Tower is the Sand Regis. And that's a combination of a few 100 rooms, about 4 50, 500 rooms plus about 300 apartments. The government has informed us that once the precedent is set with the apartment hotel, By the way, the San Regis, we've been sitting with an approval to go forward with the San Regis. But since we didn't have the approval to sell the apartments on the co op or any other scheme, we decided not to go. But we still have the building front.
So I don't know what you mean by milestones leading up to that.
What I mean by I guess what I'm getting at is what's kind of what's next? Can you guys begin to pre market condos at the Four Seasons right now? Or do you need any additional approvals before you can do that?
No, no. We're all set. We're lining up the project management and the sales team. And we don't need any further approval. There are some minor things like to evolve such as how many of the apartments are going to be put in a rental pool?
Or the alternative, how many apartments will be held aside to rent. Those are minor negotiating points that we have to finalize with the government. However, as far as being able to sell them, we have that approval and it's been gazetted.
Thank you very much.
Thanks, Sean.
Your next question is from Joe Greff with JPMorgan. Please go ahead with your question.
Hello, everyone. Obviously, a big topic of late for all of us on this call has been concerns about a slowing macro picture in Mainland China and whether or not that's going to have some sort of impact in Macao. It doesn't appear to have any impact on results in the QQ in Macao or Singapore for that matter. Can you talk about what you're seeing more recently if there's any change in consumer behavior, any kind of impact, any changes in junkal liquidity? And I'll keep it as broad as that and have a follow-up.
Thank you.
Let me tell you the consumer behavior is going in the right direction as far as we're concerned. There are more people coming in spending more money. The macro view about China is not affecting the visitation to Macau. If anything, the visitation is increasing. Well, not if anything.
I can't give you a projection, but let me leave it at that. If anything, if there's any impact, the visitation is increasing. Look, this has been going on since for 9 years, since 2004, since we started. Every time there is some journalist decides to say something in the market and writes an article, typically without having the authority from the central government to state about how many visits one individual is above and how many individual IVS's individual visit schemes. It's everybody starts to scratch their head and wonder if there's anything to it.
To our knowledge, if there is anything to a macro slowdown in China, it is not affecting Macau as far as we're concerned. It's just the opposite of what people are suggesting.
Joe, to amplify Sheldon's comments, if you turn to Page 11 in the investor deck, This slide illustrates SEL's year on year growth in the most important segment in Macao, mass table games. SCL has grown 60% in the last year to $920,000,000 from $577,000,000 a year ago in this segment And the margin is still mid-40s, dollars 45,000,000 $46,000,000 $47,000,000 It's just a staggering market and this segment is the growth engine. The segment has grown from $2,000,000,000 in 2,005,000,000 to $13,000,000,000 this year in Macao. We have 1,000 games in the floor currently doing $10,200 per day. Upside in this segment comes from the organic growth of Macao market, specifically in Cotai, our ability to leverage our hotel and retail asset base in Macao and Cotai in particular to drive much higher win per unit.
We're just in a unique position to improve dramatically and CFCL's mass table growth grew to $4,000,000,000 $5,000,000,000 $6,000,000,000 $6,000,000,000 $6,000,000,000 dollars years ahead. We're in a very fortunate place in a very strong market. And I think the numbers speak for themselves. That slide to me is staggering and the profit margin is equally staggering. So this is the story in Macao and the consumption on the mass tables just grows and grows and grows.
Excellent. And then my follow-up is you started buying back stock at the end of the 2Q. Have you bought anything since the quarter ended here in July? And also on this topic of share repurchase. Can you review your strategy with regard to repurchases?
Is it more programmatic, consistent or is it more episodic depending on the valuation and depending to movements in the
stock price? No matter. It's opportunistic buying. If we see the stock price down below where we think it should be, we're going to buy. But once we start to buy, we don't know whether or not people know we're buying or we don't know.
But the stock seems as soon as we step in, the stock seems to go up. But we can't state what we've done so far this quarter because that would be selective disclosure. All right, guys. Good stuff. Thank you.
Thanks, Joe.
Your next question is from Cameron McKnight with Wells Fargo. Please go ahead with your question.
Great. Thanks very much. First question, can you talk to the hold percentage in Singapore? This has been the Q3 in a row where hold has been a little bit lower than expected. And we've had a number of questions from folks just asking about that.
So if you could address that, that'd be great. And then I have a follow-up.
Sure. You're right. This is actually the 5th quarter we've been under we would like to be at, but still light to date since we opened the property, whole percentage is about 2.65%. And in the aggregate, if you add our competitors, the market is about 2.9%. No mysteries here.
We just haven't we've had a lot of amazing play. We're running a run rate of $60 plus 1,000,000,000 for the first time ever in this year. Very encouraged by it. I have no concerns whatsoever. We take very large bets there.
The swings are dramatic. The market is very concentrated. I have no explanation except in the end the math always wins out. Across our portfolio worldwide, when you add up what we do here in Las Vegas and Macao and Singapore numbers are just where we're expecting to be north of 285 on the rolling segment. So a total confidence in our team, total confidence that nothing untoward, very confident the end of math will prevail.
So no concerns there at all.
See just like the cards doesn't know, the cards don't know how much money is being spent on them. The log averages is not impacted by anybody's questioning whether the average were above average or below average. It always turns out that a lot of averages like a lot of physics doesn't change. Over the long term, the number is going to be 2.85. That's why they call it a theoretical average.
To reach the average, you have to have some periods below and some periods above and that all lines up at 2.85.
Yes. We did have a couple exceptionally strong quarters back in late 2011, early 2012. We held 3.5%, 3.6%, it's been a disappointing run, but one of these quarters will break out and hold 4.2% and knife will go back to 2.85%, so no concern.
Right, got it. And then as a follow-up, Rob, we're hearing on the ground in Macau that some operators have been increasing the amount of credit they're extending to junket operators. Can you talk to the overall credit environment in Macau and also the VIP market and conditions there?
Yes. In the VIP market, the numbers speak for themselves. The market has not been the growth engine in the past. We continue to believe it's not driven by credit. It's driven by lack of back end demand by the consumer.
We're happy to extend credit because our credit track record in Macao has been excellent. The fact is when demand is there, we'll extend the credit. I don't think it's a credit driven issue in Macao because the operators will give credit. It's demand driven by the consumer. And to be really honest about it, we're happy to participate.
We're very happy where we've gone in that segment in the last couple of years. But from our purposes, the VIP issue is all about consumer demand. If demand is there, we'll extend the credit. Our junket partners will extend credit. But that story has been overwhelmed by the extreme growth in the mass side of the business.
So as much as we want to keep anticipating growing our junket business, our year in this quarter is dictated by the ridiculously strong returns in mass tables.
Our junket business is better for us. Well, it's not junket business, but the VIP business is better for us in Singapore. 1, because of the tax rates and number 2, because the chunk of reps themselves don't limit the amount of bets that the players can make. We can accept very large bets up to a $1,000,000 Singapore dollars, But the junket reps in Macau have too many customers and they don't want to take that risk, Because if everybody bets $1,000,000 a hand and a hand as you probably know unless somebody twists the cards takes about 30 to 60 seconds. So we'd rather see that high end business.
And fortunately, there's no we're paying very high commission for the players, but the tax rates help make up for that. We'd like to see more of that business, the $1,000,000 hand business down in Singapore. But we're not doing anything to push it down there. It just happens to go there.
Okay, great. Thanks very much guys.
Your next question is from Felicia Hendrix with Barclays. Please go ahead with your question. Hi, good afternoon. Rob, I wanted to talk about your mass table yields in Macau a bit. You've been increasing the mass the number of mass tables and your mass table win per day has been going up.
In the quarter it was flattish, which is pretty impressive. So I just wanted to talk to what wanted you to speak to what you're doing to drive those strong results? And then I have a follow-up.
It is flattish in the win per unit basis, but it's in the aggregate, it's growing up because obviously we have more tables on the floor. But it's pretty simple. It's yield management and we're looking at our mass table yield. And this story as you know Felicia, this industry just doesn't have any place where you can make $10,000, $11,000 $12,000 win per unit per day. It's beyond comprehension for me.
When I go to Macao, it's shockingly strong and growing across the entire market. So we're simply, as managers, looking to get the most yield we can at a table. As long as junket performance stays on par, we'll stay with junkets, it's an important segment. But the reason we're moving more tables to mass scores is evident to you by looking at our numbers. We increased over 1,000 mass tables.
We may go to 1100 mass tables. We'll just keep riding the wave. When you realize what's happening in mass tables, to think about the fact that wind producing in the market have grown to as high as $12,000 $13,000 at 45% margins. How do you not do what we're doing? It's the only intelligent thing we do as managers and that's the yield up.
And we do that in Pennsylvania. We try to do it in Las Vegas, where it's possible. But no place is like the cow. As you well know, it's just extraordinary and we're very fortunate because we may be somewhat overrepresented in one segment and we'll adjust accordingly. So I'm not concerned about our win for units, you're right, it's down to 10.2% to 10.1%, but the aggregate win is up significantly.
We keep adding more and we'll keep doing it because we believe that mass table business as long as it's 20% to 30% growth, we're the biggest beneficiaries. The primary growth resides on Cotai. That's our biggest representation of tables. When you see the kind of numbers we're getting out of Venetian SCC, it's very, very gratifying. So that's our direction.
As managers want to yield up, we'll keep doing that.
Great. And then just moving then to the slots side, kind of similar conversation. So the numbers of the slots and ETGs have been declining and the slot win per day as well. So I was wondering if you could discuss that.
Yes, exactly. We keep changing the mix there and we're big fans of slot ETG. I mean the margins are breathtaking 50 plus percent. I'd like to see that business grow across the board not just for our company, but Macau It's somewhat flattish and that growth is somewhat surprising to me. But I think, as you know, as you yield up on mass table games, you're pushing a segment of the market where the consumer can't participate.
I think the real value to our slot ETG program, especially ETG, is it offers a place for the customers not betting 2,000 Hong Kong to a place at the table, so to speak. So we're complete believers and we have I mean one of the things we did very well when Sheldon built the Venetian, people were shocked at the sheer size of the building. But in the end, it was a great trade because that real estate now, which a lot of people felt was wasted space, can now deploy a massive ETG slot strategy enables us to be honest with you, a lot of customers are pushed out of the market. The table yields are pushed up. The number is so high on the minimum bets that they're looking for an alternative and that's what ETGs do.
I'm surprised it's not growing faster in our portfolio, but we have a lot of confidence. It's a great segment. I still believe that they will do $1,000,000,000 of spot ETG in the aggregate across our portfolio. So not as exciting as mass tables for this quarter, but still a really nice segment to be in and one we're very committed to.
Great. Thanks a lot. Your next question is from Carlo Santarelli with Deutsche Bank. Please go ahead with your question.
Guys, good afternoon. Just as you look at
kind of the cadence of share in the market as the mass market continues to grow, obviously your presence in that market should be a net benefit with respect to share. But over the last few quarters here as SansCoat DSSENTIAL has ramped, we've kind of seen a flat line at about 21% and I know you guys are trying to optimize that. Is there anything here on the come in the future where you think there's some low hanging fruit and an opportunity to start to take a bigger share of the wallet over there?
Yes, I do. I think we're in the pole position to do just that. I mean, if you look at our ramp this quarter, you think about growing from 5 something, 9 something year on year, what business the world goes 60% or 45% margin? Yet to your point, Carlo, we're exactly positioned to do that because of we're on Cotai. I mean we developed Cotai with the idea it's the mass market machine, hotel rooms, fabulous retail opportunities.
So to your point, I think we have a lot of growth ahead of us. I think $4,000,000,000 $5,000,000,000 $6,000,000,000 Who knows how high it goes? But we're positioned very well because we have the tables, we have the sleeping rooms, we have the retail, we have the whole show and no reason why we think we can't keep yielding up materially. I think SEC is going to be a big surprise to our people as it goes beyond $1,000,000,000 of annualized EBITDA. I think Venetian has upside potential.
We struggled at the 4 seasons to get there. We're going to get there in terms of the right yield per table. But our story is about this ridiculous growth in mass tables. It's primarily a Cotai story. We are the biggest Cotai provider.
So I think our story is just beginning. We're in the infancy of this growth. This is not the story is just starting to be told now.
Exactly. And I
think the vision that Sheldon building Cotai, this never could have without Cotai. You don't have the physical space to build these big places. You're just stuck in the peninsula. The vision here a decade ago to build Cotai is now really being fulfilled. The vision is really starting to like a tower where I think our properties are going to grow and grow in this critical segment.
And Carlos, just to clarify what Rob said, I mean, he's talking about math the whole way and we've gone in a year from 24.3% of the mass market for tables to 29.9%. So that's what we're focused on, not the revenue number that includes the 10%, 11%, 12% margin business. We're always going to be focused on that piece. You got to remember
that SJM that maintains the leadership and the gross gaming revenue has 19, what I call, sublicensed casinos, 19. So they're each picking up a piece of business and they're not they're just sub licenses that have been there for many years that the government allowed Stanley Ho and now SJM to sublicense their license and their ability to operate casinos to 19, 20 other people and yet they're only 2 or 3 percentage points ahead of us. We're operating 5 casinos. If you separate 56 and the Plaza, The Venetian and The Sands. So there's only 5.
They're operating over 20 some odd casinos.
Yes. So sure, that's not forgotten. Thank you guys. That's really helpful. And then just quickly on the Four Seasons.
I know Rob you mentioned it a little bit there. Obviously the mass hold was a lot lower this quarter than it has been running, but on better drop in volume, is there anything structurally there that changed maybe that would make us think about it differently going forward?
No, nothing at all. I mean, you have the cage that won't let's not go into the whole cage drop issue, but it's not worth talking about. But the 4 Cs is a work in progress. We're not happy where we're at right now that we can do a lot better. And we repositioned that.
We're in a transition period. Carl, I think we all know that. As we move more into this premium mass mass business there, I think numbers will get better and whole percentage will be what's going to be. And we know with that kind of volume whole percentage pretty much stays flattish when it's all said and done.
Great. Thank you.
We sell out the 300 apartments at the Four Seasons. That will bring us in a lot of direct premium or premium direct at the high end because anybody spending several $1,000,000 from an office is going to play in the 4 seasons. There'll be direct play or there'll be premium mass. So there's that's one element that's going to contribute to an increased growth and increased EBITDA number.
Appreciate the color guys. Thank you.
Well, I just like to emphasize, we have never been an advocate of gross gaming revenue. Now I know you have to start somewhere, but everybody's you got to start off at the top line somewhere. But where you end up at the bottom line is the most important thing. And every single quarter since 2004, we have done more than anybody else in Macau. And we continue to do more and nobody is even close to us.
But you could bring in a lot of these guys that are doing a lot of business are only doing it because they're trying to be competitive with us And they are trying to increase their gross gaming revenue, so they think that that's the bottom line. I never saw anybody to deposit in the bank gross gaming revenue, only net profit. The tow doesn't take GGR. Thanks, Carlo.
Your next question is from Stephen Kent.
Listen to me. Hey, Steve. Carlos, I'm going to get insulted. Steve, Kent. Steve?
Mr. Kent, your line is open.
Can you
hear me now, Dan?
Yes, please.
We can. Yes. So, two quick questions. 1, as much as people focus on the whole percentage for, Singapore, the volumes have been very, very strong, especially at the high end. And I was just wondering if you could give us some indications as to what's driving maybe some of that incremental volume, because at one point there was a question about that.
And also on that same on Singapore, the slot play also volume was very, very high and whether there's some early thoughts from that, that might be part of your strategy in other parts of the world? And then one final thing, CFO search, if you could just give us an update on that. Sure. I
was just telling you that the fact that we're taking up to $1,000,000 event is contributing to a very big top line ruling number. That doesn't mean every bet is a million. Some guys just want to have the right to better make it if they want to bet it. It's a matter of ego they boast to their friends, oh, I can play $1,000,000 a hand if I want to. The CFO search, we've retained a, I think an executive search firm and we're looking so far as I know.
Mike is involved with that. Mike?
Yes, I'm here. Can you hear me?
Yes, we can hear you.
Yes, we're in the process of the final selection of search. We've done all our specifications. We're reviewing our alternatives and doing specific situations as to how the job should be really put together. And in the meantime, our team is doing very well. And as you know, Ken is still there.
So we're in good shape there. We expect that we'll have something happening in the next 3 to 4 months. And Sheldon, just on that on the Singapore, the amount of volume there, besides the propensity for people to make big bets, what I guess I was asking was, were you seeing more people from different parts of the world? Because again, that was one of the strategic focuses to go into deeper into Southeast Asia to bring more and more customers into Singapore. And are you starting to see that?
Steve, it's Rob. Frankly, the answer is it remains the same sources. That being we've always said it's concentrated. It's certainly Mainland China is the primary driver Hong Kong. Non Singaporeans who are PRs, permanent residents in Singapore are important as well, Indonesia.
The region hasn't changed a whole lot. We still see some business from Tokyo and Korea. But the principal drivers in the last two quarters have been A, Mainland ChinaHong Kong B, permanent residents living in Singapore who may be Chinese nationals and then C, Indonesia. Again, this remains a highly concentrated market. I don't think we've seen a whole lot of difference in terms of the previous quarters.
And I think it will remain highly concentrated and hopefully we'll grow it. We're pleased to see ourselves getting into the $60,000,000 $60,000,000,000 annualized run rate area. But the challenge remains the same. Sheldon referenced the high nature of the bedding. We take the highest bets in the world there.
And our team is committed to keep trying, but I can't tell you something we've changed from the last year fundamentally in terms of that. Your reference to slot ETG, I think you know the story there. Everyone knows that the government is more restrictive visavisingiporian local play. We are outsourcing or I should say we are growing our business outside of Singapore, both premium mass, primarily table slot to a lesser degree. The slots are challenging because primarily slot business in any market is regional, depends on the region you're in.
Less visitation by Singaporeans has been more than offset by increased visitation by non Singaporeans, Indonesians, Malaysians, Chinese, etcetera, have helped our business there. We remain confident that there's growth ahead of us in the wind free unit per days and the mass table non rolling as well as slot ETG, but we're kind of flattish this quarter over all the blends around 4, 5 and change. We'd love to get back to our ambition 2 years ago is to approach 5,000,000 a day. We haven't seen growth Q on Q, but we're lapping last year's what happened in Q2 of 2012, the pullback by the government. So we grow our business outside of Singapore.
We remain confident there's some growth there as well. Okay. Thank you. Sure.
Thanks, Steve. Operator?
Your next question is from Thomas Allen with Morgan Stanley.
Hi. You talked earlier about the improvement in visitation to Macau that's played out the past few months. What's your view on what's driving the increase? And do you think it's sustainable? There appears to have been a number of infrastructure improvements for the past couple of months also had easy comps.
So just wanted to hear your thoughts on it. Thank you.
I think it's I'll start off with the first comment. It's the infrastructure. There are more high speed trains coming from Guangzhou and there's more and more trains that are coming from the north from Fujian province. The further route the tentacles reach with the high speed rails, the more visitation we get. And there's more and more infrastructure coming in.
They'll be able to move around with the light rail system a lot faster. And I understand that while we were talking at length about this yesterday, Once the bridge, the Hong Kong Zhuhai Macau Bridge opens in 3 years, hopefully earlier, it's going to be Katy by the door. It's going to be incredible numbers of visitation because instead of having just the Macau Airport, you got the Hong Kong Airport that's already bringing in 50 handling 50,000,000 give or take passengers a year, you're getting so if somebody says, okay, I can either go to Hong Kong Island, which takes 45 minutes or I can go to Macau, which takes 20 to 25 minutes. So once I leave the airport, I go to the right, I'm going to Macau, I go to the left, I'm going to Hong Kong. When that opens, it's like I said, Katie, by the door.
There's going to be incredible it's the infrastructure that is holding up a significant increase in potential attendance.
And then I mean last year there were around 28,000,000 visitors to the market. And you've said the past two quarters you've had around 14,000,000 visitors to your Cotai properties. Do you have numbers around where you think that will go maybe in 2016 when the new supply opens? Thanks.
I don't think that anybody could say. It depends which how many trains they put on the high speed rail, so far out they're going to go that people can travel. What used to be 8 hours is now 2 or 3 hours and people go for 1 night stays. In Macau, instead of going 8 hours in each direction and take quite a while to travel. I don't think anybody could read that crystal ball.
But one thing I feel very confident, that's why we're building another Lot 3, we're building the Parisian to over 3,000 rooms, because it is I don't see any reason to limit the number of people. We are talking about Macau having 2 airports, the Macau Airport and the Hong Kong Airport. As a matter of fact, it'll be just as quick to get into Macau from quicker to get into Macau than Hong Kong. They say that they're talking about 45,000,000 visitors, I think, to Macau sorry, to Hong Kong. And we had 28,000,000 visitors last year.
But based upon our comps and our properties on a same store basis, we're looking at significant increases in attendance. I can't get into much further, but when I say significant, it's more than 5% or 10%, a lot more.
Very helpful. Thank you.
Your next question is from Harry Curtis with Nomura Securities. Please go ahead with your question.
Good afternoon. Can you give us any updated thoughts on development in Japan or casino legislation in Japan given the LDP's recent victory?
Well, as I understand listen, we've been lobbying there for 5 years. And we've had a very strong presence there. We know everything that's going on. The restoration party headed up by Hashimoto in Osaka, who was alternately Governor of the State of Osaka and Mayor of the City of Osaka, I've gone back and forth. And Ishihara, the former member the former Mayor of the Tokyo Metropolitan Government and or just Tokyo.
It's kind of like a city in the States like New York, New York. They wanted to cement the barrel in June and but they didn't have the club they didn't have the number of votes to carry it. Right now, it appears as though November is the anticipated date that the bill will be submitted. The problem with the bill, well, there's good news about this. The good news is they're finally going to submit the bill to legalize full casino game.
Secondly, the bad news is it's going to take a couple of years. The other guys wanted to do it for a limit on it. Now it looks as though 2 years is the outside limit. It could get done a lot sooner. It's not that you have to that the various candidate cities have to wait 2 years, but it has to be done within 2 years.
So we don't have any more inside information.
Okay. Then let's move on to the second, which is kind of the genesis of LVS Vegas. Most of the metrics there were better slot, table and RevPAR. Is this is there a better tone there? Or do you think it's a head fake?
Head fake. Good quarter, but
I don't know. Listen, as long as President Obama doesn't say, you can't take ex pay his money and go to the Super Bowl or to Las Vegas, we stand a chance of growing back up again. I don't know if that's dead. And then everybody could say there's any significant turn for the better or significant turn for the worse. I think it's just neutral.
Harry, I think it's a challenging place in terms of it's got to grow ADR to improve obviously in non gaming side. That's going to be the challenge in this town and that will come first out of the convention segment. We think that's we're hoping for a turn there in 2014. On the gaming side, truth is we are very dependent on high end premium Asian players who come here. And although we participated, we've done very well in that segment, we're happy to be in it.
The entire town doesn't share equally in that. And on the gaming side, slot and mass tables continue to be mediocre. The premium segment is very strong on the Asian side, but that's the tail of Las Vegas today. I don't think I wouldn't call it a head pain as much as a it's just a challenging market that will slowly get better, but I wouldn't look for rapid improvement next few quarters.
Look, I think the issue Harry is that there are 2 companies that own about 20 some odd properties on the Strip, on the Strip or just off the Strip. And they're really controlling the room rates. We had during our growth years, 1st decade, we had the highest grossing hotel room income for almost even for small to medium sized chains, The Venetian proved itself as the most profitable hotel ever. And now we have 2 major holding companies holding operating companies, Caesars and MGM, both of which have significant debt and they don't have a big way to pay them off. Caesars has got $22,000,000,000 $24,000,000,000 And I guess their income just barely pays their debt service, so maybe it exceeds it by.
So they're trying to fill up all their rooms and get more bodies in to play the slots and to play in their casino. I don't necessarily blame them. I suppose if I'm in their position, I might do the same thing. They need bodies in their casinos and they need bodies in their beds. And the only way to get them is to buy the business by reducing the price.
And that brings down my friend Steve wins in our higher end properties where they're undercutting us by large amounts. Of course, they don't have the quality. Well, the Bellagio is a good property. They don't have the number of rooms that we have at the high end of the market. So obviously, people want a better property, they'll pay more for us.
But they're they're trying to the sucking sound that we hear is they're root pressing and trying to reduce the trying to fill up their properties so they could do something to help pay off their excessive debt. And they don't have the business model we do to sell off non core assets and pay down all our debt. We could be totally debt free by selling off our just our malls, not necessarily the apartments, but just the malls. We could be totally debt free. So that's an opportunity that we have that others don't have.
And as long as they're in that position, they're going to keep the room rates down. Hopefully, they get out of it.
Operator, we have time for one more question.
Yes, sir. Your final question today is from Ian Weissman with ISI Group. Please go ahead with your question.
Yes, good afternoon. You guys gave timing on the opening of the Parisian. Was there any update on the table allocation and any concern about competing with 4 or 5 other projects going at the same time and labor shortages and getting those projects built on time?
Well, the government would not have given building permits if they didn't think that they would have the they could allow the labor. And right now, there's been no change in our estimate. As a matter of fact, we're moving a little fast because we're practicing a follow on trades practice like you do in building high rises. As soon as you finish the structure, you come in with the MEP and you drill through the floors, etcetera, etcetera. And then you have one trade following another sequentially.
We're doing that in the pilings. We have both board pilings and driven pilings. And what we're doing is taking the corner of the pilings and we're putting the piling caps on. As each of the pilings are completed. So we're starting off the it's sort of a foundation.
You put the plow caps on and then you start the structure on top of that. So we're taking a little taking advantage of the opportunities to keep the farm labor that we have and trying to get it done even quicker. That's helpful. There is no news on table allocation. We have always been every company I've ever run-in my lifetime, I've always been a competitor.
And I can touch wood except my table is not woody. But it's now stone.
That's helpful. One last question. Just given the enormous success of the mall at Marina Bay Sands and it's sort of in the early stages of the cycle of the mall, Maybe you could talk a little bit about the releasing spreads as leases are coming due or you're turning tenants over, what type of rent uplift are you getting?
Well, I don't think I can answer that. I'm not sure. Last time I talked to our Head of Leasing, he was optimistic that because the people who wanted more space, they want multilevel space like Chanel started off with 2 or 3 floors and put large identification, large signage and there were other tenants doing that Prada and other tenants. The Crystal Palace or Crystal Pavilion with Louis Vuitton is only like over 120,000,000 dollars 120,000,000 sales, dollars 120,000,000 $140,000,000 It's one of their best shops in the entire country. So our retail is going very well.
I'm certain that look, we're getting a base rent plus percentages and there are other developers that get base rent plus a 2% or 3% percentage on top of the base rent, but they charge very high base. We charge up to 18% percentage, right? So whether we get it new or we get it by increasing upon when leases expire doesn't make any difference because we're getting a percentage. It's we're doing very well. I'm very happy we could sell that like pay off almost the entire cost, not just the mortgage.
Okay. Thank you very much.
And ladies and gentlemen, that does conclude today's conference call. Thank you for your participation and you may now disconnect.