Good afternoon. My name is Katrina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Las Vegas Sands 4th Quarter 2020 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. I will now turn the call over to Mr.
Daniel Briggs.
Thank you. Joining me on
the call today are Rob Goldstein, our Chairman and Chief Executive Officer and Patrick Dumont, our President and Chief Operating Officer. Also joining on the call are Doctor. Wilfred Wong, President of Sands China and Grant Chung, Chief Operating Officer of Sands China. Before I turn the call over to Rob, please let me remind you that today's conference call will contain forward looking statements that we are making under the Safe Harbor provision of federal securities laws. The company's actual results could differ materially from the anticipated results in those forward looking statements.
In addition, we may discuss non GAAP measures. A definition and a reconciliation of each of these measures and the most comparable GAAP financial measures is included in the press release. Please note that we have posted supplementary earnings slides on our Investor Relations website. You may refer to those slides during the Q and A portion of Call. Finally, those who would like to participate in Q and A session, we ask that you please respect the request to limit yourself to one question and one follow-up, So we might allow everyone with interest the opportunity to participate.
Please note that this presentation is being recorded. With that, let me please turn the call over to Bob.
Thank you, Dan. Good afternoon, everyone, and thank you for joining us today. The last 2 weeks have been the most difficult in our company's history as we mourn the loss of our founder, Sheldon Adelson. Sheldon, as you know, was a visionary. He led the transformation of not one, but 3 integrated resort markets, that being Las Vegas, Macau and Singapore.
He authored the Mike Space integrated resort model in Las Vegas. We pioneered the development of the Cotai Strip in Macau and reimagined the skyline of Singapore to the iconic Marina Bay Sands. His audacity to challenge the status quo transformed entire markets. In Las Vegas, Sheldon originated the convention based integrated resort Well, no one and I mean no one who believes this viability or sustainability. Today, Las Vegas conventions are synonymous.
In Macau, it's easy to forget how Sheldon's vision for CoTight defied the consensus thinking at that time. Every element of Venetian Macau is questioned by the skeptics and I mean every element. A 3,000 room all suite hotel and the overnight tourist market Almost didn't exist, existing hotel inventory was very limited. The brand can now shop for the 300 retail stores in a market that had virtually no retail, A 15,000 seat arena and 1,200,000 square foot convention center. He dragged big, but he also delivered who developed a critical mass of world class integrated resorts at record speed.
Before others had even dared to dream, He completed the Michelin account in 2007 and was the 5th year of our company's 20 year concession. His determination in pushing forward diversification Investment in non gaming Macao was unwavering and breathtaking to be part of. Our total investment Macao today exceeds US15 billion dollars You know that Shaul is a big believer in a strong, healthy and cordial U. S.-China relationship. He believed it was To the benefit of both countries to maintain a bilateral relationship based on mutual respect.
The company, the Board and the family are absolutely committed to continuing Sheldon's efforts in this regard. Sheldon is a replaceable as the visionary founder of our company of the unmatched portfolio of integrated resort assets and the management team he assembled to operate and expand the business in the future remain here in place, ready to work. The DNA of the company that Sheldon founded will remain ever present. The company with the full and wholehearted support from the Board and the family We'll continue to honor Sheldon's vision to protect, enhance his legacy. We look forward to the future and optimism.
While the pandemic continues to impact our business adversely, we have achieved positive EBITDA in both Macao and Singapore in the 4th quarter. There is no doubt in my mind our business will be down to pre COVID levels in the future. In Macau, the Grand Suite tour seasons is now open and the first stage of London Macau will officially open in February. We are very excited about the progressive unveiling of the London Macau throughout the course of 'twenty one. Sands China is well positioned to capture the rebound in tourism when the pandemic finally does subside.
We believe we've always believed there's no better market our company invests in than Macao. We will continue to invest in our resort products, Nurture our local talent and of course support the local community which we are grateful to. In Singapore, we remain very committed to long term investment in Mirabay Sands, including both the upgrading of our existing facilities and the expansion of that property. On a personal note, I spent more than 2 decades with Sheldon And I have both the fun and pleasure of working for Mr. Shelton.
He is a great mentor. He is a great friend. And I guess what speaks volumes about his generosity Reflecting the decision to continue to pay our team members even if the pandemic dramatically impact our business. He was adamant that team members continue to receive pay and health benefits even while we're closing our buildings. It was abundantly clear that our business will be hampered for quite some time.
In the days since this past, we received condolences from around the world from global leaders, elected officials, business partners, investors, customers and many of you joining us on the call today. We are touched by the outpouring of support and we appreciate that. I am honored to have been invited by the Board of Las Vegas Sands and Sands China to become the Chairman and CEO of both companies. With the full support of the Board and the family, I will work hard with our outstanding team members The management team to fulfill Sheldon's extraordinary vision. I am confident as Sheldon was in 1995, this company will grow from strength to strength of the future.
One final thought before we turn to questions. I look forward to the day we can say, yay dividends.
Operator,
first question, sir, we have Joe Greff from JPMorgan. Your line is open.
Good afternoon, everybody. Before asking questions, I just want to offer my condolences to all of you, as well as the Sam. I know Rob and Patrick, you were obviously particularly close. So it's a big loss and he truly was one of a kind. Thanks, Joe.
We appreciate that. Thank you.
So my question and my follow-up Focus on Macau. And when we kind of look back at what's transpired with towards the issuance from Mainland China Into Macau, it's obviously it's been more slow the progress has been more slow than maybe what all of us anticipated, though it has shown some progress. Other than the government having this intentional gradual easing of visas to Obviously, dealing with this little tiny thing called the global pandemic, are there any other policy issues or things That are maybe weighing in on visitation other than just simplistically visas are kind of being granted in conjunction with Infection rates and vaccination rates and the like. And when you talk to folks in China, what specifically are folks looking at or metrics and improving metrics to sort of see a further easing of tourist visas.
We're fortunate to have both Wilfred and Grant McCall. I'm going to ask them to address that question, Joe. Gentlemen?
Yes, Grant, do you want to shop?
Yes, I want you guys to take a yes, please. Grant and Wilfred.
Yes. Good afternoon, everyone. Yes, I mean, Joe, I think following the resumption of the Visa issuance from late September, the business Volumes clearly did rebound during the Q4. And the recovery was led primarily by premium mass and luxury retail. I think both the both segments actually did show good momentum throughout the quarter.
So in December, we had a very encouraging month, especially the holiday season. We reached over 50% hotel occupancy during the month. And there were the peak days, we were achieving 8,500, and 9,000 room nights, which obviously we haven't done anywhere close to that since January. And if you look at the pace of Recovery in retail, the luxury retail sales really took off during the quarter. And by December, Our Four Seasons retail mall was up 16% over the prior year.
Actually, we had the best ever month that we ever had in Four Seasons mall tenant sales. So that's pre and post pandemic, a record month. So an issue here is what you referenced. There is just not sufficient visitation to power all segments of the business and to replace the volumes That we lost. So the base mass remains very subdued.
Macau only had 20% of the prior year's visitations during the Q4. So really there's not a lot you can do about that. It's not a policy issue in the sense of They can do something now that they would not otherwise be doing in light of having to prioritize Control of the pandemic and obviously the authorities have done an excellent job in that regard. So what you have to remember is that during the Q4, There are a number of many outbreaks, local cases in different provinces and cities in China. And in October November, they were relatively muted.
And even for the first half of So the number of zones or districts that were classified as medium to high risk from a COVID perspective were relatively few. But from about, let's say, 3rd week of December, the domestic cases started to rise In Northern China. And what we saw was that a lot more districts, a lot more zones And sometimes whole cities were classified as medium to high risk, which immediately obviously puts a break On visitation from those affected zones or cities, but also the overall narrative and travel advisories related to COVID becomes obviously a lot more cautious and that impacts forward bookings. So from about middle December, Well, up to that point, we were getting very positive momentum in terms of forward Bookings in January and obviously into Chinese New Year. Obviously, things will start to moderate from a forward booking and the pace of new bookings and obviously the increase in cancellations.
So that is directly related to the trending Of the pandemic and some of these isolated outbreaks that we've seen, particularly in the northern provinces. So with that in mind, It's not easy to see relaxation of the current Guidelines in terms of travel. What's that? That's helpful.
And then I have a follow-up just I guess more on sort of me continuing this idea of Macau policy. Maybe this is a question for Walsart or anybody on a call can share, but do you think either Macau or the central government in Beijing want mainland Chinese companies getting involved With Macau Casinos either existing by an existing states or having Board representation, Is this something that's a priority for the government or important? Have there been discussions? I kind of remember hearing something along these lines maybe a couple of years ago as this potentially happening on the ground in Macau a couple of years ago. But we're getting more questions and commentary on that of late.
So anything you can shed on that would be interesting. Thank you.
Wilfred, or Grant or Patrick, you want to jump on that?
Yes. I think the obviously, We have not been told of anything at this stage. Consideration is Now being given to what the conditions should be for the new concession. We have not picked up any or nor have we been consulted on whether there should be Participation of Chinese companies. Now, but we have to bear in mind that Chinese companies are unlikely, I mean, Real Chinese companies are unlikely to take part in gambling, which in China is considered not legal.
So there were in the past some suggestions of people saying state owned enterprises might come in. I don't think this really in line for their policy consideration. Whether private Chinese Companies would be allowed to participate in Macau and under what circumstances. These are things that have not been brought to us at all. So the only thing I can say at this stage is that we will continue to do our best in Macau and show that we are a locally rooted company Because we are listed on the stock exchange in Hong Kong, so we are just the same as any Hong Kong company and that We do everything even better than other competitors.
Joe, can I just jump on Wilbur's very, very thoughtful comments? We've been going to Beijing for around 20 years in Macau and having endless meetings. I know there's an outsized belief by some people write these things and They constantly opine their thoughts on how equity should be sold to Chinese companies and they're jumping in up and down. I've never ever had a conversation with 1 person who mattered, whoever said that to me, even made that comment. In fact, if anything, they kind of chuckle Because to Wilfred's comment, there's not a big appetite to invest in gambling.
So I think there's I know it's very prevalent in the market. I hear it quite a bit. I know somebody wrote something recently about how we could guarantee our licensure if we sell X percent. It all sounded very good, but one thing, No one's ever said that. The government to us never heard that from anybody actually understands how McAllen, Beijing operate.
In fact, I think what we do here is complete Affirmation of what Sheldon has always done, which is invest heavily, invest heavily in non gaming activities, Believe in Macau, support your employees and think big and grow. That's been the exact direction for at least the last 5 years and before that we heard more from the Macanese officials. We've never heard from, hey, you got to sell steak to Chinese people or we've heard please support your employees. Sheldon did that to a tee. We paid everybody through the pandemic.
It cost a lot of money. We did it. Invest in Macao. I think Sheldon, we've covered that one already, dollars 15,000,000,000 Invest in non gaming. That's always been a direction, but not one time from no one I've ever heard, oh, you got to sell equity.
I want to hear that these people write these columns or I believe that they understand the thinking over there. I did once meet with a very, very good person, very important guy in the Chinese world, Businessman. And I suggested that to him, he started laughing. He said no one's going to buy into a Chinese gambling company, whether it's Macau or Las Vegas because that's not what we're going to do. We found it kind of humorous actually.
So I know that's a common prevailing thought, but we don't hear it.
Great. Thank you, guys.
Next question, we have Carlo Santarelli from Deutsche Bank. Your line is open.
Hey, guys. Thank you for taking my question and I echo Joe's sentiments about the recent loss.
I want to just thank you for your kind notes to call and to us. We appreciate you, Will. It was very kind and thoughtful. We really appreciate it.
Thank you, Will. If I could, just very simplistically, To the best of your understanding, how should we expect the concession renewal process to actually get moving? What do you guys foresee as the timeline to when potentially we could start to see some announcements as to the process and the timeline for the process and etcetera, just in its simplest
I'm going to turn back to the fellows in the Cowen. I think they're best suited to answer your query. Wilfred, Grant, help us.
Yes. We are as eagerly waiting for the government's direction Because as you all know, we only have about 17 months left before the concession expires. And we only know that the government is adopting a process which includes public consultation on the performance Of the concessionaires and the targets of achieving diversification that The amendments to the legislation has to be introduced into the legislative council and then the bidding process So it's a very tight timetable that we are running against. We also know that There is a legislative council election scheduled for September this year. So all these are Coming into play and we are coming up against a very tight timetable.
We don't know whether This will be begin very soon because right now the government is All involved in the fight against the pandemic. As we all know, Macau cannot afford a single case because It was a public announcement by the government that if there is even one case Macau would be locked down again. So the government is putting all their energy into the fight against the pandemic to ensure that visitors can continue to come. So We don't know. The short answer is we don't know.
And when asked about this publicly, The Chief Executive said that anything is possible. I think he was asked whether there could be an extension or how soon can this be done? And his response was anything is possible.
Great. Thank you very much. That's very helpful. And then Just as a follow-up, obviously, last quarter you guys talked a little bit about the Las Vegas asset potentially For being open to entertain offers for that asset. How much, Rob or Patrick, does that influence Potentially the timing of the return of the dividend or do you think more about the dividend from the lens of when Macau is back and Marina Bay Sands Back to doing what they do, you'll be able to kind of reinstitute that.
Patrick? Hi, it's Patrick. So a couple of things. We have a very positive view on Las Vegas. I think long term, it's irreplaceable in terms of a tourist destination.
Huge amount of investment Going to Las Vegas, we think there's a huge amount of potential pent up demand just looking at other markets when there's going to return. And really the and Las Vegas now are based on the capacity constraints set by the government. On weekends, we're actually doing quite well. There are days where we're actually Almost at 2019 slot levels. It's really it's an interesting thing to see and I think we're very positive on Vegas outlook just generally.
That being said, if there is a completion of the sale process, it's independent of the dividend. I think the key thing for us is That we need to see a return to operations. We've had this discussion before on prior calls. We need to understand what the cash flow trajectory
of the business is, the growth
in that cash flow trajectory. You've heard Grant mention the completion of some of the Londoner milestones. That's a phenomenal product and we believe it will be very cash flow generative in the quarters and years As it addresses our most profitable and powerful segment of Macau. So the way we'll look at the dividend is evaluate our cash flow trajectory and the profile of business And then make an assessment about how to restart it and sort of what the trajectory of that dividend would look like. But we're very focused on the return of capital.
We think it's been fundamental to our shareholder return story. We think we have a growth component in our key markets. We have a growth component in new growth opportunities and new developments. And I think as part of that, we look very heavily towards the dividend as our cornerstone And of course, the share repurchases as well. So we're very focused getting on the other side of the pandemic.
Hopefully, we'll see some positive in the upcoming quarters. We have some green shoots in Macau. We have some positive results in Singapore and some positive results in Las Vegas here. And so I think over time, we'll have better visibility into the trajectory of the business they make an assessment over the timing and the size of the dividend.
I do want to jump. Carl, I just want to follow-up with Patrick, there's one other issue and that is the return Las Vegas. There's been recent commentary. It's been fun to read about how Las Vegas will never return to pre pandemic levels. The best days behind it.
I've heard all this before the last 20, 30 years about this town is right now on the back foot. There's no question about it struggling. But you can't help but think the missing, whether it's the vaccine or whatever it's going to take to fix this problem someday. I and we remain very bullish on the turn of Las Vegas. It may take long.
We want it to. It may take by the end of this year to see visitation spike. But Please don't be among those people who have these ideas that this pandemic could put a hole in Las Vegas and just the opposite. The demand will be there. This is a unique town.
We can have all the digital products out there you want, people want the visitation and this time is locked off. So we remain very bullish on the return post pandemic.
Yes, for sure, Rob. And thank you for that. And obviously, I'm sure a lot of us on this call are looking forward to making our next trip out there. I know I am. So Thank
you guys. I look forward to having you. Looking forward to having you.
Next question, we have Thomas Allen from Morgan Stanley. Your line is open.
Hey, and let me also send my condolences to you and the entire LVAD and Allison Right. Mr. Allison was a true visionary and his successes will never be forgotten. So thank you.
Thank you. Thank you for coming.
So there have been a number of reports in the media over the past few weeks months about you looking to Sports and Online Gaming opportunities. Can you just discuss your strategy there in a bit more detail?
Sure. We're looking at a few opportunities, a multitude of and opportunities in both regional and the U. S. And yes, we looked at digital and it's interesting, you can't deny that what's happened in digital is quite a space and We are exploring opportunities looking what might be out there, but let me put a caveat there is nothing to report today. There is nothing concrete.
We're simply looking, learning, observing. And just there's been some commentary that it's my suggestion. I want to assure you that Sheldon, this is another extraordinary average of Sheldon who he was ethically. He understood digital maybe too well before I did And he believes in it. He just simply had this outsized ethical concern about people couldn't afford it or people that were too young to use it.
And he wasn't a believer in the technology could stop that. He never questioned the viability of it. He questioned the ability to police it properly. And so The same way you paid people 100 of 1,000,000 of dollars last year because he wanted to. It's an ethical consideration for Sheldon.
So we've had this discussion prior to his passing and we are going to explore it. And again, the caveat is we are in the making money business. So there's a way to make money. It's intelligent and prudent. And again, Sheldon would be in the room saying, I'm laser focused on returns and growth.
As you know, his domain was G for growth. Europe, obviously, whether it be in the U. S. Or abroad to build more things and we're not leaving the U. S.
Where We want to build, we've been all over the paper looking at different markets. So yes, digital is in the multitude of considerations. We are learning and observing and talking to people. We are nowhere near a decision on that and we will keep you apprised if something changes.
Thanks, Rob. And then just talking about U. S. Developments on the brick and mortar front, there's been some chatter about New York and Texas. What do you think the chances are of those states?
And then how would you expect to how would you like to be positioned in those markets?
Well, when you look at New York for I think about 100 years, it seems like, we're not even secret that we're big believers in New York. We think it's extraordinary, the density of population, the ethnicity. Like it's a very good opportunity for anybody. And you can see, I think it's almost It's close to $2,000,000 right now just in the facilities are there without table games or decent rooms and we really have very good product. A good product there would be So we're definitely in the hunt.
We've been pushing it for again for 4 or 5 years. We're excited by what came out of the New York The group last week in terms of what they are considering. There's an RFI out there. So we're deep and hunt and looking seriously in New York on a whole bunch of levels. And It's still a long way to go before you understand where they want to build and what they want to build, but we are going to be bidders.
If it's real And it's done properly. We think the returns could be Sheldon like. Okay. So that's interesting. Texas is obviously extraordinary market.
We're Kicking the tires down there too and another extraordinary market. You can't deny the power of Texas, the size and scale. And I was there last week and it was a fascinating couple of days. And Again, we're having conversations. We're looking, kicking the tires and we'll advise you when something emerges from Texas.
It would be a great casino market The land based store, whatever, it could be a huge opportunity. So these are opportunities that we with our balance sheet, our strength, We would jump on both feet if we're the right structure.
Thank you.
Next question, we have Robin Farley from UBS. Your line is open.
Great. Thanks Very much and just echoing everyone else's thoughts about how sad it is to have this call without Sheldon.
Thank you, Adam.
Just a follow-up question related to the sale of the LVF assets, the Vegas assets. I mean, not specifically to dividend. But just kind of how much of a priority it is? Is it were you just kind of answering an incoming call? Or is it something where you see There may be some strategic reason why you would sell those assets, I guess.
Thanks.
Patrick?
So I think from our standpoint, we are very returns focused. So as Rob just mentioned, we're always looking at new opportunities And always looking at our portfolio to see how we maximize shareholder returns. And so as an entrepreneurial company, We're always active. So I think we should just look at this as if there's a way to maximize shareholder returns, we're going to do And we constantly look at the assets that we have in our portfolio. We look at new growth opportunities, as Rob just mentioned, And we talk about them.
This is something our team is very focused on. So that's really how we think about it.
I guess if I could push a little more. I mean, I guess what kind of appetite did Sands. You sort of publicly confirmed it, which maybe would invite some interest, because appetite and you mentioned and being returns focused, but almost anything that you would be interested in New York or Texas or other places would be kind of project specific financing, right? So it wouldn't necessarily you don't need the capital to free up to sort of put it to use in any other market. So I guess just trying to think about What kind of in this environment, what kind of appetite you think there may be for the assets?
Thanks.
So I think there's a couple of different questions there. So first off, I think The way we think about our portfolio is we sort of evaluate projects on a case by case basis. So Las Vegas is a standalone entity. We've operated it for a long time. We think it's a great asset.
We think it has a great future. So obviously, we're focused on operating at this point. I think the in terms of if we have additional capital to deploy, as you know, we have an expansion opportunity in Singapore that we're very focused on. And we think Singapore is just a very special market. It's privileged the fact that we're there.
We love Singapore and think the future for Singapore is very strong, Both as a leisure and business tourism market and we're happy to have helped the government there support its goals and continue to invest there. So we have capital that we could deploy there in the near term. I think in terms of other opportunities, you hear some of the things that Rob is talking about. We also have return of capital consideration. So for us, Capital allocation is front and center.
We have these discussions with the management team and the Board all the time. So it's something where we'll look at our opportunities, look for a way to maximize shareholder and We have assets where we think our returns are increased by transacting, we'll transact. And otherwise, we'll look to the sort of historical Actions that we've taken in order to enhance returns. In the near term, it's also helpful to have additional liquidity, right? So I I think from our standpoint, as the pandemic recovers, it's nice to have additional liquidity on the balance sheet, which is the reason why we're running the amount of liquidity that we have today.
We want to make sure that We have the opportunity to do whatever we need to do during this sort of unprecedented time. So I think from that standpoint, that's kind of how we think about things. I hope this answers your question.
Robin, just to piggyback on Patrick, one thought and that is obviously we have a very strong balance sheet whether we sell Las Vegas or not. But we also have, I believe, the next couple of years, as you know, 2018, you did about $5,500,000,000 of EBITDA. I know these miserable years '20 and perhaps even 'twenty one make that seem like a distant memory, but we think it comes back and comes back strong. And also I believe when Macao makes a decision, There's going to be a requirement to invest more in Macau, which as you know how Sheldon felt, well, I can't wait to invest on $5,000,000,000 $10,000,000,000 That's a very, in my opinion, When the Macanese government makes its decision, I think it will be contingent upon a rather substantial capital investment, which we Know exactly what Charles was doing, that was with both hands. And that's maybe something else you think about.
There's just no place like Macau. I think Grant And we'll forgive you a sense of London and Four Seasons. I hope we can all be there this year to see what that team has achieved, but we're not done in Macau. We can be there for many more years. And when all this gets away, it goes away probably later this year, Nick, whenever, I don't know, I'm not going to predict because I've been wrong I won't be wrong again because I won't make a bet.
But I bet one thing will happen is that our Cow Government is going to necessitate that licensees Make investments in Macau and we want to be there to be ready. Patrick referenced Singapore. And these are not small investments, they're in the 1,000,000,000 of dollars. So I think we have to be prepared For outsized investments in our best markets, which are Macallan Singapore for crazy growth. And then there's the other possibilities in the U.
S. We referenced. So As strong as we are, if we get stronger, we will.
Okay, great. Thank you very much. Thanks.
Next question, we have Stephen Grambling from Goldman Sachs. Your line is open.
Thanks for the question and condolences to everyone on the line.
Thanks, Steve. My first question is on Singapore. Absolutely.
My first question is on Singapore, which has continued to be remarkably resilient. What are you learning from the recent and about serving domestic crowd that might inform your renovation plans. And does this make you more confident of potential ROI on these investments? Will that ultimately require full recovery in China consumers?
Well, first thing is we found out that Singapore is remarkably resilient. You're right. And the slot business there is actually not quite at pre pandemic levels, but it's getting close. So we've learned that there's a local market, but more important than the local market, Frankly, are the outsized contributions of foreigners who are residing during the pandemic or full time in Singapore. We have a lot of Strong play inside the country from wealthy people that want to gamble and that's a very positive sign.
You saw the numbers. If we can run even though it's not The $1,700,000,000 we used to be at, not north of $2,000,000 $3,000,000 or $4,000,000 like to be at. It's still a run rate of $500,000,000 plus in the most Dramatic times. All it does to me is reinforce just how damn powerful Singapore, how wonderful the asset and frankly, how wonderful the government is to work with there in terms of They're still willing to talk and work with us and we're hoping to get actually over there in March to continue our discussion how to get Phase 2 going. But it reinforces the enormous size and scale of that market and to think about having no farm visitation yet make that kind of money and perhaps even more, It's very encouraging.
On the flip side, it also makes you realize how important the airlift is an island. It's hampered by the fact unlike Macau, which could open the doors up If the government so chosen to last the visitation requirements, in Singapore, the government is eager to open the doors, but it necessitates airlift, Which means counterparty trading with other governments or airlines. So we don't see it coming back in the short term. I think it stays in this $150,000,000 quarter or so level. And so there's no real growth opportunity, I think, to see it until this airlift issue is resolved.
But it certainly makes us Very much want to invest in Singapore. It's a great place to do business. It's a great market. Obviously, we need the return of all consumers, foreign and enhance it, but we want to invest money in San Bernardino, we sure do. We sure want to get our product better.
We have a lot of work to do in the building right now. We're actually Embarking an ambitious reinvestment program in the current asset to bring us to a better standard. And then we want to build our second phase as soon as we can resolve everything. So we are just like Macau, we're lucky to be there. And the idea we did we can do $5 plus 1,000,000,000 post pandemic is pretty encouraging, Can be more we think it can be a lot more.
Yes.
And maybe a follow-up on digital and AI gaming, and I realize it's Still early and you said you've been studying the industry, but are there any initial thoughts on what you think the company can bring to the table different than the existing players?
I have very strong thoughts about it, but I don't want to talk about them at this time. I want to keep working towards our goals, which is to understand it fully, Complete the conversation and frankly the tutorial we're undertaking to really understand how to get there. It's a very interesting business. As you know, It doesn't make a lot of money, but it sure has great valuation. The question is, can we bring up something to the table to make a lot of money?
And we're working through it and we're Exploring, that's what I can tell you. We have something concrete to say to you, we'll certainly call you. But right now, it's simply Exploratory, the same way we explore a lot of things all the time. You saw Thailand, I think someone came out about the possibility Of an opportunity for Iron Thailand, which point that as well. So everything is up for grabs.
I think we look at our company, The balance sheet enables us to have a very curious appetite to grow. And again, we're going to adhere to The founders, Gary Grothe Adelson, he believed in it and we're certainly going to hear that. And I think you'll hear some things from us, hopefully next 12 months that will make you believe in that idea. Sounds great. Thanks so much.
Thank you.
Next question, we have Shaun Kelley of Bank of America. Your line is open.
Hi, good afternoon, everyone. I also want to offer my condolences to you, Rob, Patrick, to the whole Adelson and Las Vegas Sands families.
Thank you. Appreciate it, Sean. Thank you very much.
So I guess I'd like to maybe turn back to Macau for a quick minute if we could. I think Grant's comment to start off with a little sobering about sort of expectations of when we can start thinking about A recovery relative to kind of what's going on with the pandemic in China. And if we step back for a second, maybe it's a little harder us over here sometimes to monitor exactly the nuances of some of the vaccine developments. But one thing that's increasingly separating The U. S.
Recovery narrative from overseas is probably that to some degree. So I'm wondering if we could get a little bit of a thought around maybe some of the vaccination programs and what the and Expectations are around that for within Macau, broader thoughts on the local area there, possibly Hong Kong, and And then how that could branch out to China in terms of is that what we may need to really see a more concrete reopening for this entire market at this stage.
Is this over here to Chumstaw Lake?
Yes. Okay. Yes, I think Sean, firstly, we have to stand back and look at the domestic Chinese economy During the course of especially the second half of twenty twenty. So it is different from the Western economies. Largely, the domestic economy was recovering very strongly.
So this is without obviously Nation being applied to the whole population and that's obviously attributable to the fantastic control of the pandemic. So as you look into the Q4, you're getting the 6.5% GDP growth in domestic China without the vaccination. So that's a very, very strong outcome. And obviously the consumer is getting Stronger across the board. So I think we have to look at China in a slightly different way.
The strategy is and to basically 0 local cases. And whether that is achieved through vaccination, whether that is achieved through what they've already been doing. Clearly, there is a path either way to clearing the locations and localities from the virus and that will enable travel to resume more normally between Mainland China and Macau. So I think that's the first and most important point. In terms of the vaccine Same strategy.
Locally, you've seen comments from the local governments of both SARs, both Hong Hong and Macau, both have a strategy to procure a number of different vaccines, actually 3 from 3 different providers and both cities are looking to procure the 1st batch during the Q1 as We understand. So the local populations in the SARs will also We'll be looking at a vaccination program in the months ahead. But really the most important thing is still controlling The pandemic in terms of the local cases inside China itself. And if Macau then can be Part of the domestic travel bubble in a bigger way, in an easier way, in a more fluid way And has been the case up to now, then obviously the tourism and the consumption spend will come back Very strongly. And there has been progress.
I think it's obviously it's from a low base, but there has been progress. There There has been a gradual easing up of the logistics and the getting used to some of the guidelines throughout the course of the Q4. But again, the central point is, as the worldwide pandemic got worse In the winter months, there are more important cases that leads to more isolated outbreaks in some of the provinces In China, then obviously that puts pressure on restrictions again and the travel advisories that are issued by Various different local governments and entities, especially prior to Chinese New Year, which is, as you know, a huge period of huge migration of the population and travel. So that obviously rightly gives Some consideration from the perspective of the authorities that we need to be very careful at this stage, which is very delicate. So Again, another important point is as the pandemic, obviously, if it subsides in the rest of the world as well, then that important risk reduces and that obviously relieves the pressure inside China as well, which hopefully Is another factor that would lead to normalization of the travel between Macau and Mainland China.
That's helpful, Grant. And then maybe just as a further follow-up, this is probably maybe more for Wilfred, if he's But last quarter, there was a little bit of commentary about the overseas gambling law. And I think we're approaching A little bit more or a closer kind of point of probably both where that where we know more things about that law and also its implementation, which I believe is set for March 1. So just wondering, do we know anything more about that today than we knew before? Any changes or additions to that that we should be aware of?
Yes. Actually, the amendment to Article 303 of the criminal law has been enacted. It was enacted about 2 weeks ago. And as you appreciate this law, this amendment deals with people organizing, gambling, running casinos and particularly organizing citizens of China to go outside of the country to participate in gambling. Now there were the enacted version made two changes of the previous draft.
First, The definition of the criminal actor, which they tried to come up with a definition was removed. So they just use a catch all phrase of whoever organizes. So this is to avoid people arguing who falls into the net. The second change appears to be a bit positive, But it's still ambiguous for Macau is that in the legislation, they Typically, say, outside of the country, which as you all appreciate, Hong Kong, Macau and Taiwan is generally considered within the country. But then they leave an Ambiguity there by putting the word offshore inside the bracket after outside the country.
Now this introduces the ambiguity and I was discussing this with both our lawyers in Beijing and the local MPC, National People's Congress, people attending session. And they said that while the Central People's Government recognizes the special status of Macau, They do not want Macau to be exploited as a base for organizing such activities to take people outside of the country, such as the Southeast Asian countries. And as we all know, The Ministry of Tourism has compiled and is compiling a blacklist of countries to which they are known to be accommodating gambling from Chinese citizen. So To us there is certain ambiguity which will ultimately be decided by the authorities and the courts going forward. But at this stage, it is for sure that any person or a junket trying to use Macau as a base to organize gambling to other countries would be condemned.
Thank you for that.
And the last question. For the last question, we have David Katz from Jefferies. Your line is open.
Hi. My condolences as well. And the best Part of this job is always the truly extraordinary people we get to meet and that he was certainly a treasure and fun for sure.
That's so true. People the one thing I miss is Sheldon is the humor. Everyone talks about anything else,
but he was he loved to laugh and have
a good time and even seeing him say, I miss that humor. What's your question, David? Thank you for your comments.
Look, I think one of the slides in your deck, it suggests implies that some of the rolling volume that's gone away has been recaptured within mass as premium mass. Among all of the unknowables You know that you've done your best to address. Are you able to look into what you have in the premium mass and Measure how much of that is recapture potential VIP dollars? And What is your best guess about if you were sitting down to model 1 to 4 years out, how you would think about modeling VIP just given where we sit today. And that's it.
Thank you.
Rand?
Yes. Yes. Thanks for the question, David. I think structurally, and this is not to do with the pandemic, structurally we've seen The power and the growth of the premium mass over the last several years and that trend It's going to continue, whether it's pre pandemic, during and after. And the reality of that It's because the players, the customers, they want to deal directly with the owners of operators of these great assets and obviously the great lifestyle destination and that we provide the multitude of amenities and the services that we're able to offer is Very, very appealing.
So I think that will continue. Your reference to is there a transfer From one segment to another, I think structurally there has been over the last several years anyway and that's one of the brilliant things about Sheldon's integrated resort model is that we can offer everything from the entertainment to the retail to The food and beverage, to the spas, all of these non gaming lifestyle amenities. So that trend is structural and that's why we strategically Invested in products that serve this segment. In terms of specifically what's happening now, The situation is you referenced is more related to issues Specific to the system in the junket segment and that has Stabilized at low levels of volumes. And obviously as a result of some of those issues, You may see that as new demand resurfaces and resumes in the coming years that That new demand is captured directly by the operators rather than through intermediaries.
That also is true. But I think the overarching trend was there before anyway and would have continued In that manner, it's just that what's happened in the last 12 months may somewhat accelerate that trend, but it was going to be a big structural trend and driver for years to come anyway.
Perfect. Thank you very much.
Thank you, ladies.
Ladies and gentlemen, That's all the time that we have for today. Thank you all for participating. You may now disconnect.