Good afternoon. My name is Sylvia, and I will be your conference operator today. At this time, I would like to welcome everyone to the Las Vegas Sands 2015 Third Quarter Earnings Call. Remarks, there will be a question and answer session. Thank you.
Dan Briggs, you may begin your conference.
Thank you, operator. Before I turn the call over to Mr. Adelson, please let me remind you that today's conference call will contain forward looking statements that we are making under the Safe Harbor provisions of federal Securities Laws. The company's actual results could differ materially from the anticipated results in those forward looking statements. Please see today's press release under the caption forward looking statements for a discussion of risks that may affect our results.
A definition and a reconciliation of each of these measures to the most comparable GAAP financial measures are included in the press release. Please note that presentation is being recorded. We also want to inform you that we have posted supplementary earnings slides on our Investor Relations website for your use. We 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 Q and A session, we ask that you please limit yourself to one question and one follow-up question, so we might allow everyone with interest to participate.
With that, let me please introduce our Chairman, Sheldon Madison.
Thank you, Dan. Good afternoon, everyone, and thank you for joining us today. I'm pleased we continue to execute our strategic objectives during the quarter. And despite the strategic objectives during the quarter. And despite the continuing challenges in the hotel market, we delivered a strong set of financial results with company wide whole normalized adjusted property EBITDA reaching 1,090,000,000 dollars an increase of 7% over the prior quarter.
At the same time, we continue to return excess capital to shareholders. It has always been clear to me that our unique MICE based integrated resort business model positively differentiates us from our competitors in terms of both financial performance and economic contribution to our host jurisdictions. In Macau, our whole normalized EBITDA was up quarter on quarter with continued sequential improvement in our operating margin. In Singapore, Marina Bay Sands delivered yet another record quarter in maintaining win per day when measured in Singapore dollars as well as a 20% sequential increase in rolling volumes. On a constant currency basis, Marina Bay Sands whole normalized EBITDA was up 22 point 4%.
At the heart of our company's success is having the right strategy at the outset. We had the courage of our convictions to build early and aggressively. We developed critical mass through scale and diversification. And we offer product and amenities that are best positioned to capture long term tourism and consumption growth in Asia. We're unique in the scale and diversity of our portfolio.
We are focused on the most stable and profitable segment, the mass market. We are clearly differentiated by the strength of our cash flow and balance sheet and with a further distinguished versus the competition by a track record as well as the pioneer of the MICE based integrated resource business model. That balance sheet strength at only 1.6x net debt to EBITDA allows us to stay fully committed to our development plans as well as our commitments to returning capital to shareholders. Again, this is unique in our industry. Our retail mall portfolio, which features the industry's broadest and deepest set of retail offerings in both Macau and Singapore, results are unique.
I'm pleased to highlight that our retail mall revenues have held up well in today's retail market, which is softer in particular at the higher end. Also, we have the ability to monetize our retail world portfolio in the future. In Macau, our share of EBITDA in the 6th operator market has continued to increase to around 36% in the 1st 6 months of 2015, up from 34% in 2014. In fact, in quarter 2, our EBITDA share climbed to 39%. In Singapore, our share of EBITDA in the duopoly market has increased to 65% in the 1st 6 months of 2015, up from 59% in 2014.
That's notwithstanding the fact that projections of the Singapore market have been premature and exaggerated. Our operations represent a substantial portion of the EBITDA generated in all of Asia for the industry. This is truly unprecedented. Now let me take you through some of the operating highlights of our results in Macau for the quarter. For quarter 3 on a whole normalized basis, Sands China EBITDA was $537,000,000 up 1% over the prior quarter.
While we consider EBITDA share the most important metric reflecting market performance, We also held the number one spot in revenue share in the quarter with 23.6% of the Macau Markets gaming limit. In the mass segment, we do see signs of stabilization. We continue to benefit from the scale of our hotel room inventory, the diversity of our product offering and the attraction of The Venetian is Macau's must see destination. I want to remind you because we haven't talked about this before that the casino at Venetian Macau is less than 4% of the total amount of space in the Venetian Macau. We sometimes get asked whether our capacity advantage is diminished given the recent market revenue decline.
I believe the opposite is the case. In a market where peak periods, the weekends and holidays matter more than ever before and where mass market customers generate the lion's share of the revenue of future profit growth. Our capacity advantage will in fact be further amplified. I believe the Venetian Macau, which is a must see attraction for everybody coming to Macau will be matched by the Parisian, because it's got a geographical theme that people really want to see. Look at our market share revenue and the peak revenue periods, 26.5% in May with the Labor Day holidays, 25.3% in August, the peak summer month and in October around 25% again for National Day Golden Week.
Hotel occupancy in the July August summer months was 89%, 5 percentage points higher than that of the home and care market. In VIP Cayman, despite the continued weakening of the Dunkin' segment during the quarter, our premium direct business yet again delivered a solid quarter. Our premium direct rolling volumes were up 1% quarter over quarter versus the 17% decline in the overall market junket segment. With respect to cost efficiencies, we are well on track to achieving more than US200 $1,000,000 of savings in 2015. Old normalized EBITDA margin in Macau improved sequentially to over 33%, primarily reflecting cost efficiencies.
I'm pleased that since quarter 1, we have been able to sustain higher levels of market share while controlling costs and increasing labor productivity. Rob can elaborate further in the discussion later. With the completion of St. Regis and pre leasing, we will have almost 13,000 hotel rooms in 4 interconnected resorts. Our 840 retail stores across 4 shopping malls with the potential to add several 100 more stores in future development phases subject to government approval.
2,000,000 square feet of meeting and acceleration space and 4 performance and event venues including our Venetian Coats arena, which can be utilized either for our nice business or major entertainment events. We remain fully committed to playing the pioneering role in Macao's transformation into Asia's leading business convention and leisure tourism destination. We have steadfast confidence in our future success. Our track record in being transformative pioneers in mice, retail and entertainment speak for itself. Now moving on to Marina Bay Sands in Singapore.
We delivered another strong quarter at Marina Bay Sands, which despite the impact of the stronger U. S. Dollar generated old normalized EBITDA of US411 $1,000,000 up 12% from the year ago quarter. As I mentioned earlier, on a constant currency basis, our whole normalized EBITDA increased over 22%. Both rolling and on rolling segments performed well.
Mass win per day was US4.8 million dollars When adjusted for the currency effect, our mass win per day was up by 8%. That strong performance was principally driven by the successful execution of our strategy to bring premium mass customers from throughout Asia to Singapore. As a result, we delivered another all time quarterly record in mass win per day in Singapore, Dublin. In the rolling segment, we enjoyed the best rolling volumes in any quarter since quarter 1, 2014. On a constant currency basis, rolling volumes were up 36% year on year and up 20% quarter on quarter.
In addition, we maintained a prudent accounts receivable reserve ratio during the quarter. Our company remains committed to leading the industry compliance. Now on to my favorite subject, the return of capital to shareholders. I'm extremely pleased to announce that the Las Vegas Sands Board of Directors has approved an increase in our recurring dividend program for the 2016 calendar year. The 2016 calendar Las Vegas Sands dividend will be 2 point $8.8 for the year or $0.72 per quarter.
This represents a 10.8 percent increase over the $2.60 dividend we are paying in 2015. We remain committed to the maintenance of our recurring dividend programs at both Las Vegas Sands and Sands China. And we remain committed to increasing those recurring dividends in the future as our cash flows grow. Our industry leading cash flows, geographic diversity and balance sheet strength enable us to continue these recurring dividend programs while retaining the financial resources to invest for future growth and pursue new development opportunities, yay dividends and yay buybacks. We brought back $80,000,000 of stock in the most recent quarter.
We have approximately $1,600,000,000 remaining under our current stock buyback authorization And we look forward to continuing to utilize the stock buyback program to return excess capital to shareholders and to enhance long term shareholder returns. I would also like to take the opportunity to welcome Mr. Wilfred Wong, who will join us on November 1 as President and Chief Operating Officer of Sheen's Channel Limited. Wilfred brings the distinguished track record in both the public and private sectors to Sands China. We are pleased to be able to continue to contribute to Macau's success in realizing its objectives of diversifying its economy, supporting the growth of local businesses, providing meaningful career development opportunities for its citizens and reaching its full potential as Asia's leading business and leisure tourism destination.
Finally, let me share that I'm extremely pleased about the depth and strength of our management team, not only in San Antonio, but in Singapore, Las Vegas and in Bethlehem, Pennsylvania. The strength of our team is clearly reflected in our ability to stay disciplined and continue executing our strategy in challenging markets. I want to thank you again for joining us on the call today. Now let's engage in Q and
Your first question comes from the line of Joe Greff. Your line is open.
Good afternoon, everybody. Hi, Sheldon. Hi, Rob. Good afternoon, Rob. I will start with a question on Singapore.
I thought Macau was kind of down the middle of the fairway. Single Poor, I thought that's where the biggest positive variance was relative to our expectations and forecast, both on the mass side and also on the VIP side. Can you and you talked about it a little bit, Sheldon, but Rob, maybe you can drill down a little bit what factors are driving, at least relative to our expectations the better performance there, what are you doing differently or better in the past, different sourcing geographically, that would be helpful to understand. Thank you.
Sure, Joe. The MBS store remains outstanding. I think the quarter reflects our dedication to all our business segments. The lodging piece held up very, very well, both ADR and occupancy. The retail piece actually grew year on year, which is exciting in these difficult times, China.
Our gaming business remains exemplary. I would caution you again, the VIP gets a lot of attention, but again, it's highly concentrated. We did quarter relative to the last 6 quarters. But the real star of the show, I think, in Singapore remains our non rolling table slot ETG performance, 63% margins, dollars 4,800,000 a day. To your point of regionalization, I think we benefit by being in a place that has Malaysia, Indonesia, Korea, Japan as neighborhoods.
And we're very pleased with the team over there, couldn't be more pleased. In fact. I see our growth getting better and better. Our magic number is still $5,000,000 a day, haven't hit yet. Currency adjusted, we're there actually.
So despite the foreign exchange headwinds, despite the problems in China, we have an annualized run rate of about $1,150,000,000 coming out of spots in ETG. It's a great business. It's not credit dependent. It's not China dependent. As Sean referenced, we dominate in that market in terms of ETG EBITDA split.
We're just very encouraged by the business. We see the trends getting more solid for us. A lot of skepticism around Singapore, but it's not China dependent. It's not high roller dependent. It's very sustainable and we're very proud of the results and the team over there has really executed where we want to be.
So very, very pleased with it and hope we can keep that momentum going in the Q4.
I think the discouragement or the pessimism about Singapore is based upon how our competitor in Singapore is doing. Can you imagine we're doing double the amount of business? It's 2 to 1 that they're doing. We own 65% of the market. I attribute that to not only a location, quality of the product.
And the most important thing is that Genting has never operated in a competitive market. We have never operated anything but a competitive market. So we understand how to compete a lot stronger than our competitors how to compete. So I think the fact that they're not doing as good as we are, we're doing twice as good as they are. Sort of you want to hold us in tandem with what they are doing and I think that's why I wanted to emphasize the word differentiated from the rest of the market in Asia.
I do think, Joe, that building is exemplary. Where it's at physically, how it looks architecturally, the food and beverage, the retail is pretty iconic. We're just very proud of it. And I think it's going to continue to do very well in the future. So all good signs coming out of Singapore.
Great. Thank you. And then for my follow-up question, again, not Macau related, but looking over the Las Vegas Strip, good RevPAR growth performance in the 3 created Q. What segments drove that and how sustainable are mid to high single digit RevPAR gains going forward? And that's really it for me.
Thank you.
Yes, we're proud to say it's our best quarter in Las Vegas since the difficulties of 2,007, 'eight. It is a real strong quarter from any perspective. But the star here is the lodging piece. We did 2, 2, 2 and ADR at 96%. It's a record quarter for us on normalized basis plus $100,000,000 in EBITDA.
The gaming piece held up pretty well. But again, the star here is going to be the lodging segment, which is getting stronger. We see support from all the group segment, FIT, very encouraged by Las Vegas right now and it's our lodging business. Gaming continues to be very competitive. Slots did okay, nothing spectacular.
Our table jobs are affected somewhat by the downturn in the international play. But overall, our drop is $600 plus 1,000,000 strong third quarter. Just very encouraged by what we're seeing in Las Vegas from our perspective. It's not been last couple of years as strong for us. We're seeing a return to a better time.
And I think the group business has been exemplary in helping drive some of that compression of rate. So very excited about RevPAR and overall lodging trends for our properties here in Las Vegas.
Thank you.
Your next question comes from the line of Felicia Hendrix from Barclays. Your line is open.
Hi, good afternoon. Thanks. Rob, in the prepared remarks, Sheldon put you on the spot and said that you might talk about your continued ability to cut costs. So I was wondering if you could do that and just how we should think about the ability for you guys to continue offsetting the negative operating leverage as the operating environment continues to stay challenging?
Sure. Well, obviously, it's proven we can operate in what is a very difficult environment in the Cowal right now that the VIP erosion and the continuing softness in the mass. We're down year to date about $170,000,000 year on year. Our goal is to get to 2.30 $240,000,000 annualized. The cuts come from everywhere.
It comes from about 30% derived from payroll, about 25 percent from gaming reinvestment OpEx, about 25% from non gaming OpEx, about 20% from market entertainment. I think operate, Felicia. In this environment, we prove we can do it. But this year has been difficult, as you well know. And it continues to be harsh in Macao, but we can operate and keep doing this.
And we're confident there's more to be done there. But as you know, at some point, you cut into muscle and not just fat. And that's my concern is how much further we can go. The 900 pound grill in the room is to return to growth in the mass market. Our buildings are built for They're large room capacity, large gaming capacity, large retail capacity.
They're built for mass markets. We're built for today's Macau market. We're not frankly, we're not as strong high end. We've never been as strong. What Sheltonois prophesized unfortunately came true, there will be a downturn at some point in every market.
So we build better rooms, better retail, diversified product. I'm hoping as the mass market gets stronger, the cost cutting will be minimized. But if 'sixteen continues like it appears to be going, we're prepared to play in that arena. We are cost cutting across the board. It's not always easy for the team there.
I mean, they've done a very good job of doing it, but it can continue and we can go deeper and harder. And again, it's derived from all parts of our business. It doesn't rely on any one segment. So unfortunately, that's where we're at. We still think we make a lot of money in Macao, it will be a lot more fun and exciting if we can see a return to some growth in mass and premium mass segments.
So that's our Macau situation for today.
That's good. And also a good segue to my next question, my follow-up question, which is on the mass customer. Just looking at the statistics, obviously, the base mass win per table continues to decline. It's at a slower rate. Sheldon mentioned that it's stabilizing.
But Rob, as we think about the competition that's coming online and the continued pressures that the customer is seeing from the market, from the government, where do
you see the base mass statistics settling out?
And can you describe the casino continues to decline, but is it their entire budget down or are they just casino continues to decline, but is it their entire budget down or are they just spending less in the casino, but increasing their spend on non gaming activity? So again, like where do you see the base mass statistics settling out and how is the customer what does the customer's budget look like?
I think you have to be careful when you say base mass. It's very confusing. We all know the junket piece where that's at and that's pretty simplistic. We can see that very black and white. Mass is more confusing because I believe that base mass business hasn't really changed that much.
What has changed is the premium mass. When you put that together and that equation becomes base and premium mix together, the fall off in that customer of fleece has been in the premium mass. My opinion, the base mass customer is holding up pretty well. I think you're seeing some stabilization there. Where you're not seeing growth, you're not seeing return is more premium mass mix in there.
Think of it this way, you walk into a high end store in New York City or Las Vegas, you walk into a high end retailer and you'll not necessarily see a lot of customers there, but you see 3 or 4 a day that might make a huge purchase. And that's what happened in Macao. You lost a lot of these premium mass customers that were quasi junket, quasi direct play, and that customer base has eroded. And until that customer is back, I think you're going to see a very slow return to a year ago. And I think the pure base mass customer loses $1,000 or $500 a day.
If you go to Macau, it looks very busy over there. They're alive and well, especially weekends and holidays. So I think the real softness here is a derivative of the junket play somewhat. It's that same person affected by economy, anti corruption, liquidity, union pay, smoking, I think it's the same story to extend. Again,
we need
to see that segment returns for Macao to improve and get brighter and happier over there, you need to see a return to more premium mass customers. I believe our base business actually pretty good. Our rooms are pretty good. Our gaming business is holding up okay, but we're not getting that 5% or 10% of the population that drove extraordinary amounts of gaming win. And that GGR took us back.
I think the cow will continue to be difficult. And that's how I don't think it's base mask, I think it's premium mask when you mix them together.
Maybe we could talk about this offline, because I know my time is done here. But in your chart you showed base mass since the Q2 of 'fourteen is down 18%. It's continued to decline sequentially. So I was kind of referring to that market really specifically.
I understand, but I don't again, I think it's hard to be put on honest with you. I think for any of us, it's difficult to identify not to disagree with our charts because Dan made it must be perfect. But the truth is, it is hard. I mean, it's difficult to really differentiate at times and any operator in Macau can tell you this, it's very difficult to differentiate base mass, premium mass, what table. I'm not convinced that those charts don't reflect still a heavy smattering of premium mass mixed to a base.
I think from experience, anybody is over there who will tell you that it's so misleading because hard to identify exactly what is they don't hold up the signs on premium mass, on base mass. You're doing it based on our sample, our indications. I'm not convinced that our base mass business is down 18%. I think our premium mass business may be down more. That's where the softness is and continues to be.
I'm happy to take you offline and talk about it, but it's my firm conviction that you can't get every number right in the market that big. In terms of when you segment these markets, it's difficult. Junkets are easy. They're all in the same room. They're all playing in the same place.
Mass is much more difficult to really understand the segmentation. And we do know for
a fact that there are premium mass players that play in the geographic area that we're identifying here as they absolutely are in there and they contribute a piece of this. So this is illustrative only.
Our mass drop was up. I mean, our mass drop actually grew. And I think what I rely on more than sequentially, not year on year, but sequentially. I also rely on the people to work for us, and talk every morning. You listen to the dialogue and it seems to be more and more, we're seeing a lot of bodies, a lot of business in that building.
Those buildings, We're not seeing the better quality customers. That's what drives stable win per unit. It drives higher minimum bets. It drives the entire GGR. And that's where I think the weakness really is.
Our drop is I think we're doing okay in the base mass, but we're suffering on the premium mass side.
Your next question comes from the line of John Hull from CLSA. Your line is open.
Hi, good afternoon, everyone. Thanks for taking my question. Well done on raising the dividend to 2.88. My question is, I'm just trying to understand the kind of the implicit assumptions within what you guys are thinking as to what do you need to actually make maybe next year end in 2017? Or what are the hurdle rates of EBITDA that you think are crucial for you to generate in Macau and also in Singapore for you to be able to sustain the dividend?
And also the kind of thought process behind, how do you think or what your expectations are for the Parisian in order for us to kind of understand what kind of free cash flow could actually come out of this out of Macau and also for Singapore and North Africa sustain a $2.88 dividend? So John, let me start off and then turn it over to some of the other guys. But big picture, we don't give guidance, forward guidance. But our perspective and the confidence that we have in our cash flow and our ability to continue to grow cash flow in Singapore, Las Vegas, Bethlehem and over time in Macau is strong or we wouldn't have raised the dividend. And if you look out to 'sixteen next year, we're expecting that it could potentially be a tough year.
I think you got 3 new properties opening, but we're confident that when you go out 2, 3, 4 years, Macau will be a growth market again. There's a big underpenetrated market in Mainland China that the Perrine is designed to appeal to. And together with the P and L, we're going to have a very, very strong capability to generate increased amounts of cash over time and the increase in the dividend is reflective of that confidence that we have in the future.
John, it's Rob. I think to Dan's point, we have a lot of confidence in the Parisian being a product that will speak well to the mass business in the Macao market. We have a lot of confidence in Singapore and Las Vegas and Bethlehem to perform next year to levels hopefully exceeding to this year's levels. The big question mark obviously remains Macau. No one's confused about that.
And it's virtually impossible for us to tell you what we how to think about Macau. It's so unknown to any of us. It is the big question mark for any operator today. And we'll continue to do. We don't want to forecast what we think we're going to do.
We feel very confident about the Parisian performance, but it won't get open till best case end of the year Q4. So it won't be a huge contributor.
Not necessarily, Anthony.
No, Q4.
The end of Q3 and the end of Q4. So I think it's hard Getting to Q4.
Yes. It's hard for us
to sit here and tell
you what we think that number will be. We feel great about 3 of our places and MacAlban remains the question mark. And obviously, for us to take that guess today would be a mistake.
Okay, great. And if I could follow-up on a remark that you guys made signs of stabilization in mass. And I think to kind of follow-up on what you said earlier Rob about the base mass, which is something that's you think is quite flat and I think the impact has been largely on premium. What are your thoughts about the VIP market as it stands? Have we seen some signs of bottoming or do you think that this is still a market that has very little visibility as it stands?
Thank you.
Well, I think the numbers speak for themselves and the VIP market has gotten it is where it's at and it's not a pleasant place. I don't know what the catalyst would be to see VIP return. I do think there's hope for the premium mass to get better and that's where my hope resides. I think VIP, the junket models has such turbulence both yesterday and tomorrow that it's hard for me to see how that gets better. But I do think that premium mass customer can resurrect and we believe the base mass is stabilizing.
I still think the weakness is in the premium mass. We think that
the junket market is the one that's getting at the most. Our premium direct business is improving and we're getting some of those people that are not going through the junkets or that may have been going through the junkets before. And we built a relationship with them and we think the credit is good. We are very strict on issuing credit. So from our standpoint, we never went into the junket market as big as some of the other guys did because it wasn't our fundamental business model.
A fundamental business model is MICE based and that didn't rely upon the VIP market. When we first opened Venetian in Las Vegas, we only had it took us a couple of years to start increasing the amount of the maximum bid that we would take. We started off with $30,000 in maximum bid. And when we opened the Sands in Macau, we started off with about the same thing. We didn't go after the junket market.
It happened to our growth. And in Singapore, we don't we're not allowed to deal with Macau's junket reps with third parties and everything we do there is premium direct. So it's still going on and we're still having VIP players coming in. And look at the result. 2 thirds of the market belongs to us and 1 third belongs to our single competitor.
The mass market is what we were built for. Even though today in Singapore, we'll take as much as $1,000,000 a bet, dollars 1,000,000 a hand. And we're the only casino in the world who will take that. So I don't know, we're setting the pace for other people perhaps to do the same thing. So we're basically built for the mass market and that's why we have so many hotel rooms, so many so much gaming capacity.
We built it for that market and now we're achieving the results and the mass market is now the low hanging fruit for us.
Thank you.
Your next question comes from the line of Shaun Kelley of Bank of America. Your line is open.
Hi, good afternoon, everyone. Thanks for taking my question. I just wanted to maybe speak about Macau on a higher level. We've seen a lot of policy announcements in the market over the course of September in particular. And I was just sort of curious to get your thoughts on sort of the latest views as it relates to some of those, whether it be kind of the mixed tea leaves of junket regulation and union pay withdrawal limits versus the announcement from the Liaison's office about potentially doing some things to help out the gaming industry.
Sort of how are you guys feeling about the policy environment at Macau right now and how incrementally supportive do you think the government is likely to get from here?
Well, we have always been respectful of the Macau government's desire. When we first got in, we said we were going to bring in as part of our presentation to them, we said we're going to bring in national and international brands, which we have done. We brought in Intercontinental Corporation. We brought in Holiday Inn. We brought in the Hilton Conrad.
We brought in Sheridan. We brought in Four Seasons. We keep our commitment. If you talk to anybody in Macau, the current government, the former government and you ask which company, which of the concessionaires or sub concessionaires out there has followed the direction that the government has outlined. The answer is going to come up either LVS and then we changed our name to Sands China in Macau.
We have a belief that our gaming license in Macau is a privilege and not a right. So we do everything we can to develop and direct our properties toward the goal that the government wants, the diversification of terrorism. Look, we've got 10,600,000 square feet in 1 property, 13,000 room property, The Venetian in Macau and we've got 13,500,000 to 14,000,000 square feet of Sans Cote d'Ivo Central. You don't need that for a casino. The idea is to put in we are the pioneers of integrated resort business model.
That's what the Macau government wants. That's what we offer to the government and we will continue to do that. Obviously, we have we can always hope for things to be better, but we don't have control over that and we've got to respect. We're in China, let the Chinese decide what they want to do what the concession is. Again, it's our privilege, it's not our right.
So do everything we can to justify the getting the blessings from the Macau government. It's their government, it's their right and we'll do whatever they ask us to do.
Sean, we believe firmly that governments want to see Macau prosper and succeed. We are very fortunate to be there. I think Sheldon's history of Macau speaks for itself. 11 years ago, he opened the 1st modern era casino in the Peninsula, the Sands. It's made a lot of money for this company.
It's opened doors up for all kinds of people, made lots of money in the Peninsula. He then 3 years later spent at that time in a record breaking $2,700,000,000 2.4 $2,400,000,000
I forgot. No, the $2,700,000,000
is the place. 2.4 at the Venetian and opened up the doors to Cotai. At that time, no one believed Cotai was viable. Today, for the first time, if you look at numbers, Cotai exceeds peninsula and there's a GTR. The point we're making is we're lucky to be there.
We've done very well there. We've been good partners with the government and we believe strongly in the future of Macau. And we're fortunate we opened a new building up next year and we hope for a lot of success. But I think you look at the actions of the company, the success of the company, the prophecies of Sheldon, look at our $13,000,000,000 capital spend that tells you how we feel about Macao.
Perfect. Thank you guys both for the color. And I guess sort of as follow-up, same theme would be we're starting to get sort of more questions from investors about the concession renewal process. And as we move into late 'fifteen, from I think what we last heard from the government, they were going to be sort of an evaluation phase. I was just curious, do you know if that dialogue is ongoing and or where things sit today as it relates to that?
Any update or thoughts on when we might hear something more on that?
To the best of my knowledge, I haven't. I read the clippings from both here and in our SCL PR and Government Relations Department. I haven't heard a word, haven't read a word, haven't heard a word about the midterm evaluations in Macau. So as far as we know, if it's happening, it's they're not publicizing it. And if it's not yet happening, they'll be getting to it.
It will happen when it happens. Our worrying about it doesn't advance it any further. They'll do what they want to do when they want to do it. Perfect. Thank you.
Our concession expires in 'twenty two. That's still 7 years away.
Perfect. Thank you very much.
Your next question comes from the line of Thomas Allen from Morgan Stanley. Your line is open.
Hey, how are you? So Studio City is open in Macau in 5 days. Just wanted to hear your latest thoughts on how you expect the property to impact the market overall? And are either you doing anything differently to benefit from the new opening or are you seeing others doing anything surprising? Thank you.
No, we're not seeing it. We're not doing it different at all. We've run our business as we have in the past, Thomas. But we're hoping that NELCO and Galaxy just bringing business to Macau. We're hoping for the success obviously.
We are all in this together. We need to see Melco do well. We're rooting for them. We're big fans of what they've done in the past. Big fans of Galaxy's new building is excellent.
So we're cheerleaders here. We're rooting for these guys to make lots of money and bring business to Cotai. We are happy to see Cotai continue to evolve and be the deep footprint in Macao. We're happy to see the GCR crossover, now the Cotai exceeds the peninsula. And we're just looking for more and more success for all of us, because let's face it, this is a rising tide will carry all the boats.
So, a great opening, a great looking building from there.
Competitively, I think that our Parisian theme building, we just topped off the Eiffel Tower. It's going to be a fantastic attraction, fantastic. And I think this is what the market wants. But why is the Venetian a must see property? Because it's something they can't see anywhere else.
I saw a design yesterday of the Studio City and they have an 8 shaped Ferris wheel. Couldn't figure out neither could our development department figure out if the top half of the circle connects to the bottom half.
I don't know. He's looking for a free ticket.
I'd be happy to pay for it, but they didn't have change of
abating. And then just as a follow-up, just a clarification around Singapore. Rob, I've heard you say a few times now that you don't you think people think that misunderstand that the property is not Chinese customer dependent and you really draw a lot of your customers from across Asia. Should we take that to imply that you're seeing declines in Chinese play or is it and then strength in other regions and maybe local business or?
Yes. Good question. Well, let's begin with us by segment because it's a complicated question. Beginning in the high end, we are seeing declines visitation on the very high end customer for the gaming segment, the rolling customer out of China has diminished a number of lack of demand. Also, we're watching our credit issuance there.
So just like Las Vegas has been adversely impacted by the issues in China, we're often in the very high end. However, what we have seen in Singapore, to your point, is regionalization. And on the rolling business, again, I always caution you, as you know, it's concentrated. It's not 2,000,000 customers there. So it's heavily concentrated.
But we've seen great success out of the region and that being Indonesia, Malaysia, some Chinese, some PRs, some people live in Singapore who are Chinese nationals or have a current residency. So, yes, we have not been China is not growing in Singapore for us, probably in decline in the high end. But the more important part of our business there is not Chinese dependent. That is the non rolling slot ETG segment, which has never been Chinese dependent. It's mostly people in the region again, it's Indonesian, Malaysian, Korean, Japanese, and that's been the pleasant surprise we've maintained and grown that segment and has never been dependent on Chinese visitation.
I'm also pleased our retail sales in the luxury segment in Singapore are actually up year on year again despite the downturn in the cows retail environment. So clearly, we're in a different place in Singapore. The region at this point has not been as impacted by China as it has been in the cow. So depending where you look, our retail business is improving, even the luxury, even the very high end, high street stores doing better, single digit year on year increases. Our rolling business is okay.
It's acceptable. But again, the real strength of that building was people just can't seem to accept is we're not trying to depend on the slot ATG non rolling. That is the powerhouse. That's the $1,100,000,000 $1,200,000,000 that drives that building to these kind of numbers. And I don't think that's China dependent at all.
We do get some Chinese play, but again, the regional aspect of that customer segment is very strong and growing. The exciting part for our team over there is we keep finding more $20,000 $30,000 $40,000 gaming customers out of those neighborhood neighboring countries. So I guess you say we're not China dependent. We like Chinese business. It's been good to us in the past, but right now it's not the driver of Singapore.
Helpful. Thank you. Thanks.
Your next question comes from the line Carlo Satarelli of Deutsche Bank. Your line is open.
Hi. Thank you, operator, and good afternoon, everyone. Sheldon, as you think about your Macau collection of assets today, obviously Parisian coming on in a year or so, When you think about the new supply that is coming to the market and having had a lot of experience dealing with new supply and the way competitive dynamics change, do you guys feel some of the work you're doing today on the cost side will mitigate some of that? And furthermore, are you seeing any evidence or getting the sense that folks will have to be more promotional as some of the new capacity comes online?
We're always going to have to be competitive, be sensitive to whatever new capacity. I believe that the new competition will have to be in order for us to be cannibalized, It would have to be a better thematic posture than what we have. We still believe, first of all, we're putting up pedestrian bridges that will connect all our properties. We'll truly be the Cotai Strip when we'll be able to get 13,000 hotel rooms without walking outside. So we'll hit 5 or 6 casinos, depends how you count the casinos in Sansco de Aceto without leaving the building.
There are and there will be in the pedestrian bridges going across the Strip moving sidewalks. We have like 30,000 people a day crossing in both directions and that's quite a traffic, Peter. I think that the Parisian with its unique theme will be highly competitive And I think we'll have the 3rd must see property in Macau, the Venetian, the Sands Cotai Central and the Parisian which will be major attractions. And I think from a competitive standpoint, I don't think the other properties, although as Rob said, we're rooting for them for all of them to be successful. I think that the Studio City will be a little more competitive because it's a different look.
People want to experience a different look. We happen to think that the geographic positioning combined with our fundamental basic MySpace business model will be very successful. We're looking at over 3,000 units and there is one of the other 5 properties that are building as many as 2,000 keys. So we're building approximately 2 keys for every key a competitor is building. And we think that our the uniqueness of our geographic theme, particularly I tell you we just topped off the Eiffel Tower and I got to tell you look at that and you'll see a very, very attractive thing.
So people, when we first opened Singapore and the SkyPark, it was built the MBS was built adjacent to the Singapore Ferris wheel, the Singapore flyer. As soon as we opened and we had a separate set of elevators and we charged SGD20 dollars for people to go up there. It killed the Singapore plant. They went into bankruptcy because people would rather do more than just take a Ferris wheel ride. They want to have an experience at the top and I think the I thought I was going to give that to them.
So it isn't just that there is competition out there, it's the quality of the competition. How competitive is it and how does it meet the needs and the aspirations of the mass market? I think that look forget about the issue of market share, although we're happy to be at the top end of the market share, I can't deposit market share in the bank. I can only deposit EBITDA and nobody has even approached us in the last 11 years since we opened in terms of EBITDA. So that's what really counts.
I could put EBITDA on the bank. And we could be highly competitive regardless of how many properties they open. If you don't ever open a property that is sensitive to the needs and to the aspirations of the customer, you can build 10 competitive places and we're still going to do well.
Understood. Thank you.
We have time for one more question. Your last question comes from the line of Robin Farley of UBS. Your line is open.
Okay, great. Thanks. I wonder if you could give a little bit of color around, there's a big occupancy decline of Venetian Macau and I don't know if that was intentional to lower occupancy to eliminate some cost. I'm thinking it was not. But how should we think of the decline in RevPAR and rate and occupancy both given the hotel supply coming into the market over the next few months?
Rob, and it's Rob. It wasn't unfortunately, it wasn't planned that way. There was no grand scheme to knock occupancy rate down. It just fell. As you well know, that market is adding rooms quickly, both from actual bricks and sticks being built, as well as the junket transition as people stop getting away with the junkets.
There's more and more rooms in the market. Mid-80s is acceptable, but we have work to do in Venetian. We also have some CapEx plans for some of the room product. But no, it's not planned. It wasn't to save costs, it's simply we did not have the demand we want to have, plan to fix in the future.
Venetian is still the only $1,000,000,000 property left I think in Macao, from what I can tell based on run rate to this quarter. I hope that's changed in the future, people getting $1,000,000,000 run rates out of properties. But Venetian had a weak quarter in terms of occupancy rate, had a good gaming quarter.
We had 89%. August was 84% in the 80%. 89%. I think it was
the mid-80s. No, not here until they go. Okay. Good. So the point is, Rob, it wasn't planned.
That's not how we want to do our we want that rate to go back up, when our occupancy go back up. We are trying to keep our rate higher than other people in town. There's a lot of slippage rate capacity. I think the junket, the transition from giveaway rooms, comproves, the junkets down to cash rooms is an issue for today and tomorrow. I do think Cotai will get stronger.
We're excited to see we're going to go over and see the new Melco product next week or 2. We're excited to see what Steve Wynn does in the spring. And I do think that demand for Cotai is going to continue to grow and grow. We're still the biggest footprint in Cotai. And so I think it's going to be very competitive, very positive in the end for the Cotai area.
But no, that wasn't planned. We need to improve our numbers, both from rates and from an occupancy perspective. And that's the truth.
Maybe just as a follow-up to that, I know that the market, there's not a lot of forward visibility in terms of room bookings, but just from what you do see past October 27 next week, is your early read on sort of those first two weeks after that, that it's helping occupancy with your property or not necessarily yet?
I don't see any I don't have any insight at this point. It's too early to tell. But I think it's again, I'm a big believer that this Cotai area, when you get Mr. Wynn there and you get Lawrence Ho and these guys building these multibillion dollar properties, you're going to see a lift for all of this. I really believe that.
I believe it may come at the expense of the Peninsula. I think the must see products will be reside on Cotai. I think it's positive. Sheldon's comments about Parisian, I couldn't agree more. Parisian will be a must see iconic theme building, which I think Macau responds well to.
So we're very pleased to be on Cotai with great buildings. Does Melco help us short term? I don't know. Does it help us long term? I believe it does.
I believe it helps all of us. We have to win this thing together. We need to see GTRs grow, VC Visitation grow, VC Premium Mass grow. Our company is different than others in a lot of ways, the one thing we do have is differentiable and continues is scalability. We have bought more rooms, a lot more retail, more gaming opportunities.
So we need more visitation, we need more better customers. And I think the more that Cotai area grows, the more it benefits this company. So again, we're believers in Macau long term. The visitation, the penetration of mainland to Macau remains sub 2%. The infrastructure improvements keep coming.
We believe the government is sincere and they're believed to see Macau succeed. So whether it's this week or next week, we're thinking long term big picture that Cotai does very well. And again, it's the biggest player in Cotai by many rooms and many gaming opportunities. We're going to be the biggest beneficiaries. So, that's it.
Okay,
great. Thank you. Thanks.
Thank you, Rob.
Sylvia?