Good day, ladies and gentlemen, welcome to the Sands fourth quarter 2022 earnings conference call. At this time, all participants have been placed on listen only mode, we will open the floor for your questions and comments following the presentation. It is now my pleasure to turn the floor over to Mr. Daniel Briggs, Senior Vice President of Investor Relations at Sands. Sir, the floor is yours.
Thank you, operator. Joining the call today are Robert Goldstein, our Chairman and CEO, Patrick Dumont, our President and COO, Dr. Wilfred Wong, President of Sands China, and Grant Chum, EVP of Asia Operations for Las Vegas Sands and CEO of Sands China. Today's conference call will contain forward-looking statements. We will be making those statements under the safe harbor provision of federal securities laws. The company's actual results may differ materially from the results reflected in those forward-looking statements. In addition, we will discuss non-GAAP measures. Reconciliations to the most comparable GAAP financial measure are included in our press release. We have posted an earnings presentation on our website. We may refer to that presentation during the call. Finally, for the Q&A session, we ask those with interest to please pose1 question and 1 follow-up question, so we might allow everyone with interest the opportunity to participate.
The presentation is being recorded. I'll now turn the call over to Rob.
Thank you, Dan, and thank you for joining our call today. Few brief comments, then we'll move to Q&A. Macau's future is bright. Remains the largest integrated resort market globally. Our commitment to investing in this incredible market has never wavered. With an unrivaled critical mass of world-class IRs, as well as continued improvement in transportation infrastructure in the region, Macau will mature into a vibrant, diversified tourism market over the coming years. SCL's positioning and scale are perfect to capture the opportunity. Our diversified IR model with continuous investment in non-gaming segments, including MICE, hotel suites, live entertainment, retail, food and beverage, positions us well to capture the growth opportunity. Our diversity, scale, and track record in non-gaming make us uniquely positioned to cater all segments of the market, enable Macau to appeal to international tourists as well. The new concession is a win-win.
We deeply appreciate the opportunity to operate one of those gaming concessions for the next 10 years. We are excited to deploy more capital to expand non-gaming offerings at SCL. The $3.8 billion commitment is just a baseline. We hope to invest more as the market continues to grow. The commitment to develop non-gaming is the core of our investment and operating strategy for the past 2 decades, whether it be MICE, entertainment, themed attractions, or destination sales and marketing in overseas markets. We view the investment commitments by SCL and the rest of the industry as positive for Macao. Over the past few weeks, travel restrictions have been lifted. It is too early to tell the true measure of the underlying pace of recovery, but indications are extremely positive. We have seen significant improvement on property visitation, gaming volumes, retail sales, and hotel occupancy.
We remain positive on investments in The Londoner and 4 Seasons. Our investments position us well as the market recovers. The quality of our new products will also help drive high-value tourism from the region, especially the overseas markets. Turning to Singapore, our normalized EBITDA and gaming volumes are back now to 2019 levels. Normalized EBITDA reached $386 million for the quarter. Gaming volumes are approaching 2019 level, and mass win per day is now exceeding the level of 2019. We've also delivered strong performance in non-gaming across all segments, including retail, mall, hotel, F&B, and MICE. Retail is especially noteworthy, with a 26% increase in tenant sales per square foot versus 2019. Our suite and casino renovation program is progressing. Renovated product will come online throughout the year.
Looking ahead, Marina Bay Sands is poised for further growth as all of our markets recover and become free of travel restrictions and airline lift continues to recover. Let's move to Q&A.
Thank you. Ladies and gentlemen, the floor is now open for questions. If you would like to enter the queue to ask a question, please press star one on your telephone keypad now. If listening on speakerphone today, please pick up your handset to provide optimum sound quality. Also, we ask each participant to limit yourself to one question and one follow-up. Please hold a moment while we poll for questions. The first question is coming from Joseph Greff from JP Morgan. Joe, your line is live.
Hey, everybody. Good afternoon and good morning to those in Macao. My first question obviously is gonna be on Macao and, you know, Rob, Patrick, Dan, can you remind us what levels of mass GGR, either on a $ per day basis or as a percentage of 2019 levels, do you need to be at in order to be, you know, EBITDA breakeven? Obviously, the 4Q saw GGR narrowing relative to the 3Q. I'm presuming, and love for you to expand on it, I'm presuming what you're seeing thus far early in January is either at EBITDA breakeven or maybe more recently generating, you know, some level of positive EBITDA.
pessimistic, Joe. No. We're more than breakeven.
Am I?
We're much more than breakeven, doing just fine. I'll ask Patrick to give us some color on those issues, I think we're past the breakeven. We're now in the positive territory, moving towards very positive territory. Patrick?
Thanks, Rob. A couple of things to note. Mix is important here. As you know, we're a mass and premium mass and really a large scale tourism investment company. I think the key thing to note is the market is open. Liquidity is in the market. This is gonna be a premium-led recovery. We invested significantly during the pandemic. The benefit of that investment is on full display. We have new suite products. We probably have what we think is the best new property we've had in a long time open up in Macao. That investment is really showing power in the market right now today. There's significant non-gaming scale investment that we've made that is bearing fruit. It's great to see the recovery. It's great to see the volumes coming back.
you know, it's interesting, I think, you know, Rob has talked a lot about pent-up demand over the years. He's witnessed it in other places earlier in his career. We saw it here in Las Vegas, and we experienced it fully in Singapore, and now we're at a run rate that is, you know, really, really strong. I think we're seeing that in Macao. I think the key thing is this is gonna be a premium-led recovery. In terms of break even, I don't think that's really a consideration anymore. I think we're way past it.
Yeah. Joe, I think we to be confident, be very honest and direct, we are in very positive territory and keep moving upward. I think the one thing I would say to you is that no one ever questioned the power of the base mass market. I would remind you is look at our numbers. Base mass in Macau in our building starts about HKD 1,500 per hand as an opening bet. It's a couple hundred bucks a hand, USD. That's the base mass business. The problem we're having right now is you can't get a seat in the games in our buildings. We're running 95%- 100% occupancy in those games. The same applies to slots and ATGs.
The big question everyone's thinking about, obviously is premium mass, and I think you'll be pleasantly surprised when you see the numbers coming out of the premium mass, and you'll see liquidity, you'll see resilience in that segment, and it's been very pleasant surprise. Grant, can you add some color to that?
Sure. Good morning, everyone. Good afternoon. I think the key thing we're seeing right now is that the quality of patronage is very high across all segments. It's not just premium mass, it's also base mass. It's in the retail segment. We are seeing, you know, a very strong recovery in spend per customer. Again, that's not concentrated in any one segment. It's extremely broad-based. I think what you're seeing in the public numbers on visitation, we're recovered, I think for CNY against 2019, we're about 40% of where we were in 2019 Chinese New Year for the first 3 days. You know, we're seeing revenues and volumes outperforming that visitation recovery, which is natural, which is what we've seen in other markets.
You know, things are looking, you know, extremely positive right now.
Great color, guys. Thank you. Then maybe switching over to Singapore for my follow-up question. Obviously, your comments on mass gaming, Rob, obviously very strong. Can you maybe talk a little bit about your comments as I believe on slide 4 saying, you know, late December and thus far in January, there's been an inflection, at least from the mainland Chinese segment. Can you give us some perspective on the relative, I don't know, you wanna look at it on a revenue or EBITDA contribution, you know, looking at, you know, 2019 levels. Then, you know, where that was, you know, sort of more recently as a % of the total mix.
Yeah. I'll let Patrick. You wanna address that?
Yeah, sure. I think the important thing to note is that there was this pent-up demand story in Singapore. Now it's blossomed into full-on bonanza. What we're really seeing is every segment is working. You know, we had a lot of noise in this quarter because of the hold. You know, we rolled north of $7 billion, which is pretty unbelievable considering where we came from. You know, the mass play was very strong. While we were doing this, we had almost 20% of our room inventory out. When you look at that 477 win number in mass, and you look at the rolling volumes and realize we're out 20% of our rooms, there's a lot of leg room here. There's a lot of room for us to go.
I wanna be careful when we talk about margins and contribution because we're gonna adjust that as we change mix, as we get rooms online, as we go through the renovation, as we change our suite product, as we, you know, price up, as we yield up, and as we have access to higher value tourism. This is really a forward-looking thing more than it is what happened in this quarter because we're gonna continue to sort of adjust while we get our mix right. You know, what I would look to in this business is margin expansion over time, more rooms coming online, better product, better service, and of course, being able to capture a very strong component of both VIP play and mass play.
Joe, I think Patrick's point, we're missing 2. You know, we're in a great place. We're back to 2,000. We're back to 1.6 run rate if you take out the abnormal low hold on the rolling. The 2 drivers, there's a lot of drivers, but the 2 jump off the page are renewed tourism throughout Asia and China in particular. That's yet to come. We're doing all this. We're ending 2019 with no China participation and/or limited China participation. As Patrick mentioned, a handicapped physical plan. We are in a very, very fortunate position with MBS. I think it's gonna become a property with a lot of growth, and I believe it's gonna be a $2 billion business in the future.
I see nothing holding it back except for our own renovations, which are extraordinary. I hope you get the chance to see it. The reemergence of Asian tourism, including China back into the property. The only regret we have in Singapore, we just like to have more capacity because, I think you'll see in this year the power of the earning power of MBS. It's extraordinary product and we're lucky to have it.
Patrick, just back to your mix and yield comment. Do we interpret that at least if we look back to 2019, that China, MBS patron, was a, you know, had a positive mix on spend per trip or spend per day or gaming revenue per day?
I think it's a combination of factors, Joe. I think obviously the China market's always powerful. I also think there's, you know, there's cost issues in all these markets. There's this inflationary factor that's undeniable, be it energy, wages. I mean, there's a different world out there, and you've got to cope with it. The thing about MBS that fascinates us is we believe we can drive revenues across the board. We're gonna rethink our retail, rethink our table mix, our floor, our room pricing. We think we have product that the demand will be close to insatiable for it from a gamer and non-gamer perspective. We're gonna overcome margin, cost, margin by overcoming costs with higher revenues, a lot higher revenues across the board in every segment. That's the approach.
We see MBS as a very unique product that's unrivaled in that part of the world, and we can just push pricing across the board. Gaming pricing, ADR pricing, retail pricing, F&B pricing. It's just that good and that desirable. Let's face it, the market right now is hugely in our favor. Singapore is very desirable from a lot of perspectives.
Great. Thank you.
Sure.
Thanks, Joe.
Thank you. The next question is coming from Carlo Santarelli from Deutsche Bank. Carlo, your line is live.
Hey, everybody. Thanks and good evening. Rob or whoever wants to handle this. I was just wondering in the brief time that China has more or less reopened, have you guys seen positive or negative, any change in behavior as it pertains to patronage at MBS?
MBS. That's a good question. I think it's too early to say we're gonna see that. I see us as getting plenty of China participation, both Macau and Singapore. It's really too early to say. It just, you know, happened so quickly and the turnabout was so rapid. I think it's too hard to predict. I think the way this is going to segment, though, is that we're going to get more than our fair share of the rolling business at MBS that moves in that direction, and we'll get the premium mass customer to visit more into Macau. I think our business really is gonna split in that direction. I think it's pretty predictable it's gonna happen here. And we're okay with that.
Singapore will get the top of the top, but each of those places will get tons of premium mass demand from China and throughout the region. I also think people underestimate how powerful Macau can become as a desirable visitation place throughout China. It's got everything. It's got the rooms, it's got the access, One thing it has beyond Singapore, it's got lots of capacity and lots to offer. I think Macau is going to be a very strong international destination. We plan to be very aggressive trying to push people into Macau to see the property, all of our properties.
That makes sense, Rob. Thank you. Just as a follow-up, and I understand kind of looking backwards at things that are Macau related is somewhat pointless in the environment that we're in right now. It does stand out a little bit when looking at your base and premium mass table revenues from the slide deck. Your premium mass is representing, I think, 20% of 4Q19.
Yeah.
Base mass kind of more like mid-teen, 16, something like that. However, the premium mass is down considerably year-over-year, whereas the base mass is reasonably steady year-over-year. Is that a whole dynamic on just lower than, you know, normal historical volumes, or is there something else that's kind of made those 2 diverge more recently here in fourth quarter specifically?
No, I think it's just a visitation issue. It's not a hold issue, it's a visitation issue. I think you're going to find that washes out. I wouldn't take those numbers too much to heart. I think when you look at Q1 or when you see January, when those numbers are out there for the market, I think it'll all wash away quite nicely. It won't enter into your thinking, Carlo. It's just, it's a non-event. I think you'll see a surprising strength in both those segments. I would say in Macao, we're gonna be very strong, very overrepresented in the base mass because we have the capacity. We're a scale player, we have the capacity in the gaming, non-gaming, retail, restaurant space to do extraordinary things in the base mass.
Again, as I'll reiterate, base mass in Macau is a different animal than the U.S. It's a $200 base bet, $175 base bet. It's a pretty special customer. We are going to overrepresent because of our scale. On the other hand, with all of our suite product, et cetera, I think we'll also be the leaders in the premium mass business. We have a very strong future ahead of us in Macau. I always chuckle people. If you're looking for a negative commentary in Macau market, you're in the wrong earnings call.
Understood. Rob, just quickly, if you could remind us, to the extent you guys are willing to share it. 2019, your direct VIP volume, your in-house VIP volume as a percentage of total, would you guys be able to share something like that?
We would, but we won't.
Understood.
Okay.
You could, but you won't.
We could share, we just won't. No, we're not going to do that. Carlo, thank you. It's good talking to you.
Thanks, guys.
Thank you.
You as well. Take care.
Bye.
Thank you. The next question is coming from Stephen Grambling from Morgan Stanley. Steven, your line is live.
Hi, everyone. Thanks. Can you hear me okay?
Hear you good, Steven. Go ahead.
Morgan Stanley.
Just out of the visitation data for Chinese New Year, it looks like Hong Kong has been the bigger driver, in the recent uptick in visitation. Is there any way to parse out recovery between Hong Kong and mainland China and any reason why spending behavior, and recovery may be different between these source markets?
Yes. I've got a perfect answer to that, Mr. Chum.
Yes. You can see from the visitations numbers that are published by the tourism bureau, the Mainland Chinese visitation is at about 30% recovery rate versus 2019 CMY. Obviously with 40% recovery for overall visitations, Hong Kong visitation recovery has been higher. Mainly I think as a result of just the ease with which they've been able to go. Obviously Hong Kong has had a longer stabilized situation as it relates to the pandemic. I think from a pure visitation point of view, this is not unexpected. Bear in mind, the transportation support for the Hong Kong visitor only really opened up on the 8th of January.
This has been a very rapid increase in Hong Kong visitations. That said, I think we referenced back to comments that Rob made earlier, and I alluded to as well, I wouldn't get too stuck on the visitation recovery. I think in these types of reopening we're going to see the premium customers come back first. The core customer coming back as a much bigger % than the overall visitation. I think what we're seeing is the quality of revenues and the patronage from all regions that visit in Chinese New Year has been very, very high. We are way outperforming the visitation recovery in terms of volumes and revenue.
Indeed, I think if you look at our property visitations, our recovery rate in our visitations to our own property, is far outperforming, the recovery in the overall, visitation numbers, in the market, versus 2019.
Steve, I
That should do it, Michael. Go ahead.
To Grant's comment, just, you know, again, we don't want to confuse visitation with GGR. There's not necessarily a an easy way to make them work. I was recently in Singapore. I walked in one of retail stores with our retail person, and she told me the sales in the store were like $70 million. I said, "There's nobody here, no one in the store." She said, "Rob, no need the right people, not a lot of people." I think that's what's happening with Macao. You're getting the right people showing up in mass, and it's reflecting in your numbers. You'll see that when the market numbers come out. I think the early adapters to the market are the right people for the market, and I think that's why there's confusion in the visitation versus the actual revenues.
Makes sense. Maybe as a related follow-up there. There's been a similar dynamic of stronger spend per visitor in the U.S. that ultimately drove much better margins.
Yep.
How are you thinking about the puts and takes to margins in Macao versus what we've seen in other markets?
Grant, margins?
Yeah. I think first of all, our cost structure is in good shape. You know, unfortunately, we've had to, you know, spend extra effort in optimizing the cost structure over the past 2, 3 years. We've got a very lean cost base right now. In terms of gross margins on the revenue, I think a couple of things. 1 is, our mix obviously is more favorable going forward, just from a gross margin mix perspective, simply because vast majority of our revenues will be coming from the non-rolling and slot segments. Secondly, the non-gaming we expect to be growing, and that's obviously a much higher margin. We expect to be growing in retail, hotel, F&B, actually all the non-gaming segments.
You know, that's the structural framework for the margin. Obviously the actual flow through and the percentage margin we ultimately deliver from this very positive structure is really dependent on the rate of volume recovery. You know, you still, you still need the top line to recover to a certain level before you get the flow through. Then to go beyond that, obviously, you know, we hope and we all, we are all working towards that is for this market to continue to grow, you know, and hopefully, at least in, in the mass segments and non-gaming segments, to go beyond where we were in 2019. If that happens, obviously our margin structure should be very positive.
Hopefully that gives you a sense of how we think about the structure of the margins going forward.
Absolutely. Thanks so much.
Thanks, Stephen.
Thank you. The next question is coming from Robin Farley from UBS. Robyn, your line is live.
Great. Thanks. I wanted to ask, you know, you've obviously always been very focused on the mass business there, some of your competitors that have been more VIP focused, are you seeing them do things differently now that there's, you know, not the VIP market to go after in the same way there had been? Is it too soon to be seeing what changes that might mean?
I would assume it is, but I'll defer to Grant since he's on the ground. I can't imagine we have any visibility into that at this point. Clearly we have a new market here which favors our asset base, and our approach for the last 20 years has been, you know, scale. as you well know, Robin, it's a mass story with premium mass, retail, convention, et cetera. We don't change a lot. It was tailor-made for what we do, this environment. Our competitors will adapt and have to change, I don't know. Grant, is there any color on that?
Yeah, I think, Robin, the competition for premium mass has always been very intense, I think will continue to be given the dynamics you just referenced. At the same time, I think that as Rob says, we've got footprint and scale advantage from our breadth and depth of non-gaming assets and facilities, I think really position us very well for all segments of mass.
As Patrick referenced at the outset, the product that we've been developing over the past 3 years, especially in The Londoner Macao and the Grand Suites at 4 Seasons, are really prime positions to help us be more competitive in the premium lifestyle segments of the market, as well as I think hopefully, to drive overall, you know, high value tourism to Macao over the coming years. I do echo the point about international tourism as well. I think, you know, our footprint combined with our new products, and our, you know, traditional strength in MICE, and international marketing network, really position us very well to bring those high value guests to Macao as well.
Rob, great. Thank you. Thank you for that color. Just for my follow-up question on Macao, can you give us sort of a rough sense of, you know, that dollar commitment that you've made to invest over the next 10 years in Macao, kind of roughly what % of that might be new projects and what % kind of fall into the OpEx line, you know, kind of like overseas marketing and things. You know, just kind of a CapEx versus OpEx split, you know, just ballpark. Thanks.
Yeah, sure. I think one thing that would be helpful is if you turn to page 22 in the presentation, you'll see some details on that. It might be best to refer to those pages because we do break it out, and there are several pages behind that explain what our concession renewal commitments actually are. It's there in the presentation.
Thanks. It's always tough to get through all of your slides before things get started.
No problem. I'll, you know, I think the key thing here is that we're very committed to investing in the Macao market. We think this investment will drive additional long-term tourism value and diversification of Macao's economy. We're very excited to make these investments, and we think these are things that will really help achieve our goals and the goals of the government. We're looking forward to it, actually.
Great. Thank you.
Thank you. The next question is coming from Shaun Kelley from Bank of America. Sean, your line is live.
Hi. Good afternoon. Good morning, Grant. Just high level, you know, as you kind of look through kind of what you're seeing probably real time, you know, could you give us just your latest thoughts on maybe the pace of recovery here? Do you expect things to be pretty, you know, pretty linear, or any chance of a, you know, whether it's COVID or restriction related setbacks or anything else that could, you know, change, you know, what you're seeing on the ground? I mean, obviously Chinese New Year, you know, is fantastic, but it would seem like, you know, the opening here is just going to continue.
any reason that would be kind of different from the reality or how are you seeing your booking shape up, you know, and the patterns you're expecting to see over the next couple of months?
I'd begin by saying, first of all, we're just thrilled to be open and making money and seeing demand like we're seeing. I don't think any of us have the aptitude or the insight to tell you what's going to happen, you know, at post-Chinese New Year. I do think longer term, you have to have real strong confidence. When you get to see these numbers that we are seeing, that this is a market that's going to rebound, that's a market that has a strong base mass, premium mass. Some of the fears feel in the market about, gee, what's the liquidity like? What's the resiliency? I think those fears will be pushed aside. What's the trajectory and how fast it happens? I don't think any of us have the gumption to venture a guess.
I think it'd be silly. We just feel fortunate we're open, we're operating. We think it keeps getting better, not worse. I don't believe COVID is going to be, you know, obviously, China's gone through a different trajectory than we did here in the U.S., but hopefully that won't be a problem. I, again, don't want to speak for anyone I can't speak for. If things keep going like they're going, we'll be in a very happy place in 2023, especially I think somewhere in the second half of the year. As normal travel patterns resume, Hong Kong gets back on its feet, Mainland China, I think there's a lot of growth potential and a lot of good thoughts coming our way vis-a-vis the future. We are, again, as I said earlier, we're not going to tell you that we don't believe in this.
We believe in this story very strongly. We believe in our assets very strongly. We believe in international tourism in Macao very strongly. We're not going to predict when it happens, how it happens, how fast it happens, but we feel very positive about what's going to happen in Macao in the long term. Very positive. We're looking to investing money in there and getting back to where we were in the, in the past in Macao. We couldn't be more positive on Macao long term.
Great. Thanks for that, Rob. Then maybe a little bit more specific one for Grant, if I may, but just, you know, wanting to dig in a little bit more on just the labor and staffing side of what you're seeing in Macao right now. You know, we talked about the margin structure high level, you know, are you fully expecting to return to levels of staff that you had, you know, pre-COVID? Are you already there? Will it be even above those levels? Kind of what's needed and, what have you know, optimized? I know those people have many of them have found employment elsewhere. The market has grown since where we started. Kind of how do you think about maybe either FTEs or overall OpEx run rates relative to, you know, 2019?
I think, Shaun, we've also become more productive and efficient through the past couple of years. You know, I think we'll have to, you know, rethink, it wouldn't necessarily be referencing exactly back to 2019. Also our mix of product has also changed quite a bit through The Londoner. We do have more high-quality non-gaming asset base to operate as well. To give you a bit more color, today, we are short of manpower relative to our full operating capacity and relative to the demand that we're seeing. We're not operating one of the Sheraton Towers as we speak. We are minus 2,200 rooms from our operating capacity.
Our newest hotel, Londoner Court, which we soft opened in the past year, we're not at the full operating capacity for that high-end all suite hotel. We're still only about two-thirds of the way through in terms of our ability and manpower to operate the whole hotel. You know, both at the top end and at the mass end, you know, we are still short of manpower to operate at full capacity. We'll be progressively hiring to fill the gaps as we go through the recovery. Hopefully, you know, within the next few months, we're gonna be in a better place relative to our full operating potential.
Because we clearly see the demand pattern, I think is gonna urge, you know, the whole industry to staff up and to be able to operate, especially for these peak periods. That's another, you know, part, you know, we have no crystal ball, as Rob says, on the post CNY, but clearly the early indications of metrics like the demand for the hotels, is telling you that, yes, the demand is staging a strong recovery.
Thank you very much.
obviously we're gonna have to start.
Thank you. The next question is coming from Chad Beynon from Macquarie. Chad, your line is live.
Hi. Afternoon, thanks for taking my question. In the slide deck, you highlighted principle areas of development being Macao, which we just talked about, Singapore, which we talked about, and New York, which I was wondering if you could elaborate a little bit more on. Second part of that question is, I know in the past you talked about other potential opportunities in Asia, like a Korea or Thailand, you know, years ago we talked about Japan. Wondering if those are going quiet at this time. I guess firstly on New York and then secondly potential Asian opportunities. Thanks.
Actually, let's reverse. If you don't mind, I'll reverse it. Just I think we all know Thailand, there's been discussions there, and we're certainly looking at Thailand, and that's no secret. It's been in the press that Thailand's a possibility. We're certainly looking hard at Thailand, and we'd love to have a presence there in the future. Japan, as you reference, is not there, and Korea, there's nothing viable to speak of today. We'll jump to New York, which is an extraordinary and unique opportunity. I think for the winning bidder or bidders, it's gonna be an amazing opportunity because of the very simple dynamic of a huge market with limited capacity. There's only a few casinos there.
It's probably the only place in the US where you can have millions and millions of people, there'll be probably just a handful of casinos total. The win per units there will be exceptional. The lucky winner is gonna do very, very well. I think the evidence of the market's clear just by looking at the 3 operating properties, have their table games, and really don't have much of a. It's not a great product right now in New York as far as room capacity, yet still approaching $2 billion with just slot machines. Our approach is very much an LVS. It's anchored by an LVH historical approach, which is scale and quality. We're not looking to build a casino.
We're looking to build not a regional casino, but rather a truly large hotel with spa, convention space, dozens of restaurants, a new theater, a huge entertainment feature, a transformational product which will positively impact the community and grow tourism. A powerful statement. We're not looking to be in this thing in a limited way. We're, we'll be all the way in. We think if we do it'll be transformational for the county we're working in, very good for the people in the county, and something they can be very proud of. It will drive tourism, outsized tourism into Nassau. Our bid is very much traditional in the thinking of LVS, large scale with numerous non-gaming assets, lots of meeting space, probably 400,000 sq ft of meeting space.
I view New York very much, very unique to the rest of the United States. It's a population in the many millions. You have just a couple casinos. Very different here in Las Vegas. We've got a huge local market, but dozens and dozens and dozens of casinos. There you'll be basically alone. It's an exceptional opportunity. It won't come along again. I think this is 1 and done. We're trying very hard, and we've been trying to do New York for a number of years, but it looks like this is finally someone's opportunity. Hopefully, it's ours.
Thank you very much, Rob. Secondly, just wanted to ask another one on Macao. Now that you've had some more data in the market, Grant, it seems like there's an even bigger shift towards Peninsula or, I'm sorry, versus to Cotai versus Peninsula than we've seen in the past. I was wondering if you could confirm that or if that's really just kind of a mix of, you know, a reflection of what we're seeing from the different modes of transportation. Wondering if that's a trend that could continue in 2023. Related to that, how are you thinking about your asset in the Peninsula if there's CapEx opportunities? I know that's not part of the big CapEx plan. Thank you.
Sure. Rob, should I take that?
Yes.
Yeah, I think I haven't seen any data on the split between Cotai and Peninsula. However, it stands to reason, I think structurally, you know, we see and we have always said, that Cotai will become, you know, the primary hub. I think even, you know, pre-COVID, we were already more than half of the master revenues, from Cotai. I think that trend will continue. I think there's a lot of different reasons, but I think at its heart, the main reason is, you know, just the cluster of world-class integrated resorts that you have on Cotai.
What this, I think in the next generation of these lifestyle consumers are looking for from Macau as a destination and all of the investments in non-gaming that are going into basically making these resorts even more desirable over the next 10 years, all of those structural factors surely will continue to push, you know, the balance of revenues towards the Cotai side. That's a structural issue that will continue to evolve over the long term. As regards to, you know, we obviously have one asset on the peninsula, we do intend to reinvest in that asset. You know, clearly the majority, the vast majority of our capital will still be going towards our Cotai properties.
Thank you very much. Appreciate it.
Thank you. The next question is coming from Brandt Montour from Barclays. Brandt, your line is live.
Hey, everybody. Good morning. Thanks for taking my questions. Starting on Singapore, I was curious if you could compare the spend per visitor that you're seeing there to what we saw in Las Vegas in 2020 and 2021, if that's sort of holding up in the same way, if the curve looks different quarter-over-quarter, and then if you wanna throw Macau early days into that comparison, that would also be helpful.
Yeah, I think it's really hard to compare between markets. The key thing to note is that it's really all about pent-up demand, consumer tourism experience, and the products that we offer and sort of, the nature of those assets for high quality tourism. It's not really fair to compare between markets. The price points are different, consumer behaviors are different. It really doesn't look the same. What is thematically similar is the pent-up demand story. You know, Rob, as I said before, Rob's seen it in his career in other locations. We experienced it here in Las Vegas in a very strong way. We saw it in Singapore in a very strong way, and it's still in effect. We're starting to see it in Macau now, and it's coming on strong.
I think it's really the nature of consumer behavior as opposed to the specific price points in each market.
Okay, that's great.
It's hard to Patrick's point, think about what Singapore's market GGR versus Macau's. Macau could be a $25 billion-$30 billion GGR market, has been higher than historically. Singapore just doesn't have the capacity. Las Vegas is much more of a, it's got a gaming component, but it's got a very strong non-gaming. It's, it's almost impossible to do apples to apples. The driving force is the scale of people in Macau and in Mainland China. The accessibility to adjustable market is so huge in Macau and so is the product offering. To Grant's point, the Peninsula versus the Cotai, it's got such enormous capacity and great product that That market, it's so outsized when it gets back to full capacity, it's hard to compare it to anything. It's so powerful.
Okay. Okay, thanks for that. On slide 22, the long-term commitment to Macau slide, on the capital, the left side of the slide, I was curious, you know, looking at your plans for the next 10 years, if you think you're gonna be able to achieve return levels commensurate to recent projects that you've done in that market, you've enjoyed in that market.
Yeah, we sure do. I mean, you're talking to a bunch of people who've been doing business in Macao for 20 years, and we've seen the returns. We've seen what non-gaming can do. Our theaters, our retail, our entertainment has driven billions and billions and billions of dollars of EBITDA, and they will in the future as well. We have no concerns whatsoever about investing and getting a solid return on non-gaming commitments. All they do is drive more visitation to the market. They're additives to the market, certainly gonna drive more business right now. We look at this as a 10-year starting commitment and going beyond that. Our commitment to Macao is as long as we can be there. So we have no hesitation to invest or show the market a very, very considerable return.
Just look what we've done in the past. I mean, on our current assets, mostly non-gaming. The lion's share of our investment in Macau is non-gaming, the great majority. That's worked out pretty well for us. We think the next 10 years will continue that trend, we're very happy and very committed to Macau.
Excellent. Thanks so much, everyone.
Sure. Thank you.
Thank you. The next question is coming from Ben Chaiken from Credit Suisse. Ben, your line is live.
Hey, how's it going? Just a quick one for me. Historically, capital return's been really important to you guys. Obviously, Macao is just beginning to ramp, and there's a lot of areas to invest. How are you thinking about the dividend these days? Is that still important? If so, how should we think about timing of that?
You know, if Sheldon were here, he would say, "Yay, dividends.
I'm so tempted to say yay.
Someone put us on hold in Macau.
Sorry about that.
Sorry about that. Brief commercial from Macau. As I was saying, you know, if Sheldon were here, and we miss him dearly, he would be saying, "Yay, dividends." I think, you know, Las Vegas Sands is a growth company. We're back to growth. We're a development company. We do large scale developments in key markets, most importantly, we're also a return to capital company. I think as our business returns and as we see normalization of cash flows, we're gonna look to start the dividend again and be very shareholder friendly. At the end of the day, we're very focused on the strength of our balance sheet of new development. You know, you heard Rob talk about New York, it's very exciting.
There are other things that hopefully we'll get a chance to do in the near term. Opportunistically, I think, we'll continue to deploy capital where the highest returns are. As part of that, the dividend will be fundamental to our shareholder return strategy. I think we're gonna wait and see where operating cash flow ends up, and we'll make some assessments at that point.
Got it. Thank you.
Thanks, Ben.
Thank you. The next question is coming from Steven Wieczynski from Stifel. Steve, your line is live.
Yeah, you guys, good afternoon. So Rob or whoever wants to take this. I mean, you know, if we look at visitation in Macao over the last, you know, let's call it week or so around the start of Chinese New Year, it does seem like it has been pretty strong. I guess, you know, is there any commentary or color you could give us about the spending patterns of these folks that are coming into the market? Meaning, you know, are these folks gambling as much as they did before? Or is that some of that spending being pushed more into the non-gaming side of the floor?
you know, maybe it's just too early to tell, but I think with how high Chinese savings levels are right now, I'm just wondering if you can provide, you know, any color around that.
Yes, yes and yes. They're spending in retail, they're spending in gambling. They're spending, as we made a reference earlier, Steve, it's just the right customers showing up. You know, I think this is historically how it's worked out in recoveries where those who are the most aggressive gamers and retail spenders show up first, and we're seeing that strongly in Macao. It's a very good audience, a very strong audience. You'll see it in the market numbers when they come out. It's really gratifying for those of us who wait a long, terrible 3 years to see these days return, and they're returning. I think the real question is, these customers are there now. The question is how many more are coming behind them?
To your point, visitation has been mediocre out of mainland China relative to what had been previously. We're not even there, yet we're hitting some pretty big numbers coming out of Macao in the market. We're very enthused about... I don't think it's not necessarily choosing gaming or retailing. They're doing both, and then they're eating and shopping, having fun, doing everything. It's very typical of these recovery situations where the people who want it most show up there and they're buying, they're spending, they're enjoying life again. I think the Chinese are no different than the Americans who came to the U.S. markets and enjoy themselves. Hopefully, the party continues. It's just getting started. We've got a very, very encouraging start to this whole thing after the last 3 years.
Grant, do you want to add some color to that? Any issues you can raise that I haven't?
No. I think it's just as you said, the nature of these reopenings, you know, it will attract the high quality customers first. And that's what we're seeing. And I think we saw that in Singapore in April as well. You know, we had much stronger recovery in the Southeast Asian overseas spend in Singapore versus the recovery in the tourist arrivals. And I think, you know, Macao is also following something similar, except for the fact that Macao has a much bigger advantage in being able to support visitation, not just by international airlift, regional airlift, but also by land and sea as well, and domestic airlifts then connecting through Southern China as well.
I think it's, you know, let's see how what the pace of visitation recovery is like versus the revenue recovery. You know, so far, I think the pattern that we've seen in CNY does support that pattern of, yes, you're getting a much stronger revenue recovery than you are in visitation.
I think that last comment, Grant. That's a great one in that this is not an air-dependent market like Singapore. You don't need the airlines. You can come other ways. Access Macao is mostly vehicular or boat. I think it's a huge advantage to Macao that as the population conquers the virus situation, gets more confident, no impediments to massive growth in visitation coming to Macao from China. That's a very positive point. Steven, look, we are pleased we're seeing they're spending in every direction. We feel very fortunate. Hopefully, it just continues to ramp up from here.
That's great color. That's it for me, guys. Really appreciate it.
Thank you.
Thanks.
As always.
Thank you.
Yes.
The next question is coming from David Katz from Jefferies.
Hi, David.
Hi, this is Cassandra on behalf of David. Happy Chinese New Year to everyone.
Thank you.
Yeah, I think a lot of my questions have been answered already, so I hope it's not getting repetitive. You've mentioned cost issues in all market, especially in energy and wages. Could you discuss to what extent are those permanent and where we might be run rating in terms of EBITDA versus 2019's level today?
We're not going to discuss EBITDA at this point, except for what you've seen in our Singapore. I do think energy is vasting. It does vacillate. It doesn't go one way, as you well know. Wages, I think worldwide are gonna be an issue for everybody. You know, I think we will deal with that. I don't see them coming down or a whole lot. Again, our resorts and our capacity constraint ability to price up. The great thing about our business is you can price up and retain your margins. That, I think, will be our strategy in Singapore. And also in Macau. I don't think wages are gonna decline greatly. I think Grant alluded to efficiencies, I think that's important. We have a large workforce in the tens of thousands in Macau.
More efficient and better at doing what we do, that should be helpful. I think we all are gonna learn to live with, at this point in the US and Asia, higher wages appear to be in the structure for now. Patrick?
I think the key thing is that, by the nature of our business, we have resiliency in the face of inflation.
Sure.
As Rob mentioned, we have a lot of flexible pricing. Hotel rooms, gaming pricing, the way we operate food and beverage, the way we operate all of our non-gaming amenities, these are not long-term contracts. We have the ability to go with the market. While there are some structural increases around wages, around inputs that we use, at the same time, we have the ability to price because of the unique nature of our products, the experiences we offer, and to be fair to the positioning of the products that we have.
Yep.
You know, we've invested a lot over many years in both markets. There's a reason why they're so strong. In our mind, inflation is a real thing, we have to take it into account, but we have the ability to work through it and actually grow the margins of our business over time.
Great. Thank you. Shifting to New York, have you shared or disclosed publicly what kind of investments you expect to make if you win the gaming license versus if you don't?
Yeah. The current thought in our, in our heads is about $4 billion-$5 billion. Again, this is not a regional casino, this is a full-blown resort, like, with MICE, entertainment, retail, restaurants. It's the real thing. It's not meant to be a small-time investment. We're going all the way in and building something transformational that drives tourism, and we think will be the biggest, in terms of the casino business, will be the biggest revenue generator.
Great. Thank you so much for taking my questions.
Thank you. Appreciate it.
Thank you. The last question today will be coming from Dan Politzer from Wells Fargo. Dan, your line is live.
Hey, good afternoon, everyone, and thanks for fitting me in. I guess first on Macao, I know VIP was historically about a quarter of your total business. I mean, to what extent, if any, have you seen this customer return and in what form has it been, more of a credit, a direct VIP-type customer or is it customers showing up in premium mass?
One thing to note is the VIP contribution was much lower than that. You know, let's call it high single digits, low double digits historically. We've always been mass and premium mass driven. It's on a contribution basis because of the, you know, the margins in premium and VIP, and to be fair, junket business, were always structurally much different than they were for our mass business. We've always been led on a contribution basis by our mass, by our mass play and our premium mass play. You can tell that by our asset base and how we speak to our customers and the type of tourism we attract. That being said, I do wanna turn it over to Grant for some additional comments.
Thanks, Patrick. not a lot to add. I mean, all of our rolling business currently is in the premium direct program. I think the second point is premium mass is doing, you know, recovering much faster than premium direct. I think that's what we're seeing right now.
Got it. Just to follow up on the New York investment, the $4 billion-$5 billion you mentioned, I mean, should we expect a commensurate return on that type of project as you've seen in your Asia-based investments or given the high density population, the spend per unit? You know, is it reasonable to think that there could actually be upside to that kind of 20% historical return?
I think for us, you know, we're very focused on return on invested capital. You know, Rob and the rest of the team really looks everywhere that we can to try to best deploy capital in the highest return outcomes. We would be interested in New York if we didn't think the returns were there. We think it's a very strong potential opportunity. You know, for us, it's gonna be about the jobs we create, about the tourism we drive, about the investment in the local community, the relationships that we have. In every market that we're in, we're typically the largest trade partner with small and medium enterprise. We're looking to develop deep community roots so we can support the community and really show this industry is something that can benefit everyone. We're very excited about it.
We think the returns are there. Otherwise, we wouldn't be interested.
Got it. Thanks so much.
Thank you. Ladies and gentlemen, this does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.