Good afternoon. My name is Nicole, and I will be your conference operator today. At this time, I would like to welcome everyone to the Las Vegas Sands Third Quarter 2019 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, and thank you for joining us on the call today. With me on the call today are Sheldon Adelson, our Chairman and Chief Executive Officer Rob Goldstein, our President and Chief Operating Officer and Patrick Dumont, our Executive Vice President and Chief Financial Officer. Before I turn the call over to Mr. Adelson, please let me remind you that today's conference call will contain forward looking statements that we are making under the Safe Harbor 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 to 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. We may refer to those slides during the Q and A portion of the call. Finally, for those who would like to participate in the question and answer session, we ask that you please respect our request to limit yourself to one question and one follow-up question, 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 Mr. Adelson.
Thank you, Dan, and good afternoon, everyone. As you all know, I've missed our earnings conference call these last few quarters. So let me begin by saying I feel good. I'm very happy to be here with Rob, Patrick and the team and I look forward to our discussion today. Let me also say that I am extremely touched by all the calls and emails I've received over the past several months.
It has been remarkable to hear from so many people, including many of you joining us today. I deeply appreciate the well wishes and everyone who took the time to reach out to me. It certainly means a lot. With that, let me tell you about our strong financial results and our unique strategic position. Our company is today as strong as it has ever been.
Our balance sheet is robust as evidenced by our investment grade credit ratings at both Las Vegas Sands and Sands China. I want to point out to you that S and P included us in the S and P 500 as of October 3. So we've been part of the S and P 500. About 3 weeks? For about 3 weeks.
Okay. Where are we? Our cash flow generation is unmatched in our industry with annualized adjusted property EBITDA of over US5 $1,000,000,000 dollars Good thing it's not Fibnex. Our development pipeline in both Macau and Singapore is exceptionally exciting with over US5 $1,000,000,000 of capital projects coming to fruition in Asia over the course of the next few years. These investments will further strengthen our leading position in the premium mass, mass, entertainment and other non gaming segments in Asia.
At the same time, we will continue to enthusiastically pursue the right development opportunity in Japan. Now let's turn to our financial results. We had another strong quarter across all of our markets. Companywide adjusted property EBITDA was US1.28 billion dollars In Macau adjusted property EBITDA was $755,000,000 consistent with the prior year. While overall Macau gross gaming revenues declined for the quarter, the mass market continues to experience robust growth.
We grew our mass gaming revenues by 9% over the prior year with strong growth in both mass tables and slots and in both the premium mass and mass segments. Most importantly, our profitability continues to lead the industry with adjusted property EBITDA margin at 35.7 percent, up another 70 basis points compared to the prior year. We couldn't be more excited about our ongoing investment of US2.2 billion dollars to expand our critical mass of non gaming offerings in Macau. Various components of these projects are already underway and we look forward to giving you further updates in the coming months. We remain steadfast in our belief that Macau is the best market in the world with respect to the continued deployment of our capital.
We look forward to making additional investments in Macao as we contribute to Macao's diversification and evolution into ratios to Asia's leading leisure and business tourism destination. With the opening of the Hong Kong Zhai Macau Bridge and the ongoing development of innovative pay initiatives, we believe Macau has the potential to become the MICE Capital of Asia and we fully intend to contribute to that goal, both through our existing assets and future investments. In Singapore, adjusted property EBITDA was US435 $1,000,000 up 4% over the prior year. Rolling volumes were strong and were above the level of the prior year. That's win per day remains solid.
The hotel continues to enjoy near full occupancy and retail sales per square foot increased by 10%. Our Las Vegas operations had another good quarter with adjusted property EBITDA of US93 $1,000,000 an increase of 22% over the prior year. Finally, we continue to increase the return of capital to shareholders. The Las Vegas Sands Board of Directors just approved an increase in our annual dividend for the calendar year 2020 to $3.16 per share or $0.79 per share per quarter. Yay dividends.
I guess you missed me. Thanks again for joining us on the call today. It's really great to be back. Now let's take questions.
The first question comes from the line of Carlo Santarelli with Deutsche Bank.
Hey, guys. Thank you. And Mr. Adelson, welcome back. Maybe this question is best for Rob.
Just in terms of obviously what you guys saw in the 3Q, it looked like you saw some strength in both the core mass segment or base mass segment as well as a little bit of a pivot in the premium mass segment, which also grew fairly well. Just wondering if there's any dynamics that you're seeing that are changing as obviously VIP remained a challenge throughout the 3Q and I guess it was a little bit surprising to see the premium mass perform the way that it did.
Yes, nice surprise. So as you know, I mean Macao is the world's largest gaming market and the current future growth of that market is predicated on the mass market. If you look at Page 16, the deck, you can see the continual year after year growth of this segment. And this is the segment that matters, let's be honest. And we are the market leader in those segments, mass, premium mass and slots.
And that segment depends on rooms and suites and gaming capacity. Even though we lead the market in rooms and suites, the completion of the Four Seasons London will put us in a more favorable position than ever. Its quality, its quantity and will enable us to dominate this critical segment for years ahead. And you couple that with our retail entertainment product, our competitive position is kind of hard to beat and we're very fortunate. As you referenced, our rolling segment results were softer, but this segment represents less than 10%, I think Dan said 7% or 8% of our cumulative EBITDA composite.
The other 90% plus is reliant on the mass segment. And to your comment that mass went into the quarter reached 1 point $6,000,000,000 base mass was at $762,000,000 I think that was an all time high. Our premium mass grew to $674,000,000 which is 16,000 plus per table and the slots went to $160,000,000 per quarter. With our future and the future Macao is mass and visitation continues to improve. The quarter for us was very, very positive except for the softness in the rolling segment.
But our game plan, as you know, we said quarter after quarter, year after year, our game plan remains the same. It's more product. We're spending $2 plus 1,000,000,000 of London or Four Seasons, quality product, the quality we're doing at Four Seasons London will surprise everybody, it surprised us actually, it's pretty spectacular. And so we don't see a whole lot of change in this quarter. It's business as usual.
It's reinvest in the product, focus on the high margin mass business, grow our fundamental advantage, which is more retail, more restaurants, more entertainment and most importantly, more lodging. So no real surprises. We're very pleased with the results, especially as you referenced the comeback of our premium mass segment in particular.
Great. Thank you, Robin. Just a quick follow-up on the conversion right now. And obviously, the VIP volumes and lower hold there is kind of making it harder to see straightforward in the results. But when you think about the work that you're doing currently and kind of where you are in the transition, how much disruption do you think is net leaving the system?
I know it's probably not easy to handicap, but I'm sure you're capturing some of the disruption at your other properties. Do you feel like there's leakage outside of the system from some of the work that you guys are doing there?
I think there's going to be disruption, but your reference point is spot on. I think we can capture, if the team does their job, capture some of that disruption over the region and Four Seasons and Venetian. I'd like to think we can. Having said that, it's a massive project underway. I mean '20 will be a disruptive year at SCC.
There's no denying it. We're transforming a 10 year old product into something much more desirable for the market. So there will be some disruption. I'm hoping the team and they claim they can do it, we'll move most of that business over to Four Seasons, Parisian, other products. Obviously, we can do it because we've got the room capacity, the lodging capacity, the gaming capacity.
And frankly, we also have the ability to direct people who come for the entertainment product. It's a big positive. As you know, that's a unique differentiator for us over there. So hopefully, when the premium masks come to town, almost every week, we've got a terrific show in there, they can push that customer away from SCC if they so desire. But I think as we've said repeatedly, the end result is well worth it.
We're building at Londoner. We can't wait to show it to you. We can't wait to finish it. And the same thing with the room product we saw it a few months ago at the Four Seasons. It's exemplary in every way.
Only time will tell, we can't quantify level of disruption. Yes, disruption, how much we lay off in other properties, time will tell.
Great. Thank you very much.
Thanks. The next question is from the line of Thomas Allen with Morgan Stanley.
Thank you. And echoing Cara's words, hoping you had a speedy recovery, Mr. Adelson. So just around sticking with Macau, does it feel like the market is getting impacted by the Hong Kong unrest and do you feel like your properties are feeling it? Thank
you. In the CALs unit, Thomas, it's the mass segment that drives growth is that simple. In this challenging macro environment, we just continue to grow and grow. And that business revolves around lodging, retail entertainment. And we continue, as you see the numbers, to grow in all these areas.
The mask keeps growing premium even with our large base, our slots and premium mass kept growing. With our CapEx position, it just gets better and better. I also think with our 1300 new suites, London and Four Seasons, it just will get better in the next 18 months for us, especially for family travel, length of stay, a great non gaming product. One thing we should reference is to the base mass, the continued improvement in transportation infrastructure, connecting the cab will drive growth in visitation. And we can capture a large share of that growth having iconic destinations in our theme resorts like Londoner, Venetian, etcetera.
So in this challenging environment, we are really pleased with our results and just see it getting better down the road.
Helpful. Thank you. And then 2 more specific questions. It seemed like convention retail and other revenue or your profit was down a lot, what was driving that? And the second question is just, I noticed you've been mix shifting your Macau tables away from base mass to premium mass.
Could you just talk I mean, recognizing that premium mass revenue was stronger this quarter, it has been more choppy. So just wanted to hear the rationale behind that. Thank you.
So on this, the shift, I think what I heard you say is the shifting from base mass premium, I hope we are, hope we can.
Yes.
Obviously, that's our goal. Our goal always is to get as many premium mass customers in there and move away from base as we can, but that's a challenge when you have so many tables. Very, very pleased with how that's happening and you saw the results in the number we came up with for the 3rd and last quarter, nice recovery from Q2. We had bounced the wrong way. I just think our structural advantages there are so damn strong, it's hard to refute where we're going.
I don't think anybody can argue with all our keys not just having quantity but quality, all the entertainment, the retail as you saw numbers, I think it's on Page 27, we referenced the retail numbers. It just our advantages here are good and they'll just get better with time. Your reference to One thing, you mentioned the convention and other, one thing to note is that is also where we have ferry revenue. And so there's
been a decline in ferry revenue year over year. So that's what's driving The majority of that is related to ferries. Okay? Makes sense. Thank you.
Just a follow-up on that slide, as you referenced, the growth from 434 to 4 50, which is accompanied by an increase to $674,000,000 total win and $16,200,000 per table. Yes, it's a good trend in the right direction. I hope we continue that way. I love to end up with a double premium mass tables if we have the demand to make it happen.
Thank you. Thanks very much. Appreciate it.
Your next question from the line of Stephen Grambling with Goldman Sachs.
Thanks. Could you all talk to the decision to walk away or I should say redirect your focus from Osaka to other markets in Japan? And then maybe just talk to any other markets that you do have your eyes on for development?
Sure. We looked at Osaka and we're very we think it's a wonderful market, a wonderful city. We had a great experience there. But in the end, we felt our strengths and our what we do for a living so well is better represented in the opportunity in the Tokyo Bay region in Yokohama. And as you know, it's very competitive there.
It's a very interesting market, a lot of capital acquired, a lot of thought process to make sure the numbers work. And we just thought Yocom was just a better fit for our skill set. We are hard at work. The government has issued the RFC. We are hard at work at that right now.
And we'll see how it comes out. It's I think there's some time to ponder how Japan plays out in the end and we hope you're right in the middle of it and make the best decision for the our company, our shareholders.
And can you just remind us of how to think about the amount of leverage that you'd be willing to kind of flex to, should you pursue that? And if you don't, it still seems like you're running, I think you're at 1.5%. Where could that move as you start to pursue the other development opportunities and where do you think about the right level longer term?
So I think this goes back to the original fundamental story of the company. One thing our Chairman has been expert at and the company has been very strongly supported by is allocation of capital. And so if you look at the developments that our Chairman has pursued, they've always been large scale with very high returns. And so that underpins any decision we make about any new potential new jurisdiction. Conveniently, it also works hand in glove with our ability to return capital to shareholders over time as our CapEx rolls off.
So this is the framework that we use when we look at any jurisdiction. So to think about it in terms of leverage, as the Chairman mentioned in his opening remarks, we have an investment grade balance sheet and that's been a work in progress over many years. So we're very proud to achieve the levels of leverage that we have today. The proof of financial management that we've exhibited has produced results and gives us a lot of flexibility to pursue really any jurisdiction that comes available. From that standpoint, right now, if you go to page 8 in the deck, you can kind of see a snapshot of where our leverage is.
A total consolidated basis, we're 2.3 times. On a net basis, it's 1.5 times. So it really depends on the timing of cash flows. We've built some developments recently, the Parisian, you can kind of see the development schedule there. We laid out in our last quarter's presentation how we would handle Marina Bay Sands expansion.
That kind of gives you a sense of how we would look to spend capital as we create a new development. But as a practical matter, given some of the growth that we anticipate from the CapEx that we hope to spend over the next 3 years, we hope to maintain leverage levels in our current context. I think particularly when you give credit for pro form a EBITDA as the developments get closer to fruition. So when you look at what we're doing really, this is a transformational story of our company. This is the second leg of a very large investment We're expanding in our 2 best markets.
We're deploying 1,000,000,000 of dollars of capital into Singapore, deploying 1,000,000,000 of dollars of capital currently into Macau and opening probably our most competitive and best prepared products. So we're very excited over the next couple of years and hopefully that will provide an additional natural deleveraging and facilitate additional capital
return. One very quick kind of quantitative follow-up. Can you just remind me what was the total room count year over year, I guess in Macau? We're trying to back into it, it seems like it's down, but I don't know if you have that number handy.
So if you go to Page 61 in our deck, I realize it's way in the back.
We're getting there.
We actually lay out all the hotel rooms, including new capacity, which we've highlighted. All right. Great.
Thanks so much. I'll jump back in
Your next question comes from the line of Joe Greff with JPMorgan.
Good afternoon, everybody. Sheldon, good to hear your voice and you sound 100% versus the last call. So
glad you're
on.
Just, Rob, or for anyone there in the room, if I'm doing my math right, it looks like in the count of 3Q, your math table hold percentage was a little bit higher than where it's been or where we would maybe deem it to be at a normalized level. Are we looking at that right? And was there anything with table hold on the mass side? And obviously that maybe is why premium mass grew at the higher rate that it did and maybe you can kind of help us understand, maybe what was going on there, whether it's mix or changing some of the Thai bets or something else?
Well, there's been a lot of talk about Lucky 6 in the market. You guys have written about it. I think there's starting to have some impact in the Macao market or even Singapore. We're a touch above, Joe. Q2, it's not material.
And we're actually a couple a few points above in terms of the Q3. It's not material. I wouldn't consider it important. Again, in our business, 0.5. Or 0.25.
With all this volume is it's not relevant. I do think as you know, baccarat like all of our businesses in the mathematical equation as the customers opt to play different proposition bets, be it lucky 6 pairs, ties, whatever, it plays the house advantage. And I do think you're seeing baccarat changing the baccarat I started with a long time ago. It's evolving to a different place and it's helpful the industry as these different bets evolve. As you know, the flatbeds or the bank player is not as advantageous to house as Pairs and Thais and now Lucky 6.
So hopefully we'll see it trend up to 25%, 26%, 32%, 67%. But the truth of the matter is we're delighted to see the volume of play we've got, the whole percentage wasn't material, but I think it isn't until keep your eye on what's happening in the baccarat business since that is the predominant game and the game's diversification to more proposition bets is very healthy for the house, not such as our house. It just so happens we have more house than anybody else over there. So the benefits flow to us. But as far as it being materially different from the quarter before, it's not it's pretty much the same range.
Great. And then switching over to Singapore as my follow-up. Rob, do you think you're getting a lot of business from China going to Marina Bay Sands that otherwise for whatever reason right now might be hesitant to go to Macau?
No, I don't think that's an issue at all. I think the customers we've gotten to Singapore, it's foreign based as you know. Our growth proposition is interesting as we look at that business in Singapore. We built that when Sheldon really developed that 13, 14 years ago, we sat in this room and penciled that. And one thing we did, we couldn't have seen the dynamic growth, Joe, in the premium mass, super premium mass that comes from all over the rim.
And so we built a typical very nice hotel, but with lots of suites for high rollers or rolling customers and lots of could has really changed the dynamic. And that miss on our part, which we couldn't have seen it, we just were blind to it, it didn't exist. But that's why we're doing number 4 to make that tower really target specific high level focus on the premium mass customer that we don't get enough of and that's where the growth option resides in Singapore. The other piece I think we had the Singapore discussion, this arena we're building people don't quite understand the importance of that arena in Macau is breathtaking. When you look at our business week after week, month after month, we just can't get enough arena business there because the casino wants it so badly.
It drives customers' decisions when to come, where to stay. It's a ridiculous advantage that we don't have in Singapore and that will correct that in few couple of years when we opened 4. But I think Singapore, it's not about more business coming from China or less. It's about that property to achieve its total potential, taking the CapEx dollars we're going to deploy and being laser focused on the segments that drive it. And that's the miss in Singapore in terms of we make a lot of money there, we're very proud of the operation, but there's so much more growth opportunity when we get the suites and rooms right, the entertainment right.
It's going to be I think it's going to surprise people how much upside there is in Singapore, very desirable place to visit, very safe, very user friendly, enormous retail. Our mall just continues to we were there last month, it's shocking how good it looks and feels, our new nightclub business there. I just think we just have a lot of growth potential in Singapore and it's going to be the entire room. Wealthy people, affluent people who want an exceptional resort experience will come to Singapore. Great.
Thank you. Thanks, Joe. Thanks, Joe. Thanks, Joe.
Thanks, Joe, Chris.
Your next question comes from the line of Felicia Hendrix with Barclays. Hi, there. Good afternoon and welcome back, Sheldon. It's super nice to hear you there and comforting as well.
Super nice to hear me too.
Always good evening, Felicia.
Thank you.
I haven't said Yay dividends for a long time. It
was nice to hear. So just switching gears to Vegas, acknowledging it's not a big part of your business in the chart in the deck, it showed that your table drop was down year over year in kind of both of the segments. And for the market, we know that baccarat drop was down quarter to date through August, but mass drop was flat. So just wondering on the mass side, was September down in the market or is that due just more to the types of conventions or groups you had in your casino? And I think in the past you've discussed about trying to improve that mix, so wondering where you are in the process?
I don't have a specific answer for September, but I will tell you that we are focusing on getting more of this mass and I'll call it premium mass business in our building. Again, with 7,000 plus accommodations, we should be getting more of it. We're looking we obviously keep focusing on the room product, the suite product, more attractions, more F and D. I'm very pleased with where our casino is going. We've seen nice baccarat play throughout the year.
It was a soft quarter, you're right, relative to the previous. But the mass and premium mass growth opportunities are here. But I think as you know and you referenced earlier, Felicia, it's a lodging dominant market and will continue to be. Vegas is more from when I started in Vegas, it was gaming centric, now it's lodging centric. And the guy sitting next to me had a lot to do with that, but I think the best days in Las Vegas are ahead of us in terms of as more nice space comes to the market, as more things happen here, we welcome the competition, welcome all the wonderful things happening all over the town.
And so we're not going to I don't think you can focus on Vegas gaming for a quarter, for a week or for a month and get too excited either way. It's going to be a steady grind to a better place. We're not going to see I don't think you'll see as much Asian play in Las Vegas as you've seen in the past because the options in Asia are so damn good that it's hard to we still see great players show up occasionally, but the days of us dominating Asian play, I think is over. And the days of Vegas becoming probably the greatest lodging market in the world are here. We want to be part of that transitional shift since Sheldon authored 20 years ago with the convention based focus.
That's where I put my attention when I was looking at Las Vegas.
That makes sense. Thanks. And just switching gears to Japan, just I think conventional wisdom is that the integrated resort there would cost about $10,000,000,000 So I was just wondering if we could get a reality check on that. Yes, I
like to, you're right. It's a big number. Yes.
It might be light.
It might be light too. It might be light.
Well, that's what that's kind
of what I'm wondering. Is there any way to kind of It's
too hard. Patrick and I spend way too much time in Japan in the last 6 months. I feel like I could write a guidebook. And I'll say this about it, it's extraordinary place. We really enjoyed going there.
But to your point, sometimes I come back on the plane to pinch myself. I think back to the days when we developed The Venetian with Sheldon in Las Vegas 20 plus years ago, and I remember saying to myself, my God, I'm part of a $1,000,000,000 development. And it seems kind of comical thinking back on it today that you can build a nightclub pay for $200,000,000 in this town. So the reference point that you make is very, very well thought out, dollars 10,000,000,000 $12,000,000,000 it does give you pause and no matter I once came back from a trip and I said, Sheldon, we were having coffee, I said, think about it, you could spend the equivalent of what Sheldon has spent in China for many casinos and retail malls, you spend that in 1 building, 1 IR in Japan. No matter how good you are at this business, that must give you pause and stop and think is that prudent?
Can you really deploy? Can you get the return? And we've had those discussions and we've had them with the Japanese government. And so our Chairman and our Board will make that decision ultimately. But we and Patrick and I, we've learned a lot, but that's a very fair question to ask of any operator, not just us.
You know we have the balance sheet and the capability and the skill set to do it. The question is, can we get a return that the guy on my left is going to endorse and his Board. And we're working through those issues right now. I think $10,000,000,000 is the starting point. I don't think anybody can do it for less than $10,000,000 unless you're going to do something subpar.
So it's
a fair question to ask. Just to be clear, the $10,000,000,000 is likely the prime city locations that are being discussed. Yes. Right. There may be other locations in smaller cities besides the main cities of Japan where the investment entry costs would be lower.
But we're not in that business. We're not going to Hokkaido. We're not going to we're going to be the top tier city, which would mandate $10,000,000,000 and that may be light. I mean, the cost of building in Japan is a big issue. And the way the deal has been structured, it's a challenge.
And we're the guys who we spent $6,000,000,000 years ago and we spent $13,000,000 or $14,000,000 or $15,000,000 We were used to writing big checks, but all that money in 1 IR does make you stop and pinch yourself and say, can you get the returns that your shareholders deserve?
So it's kind of a Captain obvious follow-up to that. It seems like there could be a scenario where you guys just say, overall, we're not going to get the kind of returns and we'll let someone else participate in Japan.
We're not there yet. It's always fair. Anything we look at, we look at in the end, it's really Sheldon and the Board to make that decision. But everything we look at is predicated on return on invested capital. We have a great balance sheet.
The reason why we don't do things just to do them, we do them because they make great sense for the company. And I think Macau by the way, it's hard to beat the opportunities we face in Macau and Singapore. Those two growth opportunities we're spending 1,000,000,000 in both, but it's money that's so well spent. Our Macau results, I hope I can't wait for a couple of years now to see the results that we're doing Macau, both in the Londoner and the Four Seasons. I can't wait to see the result of all the infrastructure.
The government's doing there is exceptionally good for the market. It's been a great and very enjoyable watch Macau from a infrastructural development, the new trains coming through Grand Bay, the new all the infrastructure improvements there are really helpful to the market. And we have to tip our hat to the government for doing that. Same thing in Singapore, what we're building there with that theater and those new rooms is going to be a very, very good thing for this company in terms of invested capital returns. Japan will take a little more thought process.
We're certainly not writing off. We're deep into it and we'd like to be there. But to your point, we've got to make sure at the end of the day, it's prudent and it returns. Sheldon's always said 20. So it's got to be a big number to make it work.
Okay. Thank you.
Sure. Thanks, Alicia.
Your next question comes from the line of Shaun Kelley with Bank of America.
Hi, good afternoon everyone and pass along my best wishes to you Mr. Adelson as well. Just wanted to touch on a couple of things. One was just in the detail around the expansion that you're planning for the Cotai Strip. It looked like perhaps the timing or for the opening on the Four Seasons slipped a little bit.
I think we've heard plenty about construction challenges in the market there, but can you just give us an update on just general construction progress and timeline for some of the things that are scheduled to open? And any chance at 4 seasons or you do have some rooms available for Chinese New Year?
Sean, Dustin has referenced Page 19, ongoing strategic reinvestment. Page 19 gives you a great snapshot of our timing on this thing. You're right, we've had a little delay in some of the issues in Macao, but I think we're going to get to these timelines and we feel pretty confident that Four Seasons pretty much there's gaming happening as we speak today in the Four Seasons Macau. There is a new gaming foot. These are mind blowing suites relative to the market there today.
The Londoner again is under the rooms open about 150 open currently already. The gaming salons have not started nor the facade that will happen in 2020 into 2021. There's been some slippage due to the process there, but it's moving ahead. Will we have rooms open in the 4 seasons? Yes, we will by trainees and dealers have some rooms open, but fully completed probably unfortunately it will be Q2 of 'twenty.
My mom used to tell me all good things are worth waiting for. It will be worth waiting for it. It's going to be a game changer. Four Seasons is a whole new place, a whole new world. That will be the best product in Macau in terms of size and quality.
And I think London will be a very strong sister to The Venetian. So that page is very it says it all, tells you dates and times and answers all your questions.
Great. Thanks for the detail. And then, just as sort of a broader follow-up and I appreciate that VIP remains a smaller and smaller portion of the business. But Rob, could you just give us your kind of color or thoughts on specifically some of the we know about some of the challenges around maybe specific junkets and some of the kind of credit policies as it might relate to broader China. But your thoughts specifically on some of these frontier markets because we hear that come up from time to time in our conversations with investors as well about the Philippines and Cambodia and some of the competitive offerings there.
So just kind of what's your take from all the time you spend on the ground in the market?
Well, the numbers speak for themselves in the cow. It's been challenging there. And I think the government will deal with those issues in the Philippines, etcetera. It's not my area to comment on. I think whatever happens, you can read about like I do in terms of the Chinese government taking all that and we'll leave that to the government.
As far as Macau, we've been doing this a long time. We've watched that market ebb and flow and we're certainly in a difficult time period. I'd like to say it always resurrects and it always seems to have in the past. I believe we'll get better. I just don't know when.
I don't know how. As you referenced, it's about 7% or 8% of our composite EBITDA. But yet it does have a value to us. We'd love to pick up some more profitability there. One thing we are doing by building the Four Seasons product and even the Londoner, our portfolio is just tailor made now for that junket space and that junket resurrection if and when it happens.
I really don't want to pretend to know how and when that comes back. I've been wrong in the past thinking it would be a difficult time and they were on some life support situations a couple of years ago and they climbed back up the hill all the way. I'm rooting for them and we want to see it get better. But it's hard for me. We spend a lot of time in Macau.
We listen to a lot of people. There's a lot of divergent opinions. I would say we're rooting for that segment. We believe that segment will get better, but I just don't know how to be give you insight that's valuable as to when and how it resurrects. So without avoiding the question, that's an honest answer.
Appreciate it. I've been wrong in it plenty too. Thanks a lot.
Thanks very much.
Your next question comes from the line of Robin Farley with UBS.
Great. Thank you, Sheldon. Glad you're back. Nice to have you back.
Two questions.
One is on Japan, there are some others that are talking about consortiums and partners in Japan. So I'm just wondering what your latest thoughts are on that. And then I have a cash flow question.
Sure. So in Japan,
we're very confident in our ability to execute in a greater resort there to the standards of all of our other developments. I think it would be helpful for us to look in the Japan market and find partners that could be useful to assist in the overall development. And that could be partners that we trade with, that could be partners that invest with us. We're really meeting with people now, attempting to understand the dynamics of each individual market and looking to develop relationships to see how we can be helpful and they could be helpful to us. So much like some of the other potential concessionaires in the market, we're looking around to see if it's viable, how it might work and what the mechanics would But it's something that could be very helpful if we come to the right structure and the right setup.
Great. Thank you. That sounds a little bit more open to partners maybe than what we've heard before. So that's helpful. Thanks.
And then my other question is on share repurchase. Just looking at the amount of share repo in the quarter, it's like a bit lower than the run rate in the first half of this year and in 2018. Just what are your thoughts on share repurchase, what we should expect going forward if there was something different about this quarter just getting more cautious because of the IP business or that kind of thing? Thanks.
So I think when our Board meets quarterly and when our management chief sits down and talks with the Chairman, we really think about total capital allocation. And one thing that's been a hallmark of our Chairman's activities and developments, as I said before, is really that capital allocation. You can't just think of the share repurchase without considering our CapEx and our dividends. If you go to Page 29 and you look at the remarks that the Chairman made beginning the call, you'll see that we in effect committed to spend north of $5,000,000,000 over the next couple of years. And so we think reinvesting in the business is a much stronger indication of our view of the potential growth that we have versus return of capital through share repurchases.
We've always said that the cornerstone of our capital return policy is the dividend. You see that the Chairman raised the dividend $0.08 for the upcoming year, which we're very excited about. We think it's very shareholder friendly. And if you look at the capital expenditures that we intend to make this year and in the years coming up, we feel very strongly these will be very high return projects. And we think these projects will facilitate a much greater level of capital return over time.
So we're being very cautious with the way that we purchase shares. And as we said before, it's something that we would modulate as our cash flows become available. So what you're really looking at is a holistic view of capital investment, the dividend cornerstone program and then excess cash being returned to shareholders through repurchases.
Okay, great. Thank you very much.
Your next question comes from the line of Jared Shojaian with Wolfe Research.
Hi, good afternoon, everybody. Thanks for taking my questions. And just to echo everyone's comments, Mr. Adelson, really is great to see you doing better and to hear you on this call. So just sticking with the VIP and the mass trends here, if I look at Slide 36, the VIP contraction has taken a step down.
Obviously, it's getting worse. But if I go back to Slide 16, the mass GGR is actually accelerating here sequentially. So I'd love to just get your thoughts on why you think mass has decoupled so significantly? Why mass has really remained insulated from a lot of the macro weakness we've seen in China?
First of all, thank you for pointing that slide out. It's my favorite slide. I could look at it all day long. I think what you've seen is this become, I mean, the investment proposition in Macau going back to the beginning was always a 1,000,000,000 or so people at your doorstep. That was always the whole idea of Macau.
And all you're seeing now is the maturation of that thought process. VIP has created all kinds of headlines and all kinds of stops and starts. But the one thing that's always been true is that one thing that Sheldon really did when he built this thing, we built all these casinos back in the day, people just didn't understand it. They thought, well, how many do you need? Other people were thinking about it, we were building them.
As people today are talking about what they're going to build someday in 'twenty three or 'twenty four, we're building it now. So we've never been reticent to spend money in Macau. We've always believed that the engine here would be and should be all those people across the border. And so as we see this, it kind of makes us feel validated and that slide you point out indicates the steady march towards 2020, 2022, 2025, 30, who knows when this stops. My guess is it doesn't stop.
The only thing preventing more mass growth in Macao is infrastructure, which the government has done a great job, the trains are now going to soon at the end of the year more trains coming right into the city. Mean they're bypassing Zhuhai into the Gombe border crossing. More avenues are opening up. The infrastructure, the airport, So it's no big surprise that the Chinese mass business is growing and pre mass is growing. It's a very different business than the junket and the rolling business, always has been, which is much more capital dependent and money movement dependent and has all kinds of issues with it.
So to my way of thinking, this is the natural evolution of this market. Think of it's got a back, we always say gambling is local. The only good thing about Macau is the local markets called China. It's a big local market back there. It's not California.
And as a growth market, this is a very simple story. Chinese consumer, Chinese march towards success in middle class status is happening as we speak every day. That's why LVMH and luxury companies can't wait to get there and have been getting there for years. That's our story. The reason we're going to keep growing to $3,000,000,000 $3,500,000,000 $4,000,000,000 is because we're building product to address that market.
And as the government gives us the infrastructure and gives us the airport and trains, we build the rooms and give them all the things they want, there's no reason why it shouldn't keep growing. It is growing And that's why that's where we're focused. The junket business and the rolling business was always a wonderful side business. It's always been helpful. We welcome it.
But you're not going to the margins there just dictate that you can't invest too much capital and expect to make a great return. Our business as you see even with all the macro concerns in the market today, our business keeps marching forward 8%, 9%, 10%, 12% growth quarter after quarter. The slides you referenced are indicative of a backyard called China and the backyard people are getting richer by the day, they want to gamble. And by the way, if you've been to Macau recently, it's more from a place that wasn't so terrific to an incredible place to visit now. The people want to come because it's great.
The rooms are great. The food is great. The retail, the shows, it has it all. And I think that's why it's happening. It's not going to stop.
We're at the epicenter of that. Our investments, what this board authorized a couple of years ago to put a few $1,000,000,000 more into Macau, we want to invest more money in Macau. We're complete bulls on the growth in the future of Macau. That's why Sheldon and the board said, do the Londoner, do the Four Seasons, keep building more. When we get the green light from the government, we love to build more sleeping rooms and more retail and more restaurants and more entertainment because that's the future of Macao.
It's not going to stop. I mean Macao has proven to be very resilient and to your point despite the it's decoupled, but hasn't stopped growing. In fact, the decoupling is accelerating. And also you should know that the driver of that premium mass customer is a younger, more affluent, lifestyle driven person. He or she is 35, 45, 50 years old.
They want the best things, they want the rooms, they want the entertainment, they want the food, they want the retail that we offer. It's not simply a gambling play And that customer is not capital dependent on the junket side. They're very independent of the junket. So it's both a higher margin customer, growing by the day and there's no reason to just stop. In fact, just the opposite, they'll keep growing.
And that slide is why that's the powerhouse of Macao. The growth is just incredible. It's just $15,000,000 $17,000,000 $20,000,000 $22,000,000 Why would it stop? It won't. So we're very pleased to see it.
Our products speak to it. We keep investing there and we're very grateful to be there.
And with that, we have reached our allotted time for questions. We thank you for your participation and ask that you please disconnect your line.