Good afternoon. My name is Chris and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Las Vegas Sands Corp First Quarter 2015 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
Daniel Briggs, you may begin your conference.
Thank you. 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 and potential results.
In addition, we may discuss adjusted net income and hold normalized adjusted net income, adjusted diluted EPS and hold normalized adjusted diluted EPS and adjusted property EBITDA and hold normalized adjusted property EBITDA, all of which are non GAAP measures. 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 this 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 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 an opportunity to participate. With that, let me please introduce our Chairman, Sheldon Adelson.
Thanks a lot, Dan. Good afternoon, everyone, and thank you for joining us today. I'm pleased to report that we continue to execute our strategic objectives during the quarter. And despite the continuing challenges in the Macao market, we delivered a solid set of financial results with company wide adjusted property EBITDA reaching US1.51 billion dollars At the same time, we continue to return excess capital to shareholders. I know you're waiting for me to predict whether we have reached the bottom in Macau and whether next quarter will get better.
But it's very hard to do so right now because we are sailing in uncharted territory, at least for the short term. It reminds me of the fellow that a joke had said, it's very difficult to make predictions, particularly about the future. Our job is to set the right strategy so that we can grow and prosper for the long term in spite of the current challenges, contribute to the economic development of our host jurisdictions and at the same time ensure the company can weather any cyclical storm across the business cycle. But I want to tell you that I am today as confident as I ever been in a long term outlook for the Macao market. Our unmatched financial strength enables us to stay fully committed to our markets and our development plans, while continuing to return significant amounts of capital to shareholders.
To put it plainly, we will invest in our existing portfolio. We will search for new development opportunities very aggressively. And we will pay generous recurring dividends, which we have every intention of going over the next several years as our business and cash flows continue to grow. I can say that we're targeting at least a 10% growth in each of the next 3 years. Today our company that's in regular dividends.
Today, our company enjoys a strategic position in our industry. First, we alone have the true business diversification, which derives from our convention based integrated resort business model. 2nd, we are unique in having the critical mass of integrated resort assets that can capture the long term tourism and consumption growth in Asia. And third, only our company has the privilege of operating in the 2 biggest gaming markets in Asia. Talk to anyone who is familiar with the markets in Asia.
We are in the pole position to be selected as the preferred developer of new integrated resorts as and when other markets in Asia open up. My commitment to invest in Macao's long term future has been and will continue to be unwavering. Let me be specific. 1st, not only when we were to complete our St. Regis and Parisian projects in Macau as expeditiously as we can, we are also as eager as ever to develop additional resort and non gaming facilities beyond the completion of these two projects.
2nd, we will continue to lead the charge in the economic diversification of them. In particular, we will continue to be the pioneer in developing the highest retail, hotel and entertainment industries. Remember, we were the first ones to develop an integrated resort at Cotai, when everyone else was roundly ridiculing us and telling us they couldn't even spell Integrated Resort. Our business model has since been validated as each and every one of our competitors has tend to emulate us. I say attempt because they all say if they put in a hotel and a casino they have in a couple of restaurants, they have an integrated suite.
We have 8 or 10 different major entertainment and traction components that are unmatched by anybody in Macau, unmatched. And everybody says, oh, I'm going to put in some more shopping, I'm going to launch my lobby and I'll put a couple of stores in there, a couple of gift shops and then I'll be in integrated resort. I'd like to say that the description of an integrated resort is somewhat different than ours. 3rd, we will continue to invest in the training and development of our employees. I would like to elaborate on each of these commitments.
With respect to development projects and our master plan for Cote D'Ivo's trip, I believe these remain critical in supporting Macau's goal of becoming a world class leisure and tourism destination. There's been a lot of debate recently both in Macau and Hong Kong concerning the ability of these cities to accommodate the growing number of tourists and the impact of tourist growth on local residents. I believe our MICE based integrated resort model provides a winning formula for accommodating long term tourism growth for Macau, while minimizing disruptions to local residents. With the completion of St. Regis and Perrigine, we will have almost 13,000 hotels in more interconnected resorts, interconnected.
You don't have to leave the building to go from 1 to the other. With the potential of and there's over 8 40 stores across 4 shopping malls with the potential to have several 100 more in new developments projected to come in approval. 2,000,000 square feet of meeting and exhibition space and 4 performance venues including Havanese and CoDI Arena, which can be utilized either for our most business or major entertainment events. All of this and more under one roof. Nowhere else in Asia can you step out of your hotel room and walk down the hallway through a door and into an arena.
The visitor to any of our resorts can enjoy the full spectrum of non gaming user amenities without ever stepping outside of our buildings. In quarter 1 this year, our hotel occupancy in Macau was 83%, which meant we had around 7,600 occupancy rooms per day and more accurately for Nice. With completion of the same regions in Parisian, we will have nearly 13,000 keys. So we will have capacity to grow our occupied room nights by another 5,000 per night. That of course represents very substantial growth in tourism capacity.
The key is to attract and grow the number of overnight visitors and accommodate and entertain them in our COVID-nineteen integrated results. That to me is a triple point good for us, good for Macau and good for our customers. As you're probably aware, there will be a mid term review of the gaming concession this year and it's important to recognize what we have accomplished in each of the key categories of the review over the past decade. So let me now talk about our commitment to promote economic diversification in Macau. I've tried to find a more modest label for our role, but I think nothing describes a better than Pioneer.
Developing the non gaming industries isn't just about building the hardware, although that is unquestionably essential. It requires strategic planning, operating know how and the commitment to invest in the human resources to grow and operate these businesses. While it's become fashionable for everyone to talk about Macau's diversification in gaming, we're delivering all aspects of diversification over the past decade. I'd just like to say that if you calculate our the ratio of non gaming to gaming, it's about 97% non gaming space and about 3% of every gaming space. Size.
Take nice for instance. The overall return rates improved from 1,200,000 attendees in 2,009 to 2.62%. Our Sands China subsidiary, a tonne for 80% of that growth as we increased from 614,000 attendees in 20 9 to 1,800,000 in 2014. We are the global experts in mice, and we're looking forward to help take the mice industry in the car to the next level over the coming years. In the hotel segment, most of you know that we have more hotel rooms than all our competitors put together.
But more than that, we actually sell our hotel rooms to drive new and more diverse group of visitors to account rather than simply assigning them to casino patrons. We estimate we accounted for over 80% of the cash rooms sold on Cotai in 2014. Based on our recent customer research surveys, around half of our cash paying hotel gas emanation are first time visitors to Macau. To me that is a very healthy demand indicator for Macau as a destination and furthermore the enduring attraction of the Venetian. And this has always been a key part of our strategy to help Macau become a world class tourism destination.
Build iconic integrated resort destinations to attract new visitors to Macau. In retail, our 3 retail malls generated US2.5 billion dollars of retail sales in 2014. That's almost as much as all the lives of key executives spent. Up 12% year on year versus an overall Macao market that was up by 1% and more than 3 times what they were in 2010. To put this amazing statistic in context, at 2,007, the total retail sales of Macao were less than US1.8 billion dollars And we didn't just build the high end luxury brands, although we do have one of the most successful luxury retail malls in the world as of all seasons.
I think that's a little misnomer. I think we have the most successful luxury retail mall as measured by sales per square foot, over $7,000 sales per square foot. We built an interconnected retail destination that would appeal to visitors across the whole spectrum. Our retail mall sales accounted for about 40% of total retail sales in Macauley. In the retail categories of which our malls have a presence, with the rollout of mall retailing of Sandsco does central at a complementary portfolio of tenants at the Parisian, which is now 95% committed, We look forward to further supporting the growth of Macau's retail industry as we drive more visitation by leveraging our unique portfolio of integrated retail malls.
In entertainment, we have established a real track record of bringing and delivering world class entertainment events to Macau. This quarter, in addition to Keto Pop concerts and the Zhou Ximing World Title Fight, we ran the famous West End musical, Cats, for 13 shows elimination theater. The show achieved 84% occupancy and we will be bringing another Broadway act Beauty and the Beast for the summer. Again, this is an area where we have made a pioneering contribution to Macau's diversification. First, we built the hardware, the multiple performance venues that allow for staging a whole variety of events, but then we also follow through with the strategy and invested in the expertise to bring the entertainment content to become.
Look at our workforce today. More than half of our team members, around 15,000 of them, work in the various non gaming business lines. That's more than a combined total number of gaming and non gaming employees of 2 of our major competitors. That leads me on to our commitment of training and promotion of our employees. Last week, I was in the kind of design over the launch of the Sands China Academy.
Representatives from various higher education institutions in Macao were also present at the event. The Sands China Academy brings together under one umbrella all the various education, training and development initiatives and programs that we have pursued over the past decade. In 2,008, we established the Adelson Advanced Education Center, located within the Venetian McDonald. This is not only as the primary training center for our employees, but also as an off-site campus for the University of Macau. Over the past 3 years, we have had over 80,000 participants in training courses in the Adelson Center.
And we are the only property in all of Macau that has an opportunity training center for the members, the only one. 2018, we also set up the same Retail Academy with the aim of providing service training for retail professionals and retailers including Gucci, Louis Vuitton, Tiffany, Bvlgari have participated in the program. This is not a program for our team members. This is to develop the local employees of our retail mall tenants to attain service levels that are consistent with global best practices. This again demonstrates that to support the development of non gaming industries in Macau, not only have we invested heavily in the hardware, we've also invested heavily in human resources and we're committed to continue to do so.
Not only will we continue to invest in local talent development, we will also continue to support local businesses. Last year, the US1.6 billion dollars spent on procurement, around US83 billion dollars was spent on local supplies. As the originator of the Cotard Strip development, now is not the time to pull back on any of these critical commitments. We will stay fully invested in Macao for the long term. We're committed to playing the pioneering role in Macao's transformation into the world's leading business and leisure tourism destination.
Our track record of being transformative pioneers in multiple jurisdictions speaks personal. But don't forget also our track record in staying the course. We have been tested by much stormy weather in our company's history. You can say that. You want to say it again?
Say it again. Yes. Today, our company is financially stronger than it has ever been. Remember, we are the pioneers and creators of the large scale MICEF based integrated resort. As a result, we have the diversity of product offering and the scale and critical mass that catered to every type of business and lead your business.
This clearly positions us well for future long term growth, but these attitudes already allow us to out earn our competitors as we always have. We're in means something on the bottom line. Indeed, the gap between our company and our peers has been widening for 2014. We had a 35% EBITDA share in a 6 operator market in Macau, up from 32% in 2013, reflecting the strength of our MICE and retail driven integrated resort model. In my quick calculation, it looks like we've doubled our fair market share.
In Singapore, we have around 60% EBITDA share in a duopoly market. Not only are we uniquely licensed in the 2 largest gaming markets in Asia, we are also by a very wide margin the profit leader in both markets. In addition to being more profitable and enjoying superior diversity of earnings, our integrated resort business model also allows us to contribute more meaningfully to the long term economic success of our host jurisdictions, something we are both eager and uniquely well positioned to replicate in new markets. Now let me take you through some of the highlights of our results in in Macau for the quarter. For quarter 1, Sands China adjusted property EBITDA was US531 million dollars The significant year over year decline in gaming revenues, especially for VIP and Premium Mass segments, were obviously the primary driver of year on year decline in EBITDA.
When compared to quarter 4 2014, the rate of sequential decline in our non rolling win per day in Q1 has narrowed to 6%, within which the base mass win per day declined by only 4%. Moreover, our operating margin in mass gaming was sequentially flat in quarter 1, as our effort to reduce casino reinvestment costs was able to offset the margin impact from the planning programs. While I have talked at length about our commitment to stay fully invested in McAllen as it relates to human resources, our capital expenditure and also our commitment to market and draw new visitors to Macau. I am mindful that we also need to ensure that we maintain a keen focus on cost and efficiency. Rob will address this area in a more detail later.
So one example whereby we have adjusted the structure given the changes in the marketplace is to reduce our casino patron reinvestment costs. The decline in gaming does also of course start to embed some of our gaming segments. Our non gaming revenues for the quarter declined by 4% year over year as that our overall property visitations. Instead of saying the glass is half empty, why don't we say we kept 96% of the business that we had? Sounds like good number to me.
Our non gaming revenue for the quarter declined back 4% year over year as did our overall property visitations. Based on the latest published government statistics, overall Macao market hotel occupancy declined by 11 percentage points in February compared to the prior year to around 8%. And overall number of hotel guests in Macao declined by about 10% compared to February of the prior year. Our hotel portfolio was at 88% in February compared to 80% for the overall Macau market, up about 10% looks good to me. The scale of our hotel room inventory remains one of our keys to teaching advantages.
It allows us to target higher value open eyed visitors from Greater China and the rest of Asia and to grow the base of high value visitors. While the mix between casino and cash customers has changed somewhat due to the decline in high end gaming, we alone have the inventory, the result content and the operating experience in selling the rooms and grow the market significantly. Paying hotel guests do engage in some gaming activity and an overwhelming majority of them spend significantly on shuttle. I'm proud of the fact that we produced more non gaming revenue than the other 5 gaming operators combined. Our share of gross Macau wide non gaming revenue was 57% for 2014.
Of course, it's more than the other combined. They only have 43%. The important point is that our strategy remains unchanged. Our business will continue to be anchored around the mass market and the long term structural growth of tourism from China and the wider age in regions. I have every confidence in our ability to continue to grow over the long term.
We have a still under penetrated market. We have improving transportation infrastructure. And we, Las Vegas Sands and Sands China have a uniquely differentiated portfolio of properties and product offering in Macau. Now moving on to Marina Bay Sands in Singapore. We had another strong quarter at Marina Bay Sands, quite to the surprise of an analyst report I read last night that said we were going to earn only $333,000,000 We had another strong quarter with adjusted property EBITDA of 415 $1,000,000 while full normalized EBITDA was US371 $1,000,000 Despite a 22% decline in rolling volumes, our whole normalized EBITDA was down by only 2% year on year.
On a constant currency basis, the whole normalized EBITDA was up 3%. I think this again just demonstrates the quality and resilience of the cash flow generation at Marina Bay Sands. I'm extremely pleased to say that our strong financial results confirm that we have an outstanding business To quote Mark Twain, the rumors of Singapore's demise as a world class integrated resort destination are both greatly exaggerated and certainly premature. Mass win per day was 4 point $7,000,000 up 1% year on year. Again, when adjusted for the currency effect, our mass win per day in Singapore dollar term was actually up by 6%, principally driven by our successful efforts in bringing in firearm premium mask customers to Singapore, particularly in the non rolling table segment.
Q1 was in fact the all time quarterly record in mass win per day in Singapore dollars. In addition, we have maintained a prudent reserve ratio during the quarter, and we will continue to maintain the highest compliance standards in the industry, not only in Singapore, but globally. Marine site for emerging jurisdictions that are considering large scale integrated resort developments. The iconic appeal of Marina Bay Sands has driven strong growth in visitation from residents of China, Japan, Korea, Vietnam, Thailand, the wider Asian region and around the world to Marina Bay Sands and Singapore. We remain focused on potential development opportunities in Japan, also Korea and Vietnam.
We believe our unique convention based integrated resort development model could bring meaningful benefits to those countries in terms of business and leisure tourism, employment and economic growth. Let me also touch on Las Vegas. I want to welcome George Marcantonis as our new Property President for the Venetian and Palazzo as well as the Sands Expo within Las Vegas. We believe there is significant opportunity to improve our performance here in Las Vegas and George is going to be an integral part of that effort. Now on to my favorite subject, the return of capital to shareholders.
The confidence we have in the strength of our business and the reliability and predictability of our cash flows have allowed us to progressively increase the return of capital to shareholders. Ours remains a uniquely privileged business model. We can continue to return financial strength to pursue both organic growth and new development opportunities. Over the last 13 quarters through March 31, 2015, we've returned nearly US10.5 billion dollars to our shareholders through dividends and stock buybacks, including US8.6 billion dollars to Las Vegas Sands shareholders and in Hong Kong dollars the equivalent of over $1,850,000,000 to the shareholders of Sands China. For 2015, as previously announced, the Board of Directors has increased the LVS dividend by 30% to $2.60 per year or $0.65 per quarter.
The increase in the dividend will take place with the next quarterly dividend payment, which will be made on June 30. We have every intention of increasing the dividends in the years ahead as our business and cash flows grow. We have approximately US1.76 billion dollars remaining under our current stock buyback authorization. While we did not repurchase any stock in the most recent quarter, we most certainly look forward to continuing to utilize the stock buyback program to return capital to shareholders as we have excess capital to return in the future and to enhance long term shareholder returns. In conclusion, we will continue to stay disciplined and execute our business plan.
With the right strategy and the right management team in place, I'm more confident than ever at our future success. Now let's now take some questions.
Thank Your first question comes from the line of Joe Greff from JPMorgan.
Your line is open. Good afternoon all. The margins I have a question for you on the margins. Macao, so it's a couple of one part question. But the margin Macao were below what we were forecasting and we completely get and understand that Macao is presently very challenging.
Were there any one time expenses such as a large bump in the provision for doubtful accounts or maybe expenses that you would describe as yield experimenting where you're trying to optimize revenue mix that maybe didn't work out that maybe aren't there going forward? In other words, do you think margins are sustainable from here from here? And what can you do to manage or reduce controllable expenses in this environment?
Joe, it's Rob. I think as you know market changes in the Macao have been sudden and dramatic. I mean 6 months ago this was a high growth market and now obviously it's down as much as 40%. And our business in Macao is not just the biggest in the market in terms of financial profit and number of employees, but also most complex and multidimensional. We are a strong believer in the long term outlook in Macao.
We welcome some of the structural changes taking place. It will help make it a more sustainable healthier market over time. And we're going to stay invested in Macao for the long term and therefore make some adjustments to our business and there's a cost and efficiencies. We have to balance multiple constituencies fair to our employees, support the government of Macao and making Macao a world class destination also satisfy the shareholders. And we've invested so much in human resources and operating capability in many business lines, not just gaming, but hotel, entertainment, retail, F and B, MICE.
So we're trying not to have a quick short term knee jerk reaction to make a careful assessment of what's right for the business long term. So when you invest and develop all these non gaming businesses on a large scale, you do incur more fixed costs than our competitors. And we believe this is the right thing to do in the long term. That being said,
we have to assume for
the time being there'll be no recovery in gaming for the balance of this year and we've made some tough decisions next 6 to 12 months to improve margins. That being said, there's nothing particular for this quarter. We're somewhat hoping for a little more recovery in the top line. We continue to assess the opportunities on the cost side and to improve our business. We did as you know, we'll single out on the junket situation.
We don't we're the only people in town not doing foam bedding, which did hurt us somewhat I think in segment. Otherwise, it was business as usual and we're trying to navigate our way through what is a very different market than 6 months ago.
Okay. And then my second question go ahead Sheldon.
Hi, gentlemen. Thanks. The things to me like in the 1st 3 months of the year like the figure 39% sticks out. And if it's consistent over 3 months and it continues another couple of months, it would not be unreasonable for somebody conclude that a bottom has been reached. Now I can't say that that's the case because as I said, we're sailing in uncharted waters.
And I hope we don't sink like that brought up in the Mediterranean.
And just to Just got
a new vote, I don't want to Final comment on that. The margin It kind
of looks to me
like we've hit bottom. I mean, it's not so erratic that it goes like from 30% down to 50% down. It's staying within the 39%, 40% range. So it gives me a more comfortable feeling that this is this should be the turnaround point. But then again, I'm not the analyst.
And your math business also between the Q4 and the Q1 had consistent margins just below 40%. The quarter on quarter impactful
about $40,000,000 and about $40,000,000 and like just about $40,000,000 So Q1, Q were definitely about 15% 16%, Q1, 2015% to Q4, 2014%.
Got it. And then my follow-up question relates to the dividend in the U. S. If we're at this level of quarterly Macau EBITDA generation of $530,000,000 or something lower, Do you have any qualms delivering of your balance sheet presumably at 5 Macao obviously to sustain the current U. S.
Dividend of $2.60 And what would be the max net leverage level that you would be comfortable living with for some period of time? And that's it for me. Thank you.
It all depends who you're asking. I'm asking you, Sheldon.
I'm asking you, Sheldon. My level of
comfort extends to about 0.1%. But I know that that's not according to all the financial engineers listening to me that I would probably feel comfortable at 2.5, 2.5 times. But I think I just have a feeling that perhaps we might see an emerging market pop through the clouds and during the time of weather when we could use it. So I'd rather not go out and borrow money now because if in the near future, which could be 6 months, 12 months, 18 months, we could use a few $1,000,000,000 I'd rather keep our power to drive for that. If however, it seems that interest rates are going to jump through the roof in one quantum leap, we may reconsider and do something before the rates go up too high.
So it's that's an answer and it's not an answer, but that's what's thinking in my mind.
Great. Thank you for your thoughts. Thanks.
Your next question comes from the line of John Oh from CLSA. Your line is open.
Thank you. A question on the cost again and I guess the margins in Macau. As you think about this cost restrain or this curtailing effort that you guys are embarking on for the remainder of this year, could you help us understand the priority of cost that you'll be taking out, especially as it relates to fixed costs versus variable costs? How should I be thinking and how should I be modeling the priorities of taking out player reinvestment? How much can you curtail that?
How do we think about labor? And how do we think about just general OpEx? And what kind of headroom have you got just for me to better understand how much cost can really be extracted to be in tandem with how fast revenue has kind of fallen?
Hey, John, if we're going to tell you how to do your figuring, I'm going to make a claim for your pay, including bonus.
All right, John. So, Johnny, obviously, we the biggest number of Macau which no one can impact is taxes paid on gaming revenues off the table clearly. Second thing would be direct incentives paid to customers. That's where there's opportunity I think across the market to be more judicious not just in our stores, but across the market. As you know, we're very protective of our Mac and East labor force and very respectful of our employees.
We've built a great employee base and we don't want to hurt that. If people leave us on their own volition that's one thing, but we're going to work very hard to ensure our employees are well taken care of and well cared for. So that's off the table. What's on the table is our other costs not direct against the employee, but perhaps other structural costs as well as costs in the marketing side. As you know, we've been the leaders and we've run more entertainment, more boxing, more everything than everyone else combined in Macao.
As Sheldon alluded to, it's very popular to talk about non gaming spend. Well, this company has spent more than anybody more than everybody combined. So we're re examining that and trying to figure out how do we put our best foot forward and maintain the importance of having headline entertainment, having boxing, having all these important events we've spearheaded and we've led in the Cotai Strip or Cotai arena and balance that with the margins you alluded to. We're very keen to do 2 things run our business intelligently for the short and long term. So we're reexamining every nickel and dime we spend both on direct incentives to customers, marketing incentives to the market itself, CapEx is on the table.
We've actually pulled back some of our expenses and things we weren't were not critical to our growth. And so everything is on the table. We'd love to see a return to a better day in Macau on the top line, but we don't see that short term. And so short term, we're thinking about expense control. But as you know, probably the biggest controllable expense would be reinvestment in the customer and reinvestment in the general market in terms of the arena and the advertising spend etcetera.
We're running a very, very multifaceted diverse business in Macao much more so other people. And so it's more complex to control this curtail and control the spending. Again, we don't we believe in long term Macao very, very much. We don't want to do something that's foolish in the short term to make an extra point or 2. Our balance sheet is stellar.
Our ability to run our business is stellar. Our confidence level in Macao is very high and we believe we'll resurrect in the top line. So while we'd like to report better numbers this quarter and next and beyond that, we have a long term commitment to this market and long term belief it will resurrect.
Okay. That's helpful. And if I can follow-up with a broader question and maybe something that is more positive. As you look at the policies that we've seen in China, and this is a more broader macro view that I'd like to get from you guys. We've seen several key measures coming out of Beijing that kind of speaks to easing and one that is looking to stimulate China, both monetary and also fiscal policies.
And we've seen that even as recent as a couple of weeks ago, where the stock exchange restrictions in Hong Kong and China have been kind of eased. Do you think that with the sustained economic stimulus and also fiscal stimulus that China is embarking, how do you think that plays out to your business? Are you sensing that perhaps there
will be
a translation effect? And how would you think about what it means to the outlook for maybe the rest of this year and also for next year?
He's Chinese here. It's a lot. Last time I looked John, you look Chinese. I looked at ghosting, they look like a Philadelphia citizen.
Well, I'll tell you, John, we do believe there's a lot of demand of pent up demand that wants to come to Macau. Once the external factors are decided by the government that demand will resurrect. I'm a firm believer being there last week and seeing the amount of people in The Venetian, the body count and visitation, there is pent up demand. People want to gamble and come to McAllen shop and eat and sleep overnight. I just believe this market has demand.
It has lots of demand. It just needs a few things to turn our way to turn the faucet back on a bit. But that's beyond our control and we support the government in their attitude and their measures and we'll wait respectfully for a better day. I was there with
Rob and Patrick last week almost for the whole week that we left on Sunday. And I have to tell you, I started to walk through 2 quadrants of the Venetian Casino, it was unbelievable. I had never seen it so crowded since we built it in 2,007 8 years. I haven't seen any of our properties as crowded as it was. Frankly, I had to have my security guys push away through so that I could get through.
It was the busiest and most crowded I've ever seen. Of course that was in the mass mass market.
Yes. Pure mass. Yes. Pure mass.
Yes. Thanks, John. Okay. Thank
you. Your next question comes from the line of Shaun Kelley from Bank of America. Your line is open.
Hey, good afternoon, everyone. Maybe to build on the last question about policies. One thing that seems like it popped up more recently was some discussion around a possible visitation cap. And I think Sheldon you referred to that in some of your prepared remarks. So I guess my question is twofold.
First of all, do you think that Macau will actually look to cap visitors to the market overall? And how do you think that would be enforced? And second of all, why do you think that they would do this if it actually is going to be put in place or you think it might? Because we've had a lot of investor kind of curiosity as to why this would make sense with the backdrop of so much supply coming online here.
Well, I'd like to give you my own personal opinion. I think the chances of that happening are that wake up tomorrow morning and all my hair will be grown back at 9 o'clock. There is no chance in my mind whatsoever. And with very good intentions believe that something like that may be good. When we when I discussed with him and his staff about how it could be done, there was no indication that any of it could be done.
For instance, I said you could do it very easily just to put a time limit on the opening hours of the Ganga Gate and then refer everybody to the Lotus Gate, the Lotus Bridge and Lotus Gate coming into. And that way you take them off the peninsula where the vast majority of the local population is and you shift them to the Adelson created Cotai strip that you put them in one hotel and they're I mean they'll go with soon to be 13,000 hotel rooms. They'll never and close to 1,000 retail shops, they'll never have to leave with probably 100 plus restaurants and very good ones too. Every time I come back, I got to go on a diet for the good food in Macau. There's no question.
So everybody will go into you leave them off in Gotai, they'll stay in Gotai and that's the whole purpose. It'll eliminate a lot of the buses, it'll eliminate a lot of the traffic etcetera, etcetera, etcetera. And when the Hong Kong Zhuhai Macau Bridge opens and I'm told from my conversations with some people who know better than I do last week that it's not going to delay until 2020 that it will open sometime between 2016 2017. I don't know. I don't know that for sure, just what somebody's opinion was.
So on the issue of capping, I have been told that it is not a decision by the government. It's only a suggestion by one of the ministers with very good intentions, but it had been thought out. And I told him that with my 42 years of experience in the mice industry, that it's my opinion that if that I would never as an organizer book an event in Macau if I knew there was a possibility that the guy who came through the gate before me was the last guy, the 21 millionth person to go through. And too bad I was one extra guy and I couldn't get in. So that can't be a an exhibitor, an exhibitor staff, the President of an exhibiting company or a big buyer that wants to come in and buy something from the trade show or the group.
So I think although it comes with good intentions and there may even be I also told them there may be some rationale, but it's not doable. It's just not doable. So you'd have to take, let's say, would you run from January 1, let everybody enter to hit 21,000,000 people? Or why don't we take 21,000,000 divided by $365,000 and it comes out to $57,000 So every day at $57,000 we just shut the gate. I mean it's just impossible.
So I'm surprised that some people that are listening to this, although I mean it comes from a reliable source, it is not the position of the Macau government at this time. It's a suggestion of an individual minister. Again, I say with good intentions and trying to do a good job. But from my standpoint, as a MICE operator, it's there'll be all the MICE Timucao will collapse and they won't let that happen.
That's very clear and appreciate that. And I guess my follow-up on a slightly different subject would just be, I think Rob you alluded to possibly some CapEx shifting and changing of priorities. It looked like in the schedule that you guys gave in the slide deck that you had pushed out some of the timing around the Parisian CapEx. So can you just elaborate on that a little bit? Does that are you planning on changing the opening timeline there?
What's still just the latest update on when you think the Parisian is going to open?
2 2 things, Sean. One is we are examining all our CapEx non Parisian and Parisian to just reconsider what makes sense in this environment, be it room renovations, what type of renovations, retail, restaurants, everything is under consideration because we are trying to be more prudent and think about the market in terms of changing. As far as the Parisian, we're still looking at that being late 2016, but depends on labor and allocations that could increase depending on where the last week we were under consideration for additional labor. And that they could move up depending on the government's decision on labor allocation to us. I get the sense we may get a boost and there's a labor allocation and it hasn't been confirmed yet, but that would change.
The day could move between late summer of 2016 all the way to the Thanksgiving period in November of 2016 depending on the government's decision on labor outages?
It could be as early as late spring or early summer.
We requested more labor and we seem to get a favorable response. So no filed determination is made as of today.
Perfect. Thank you very much. Sean?
Your next question comes from the
line of Thomas Allen with Morgan Stanley. Your line is open.
Hey. Couple of questions on occupancy. So it was down significantly in the quarter in Macau and you highlighted that it was better than the market. But I noticed that I got some promotions for retail visitors to come and depending on that spend at the mall, they could get a free room. Is that an opportunity that you guys can assess or access going forward?
Is this something that occupancy has gone down for the past two quarters, but it could you could start to do more and get some traction there? And then also just in Singapore, I noticed there's a significant decline in occupancy. Can you just talk about what was going on there too? Thank you. Sure.
I don't think that's a hotel promotion. It sounds to me like it's a promotion from the retail We don't market the mall that way. We've never done it since we opened here in 1999. We don't say you buy a lot in the retail mall and we'll give you a free room. It doesn't that's like buying getting frequent flyer points from somebody else and then other than airline.
So if you ride buses, you get frequent flyer points on one of the airlines. We don't do that. And I suspect that as I said that that is a promotion from the mall itself. A couple of
thoughts on your comments. First of all, we agree that the occupancy has fallen a bit in Macao. And so when you think about Macau, we were the only people in that market selling cash rooms for the last couple of years. The rest of the market basically comped off 90% because of the demand for casino guests who gave you a high enough return on that room. That's changed dramatically.
The market is now selling rooms. A lot of people are selling rooms due to the junket reduction and obviously the premium mass reduction. So whereas some companies were including us were comping aggressively to people at theoretical losses that 3 and 4 and 5 times the price of the room that's changed. So there's more competition for the cash dollar in the room side. Having said that, we still think structurally our room is huge.
If we can get back in the 90s which is our goal, we to your point about retail, we are trying to add more of our retail advertising to the room customer. The thinking there is that we focus a lot on other parts of the resort and we find out that shopping ranks very, very high in the consumers things they want to do when they reach Macau. We have as Shove alluded to hundreds and hundreds of stores of all price points ranging from the lowest to the Chanels of the world. And so our range is huge. The shopping advantage we think under one roof with our food, our shopping, our gaming, of course our sleeping rooms.
It's a unique opportunity to blend them all together and to promote get more occupancy. So one, business has fallen on account because there's more people chasing the cash customer. We're not alone in that space anymore. 2, though, we think the opportunity to blend retail to the overall offering of the resort is wonderful because we find that when people sleep in our hotel, they do shop more in our hotels and of course gamble more in our hotels. And eat more.
And eat more, yes, stuff like that. Well, especially us, I'm not sure the customer. They look awful thin. We don't look so thin. On the Singapore side, I'm feeling it.
Singapore, you're right. Our occupancies fell a bit. It's a combination of 2 things. 1, there's a currency issue there. You'll note that we mentioned a $4,700,000 a day casino win on the non rolling slot ETG, our best quarter ever, but currency effect is more like $5,000,000 or $5,000,000 a day.
We had a really great quarter. Same thing happened though on the room side. We got hurt somewhat by the currency impact. That hurt us on the rate. As far as occupancy, we had a fall off a bit as you can tell by our diminished rolling numbers, Thomas.
We were off the rolling business in 22%. And so our ADR is driven somewhat like all high end casinos. We sell rooms to our casino at very high rates. The suites go for up to $10,000 a night in Singapore. They're massive suites.
When that customer doesn't come, we lose some rate and some occupancy to the very top tier of the market. As you know, our hotel is still the exemplary hotel in probably in all of Asia as far as iconic architecture, etcetera. The place still does tremendously well. We did have an off quarter in terms of occupancy rate. I think that will resurrect in terms of as things get healthier with the high end Chinese business.
But you're absolutely right in those comments and that's an issue for us to deal with in Singapore along with the currency issue that continues to be weak against the U. S. Dollar. Well, if I just like that, it
may be leveling off at 10% because the Singapore dollar was up at $1.37 plus almost $1.38 I just look at my calculator, my smartphone here, which is clearly smarter than I am. I suppose that are on. But I have special privilege.
Okay. Please somebody here. Yes.
I just looked at it. It's 134. So the some of the articles in the business section, the straight times in the local newspapers say that it's the some of the Malaysian and Indonesia visitors have slowed down a little bit because the Singapore dollar in relation to the Malaysian Indonesian currency is a little discouraging for them. But I think it's going to turn around. Everything is cyclical.
Everything is cyclical and I never hedge because I'm quite certain and it's been going that way for me most of my life except when I was in grammar school. The currency, if it goes one way, it's going the other way soon. So we don't I don't take I don't get nervous or depressed or upset about the currency volatility because and at least in Singapore it's a very, very stable currency. So also though do we still have
the highest ADR in the Singapore market, I think, by far.
Okay. And then just as my follow-up, just on capital returns. I You have almost $2,500,000,000 of cash. I guess just bigger picture, why didn't you buy back any stock during the quarter? And in the past, you said you were going to do about $75,000,000 a month.
Has that gone away? Thanks.
I think we're going to be opportunistic in the way that we repurchase shares in the future. I think we're looking to protect the dividend in such a way we view it as a permanent obligation. So it's something we want to be able to grow substantially in the future. You heard the Chairman earlier in the call saying that his view will grow at least 10% per annum for the next 3 years. So as a goal, we'd like to do more than that.
I think we're accumulating cash and evaluating the market to make sure that we have the capital to do we want to do. So I think we'll continue to use share repurchases as a way to return capital to shareholders in the future. This quarter we chose not to.
Okay. Very straightforward. Thank you.
Thank you. Thanks.
Your next question comes
from the line of Carlo Santarelli with Deutsche Bank. Your line is open.
Thanks guys. Good afternoon. Sheldon, you provided some color earlier in terms of what the floor looked like at Venetian. And now when looking at the industry data and seeing kind of the last 3 months of occupied room nights or hotel guests being down mid to high single digits and obviously some months are distorted given comps. But when you think about what was once a VIP issue trickling down and apparently showing up in the mass business a little bit more.
How do you guys get comfortable with adding hotel room supply? And how do you kind of view the amount of hotel rooms that are coming to Cotai over the next several years?
Well, first I'll say that none of the hotels are even approaching where we are. Most of the hotels are somewhere between 15,021,000, 1500 to 17,000 or 18 100. We're doing over 3,000. And we've asked the government as you might have read some of the press bookings lately. I've asked the government for another 2,500 non gaming hotel.
Look, this has been my philosophy right from the beginning. If you build critical mass, they will come. You could take a spot in the middle of a desert or on the seashore and you build a city and people are going to come. The validation of that belief is something called Cotai Strip. Everybody said you're crazy, all of the activity is on the peninsula in Macau.
And nobody is going to go out there. I'm of the conviction. Now look, everybody is building each one of the concessionaires a building. And the small sublicensed operators that were sublicenses from Stanley Ho and which is now operated under SJM, they're not building. They don't have any land and they won't build in Cotai.
And Cotai will be like I said right from the beginning. I compared the Las Vegas Strip to the Downtown Las Vegas and that's what it's turning out to be, the Cotai Strip versus the Peninsula. And so they're not going to move out they're not going to move out to where we are. And our critical mass is going to carry the day. I don't know about the I never heard people say it's a must see to go to Star World or to go to the Waldo or to go to any one of our competitors.
What I do hear everybody say, when you go to Macau, you got to go see The Venetian. And that's it. And because it's the critical mass of hotel rooms, of tables, of restaurants, of nice facilities, of shopping, etcetera, etcetera.
Understood. Thank you.
If the two words whatever apply to Sheldon Adelson, it won't be hey you, it will be critical mass. Any dividends? Any difference? Yay, dividend. I forgot to say that to me.
As we have reached the allotted time for
Great. I know you commented a little bit on why you didn't do share repurchase in the quarter. But I wonder if you could just give a little bit more forward looking color in terms of if your commitment to raise the dividend does that mean we shouldn't expect share repurchase maybe for the next couple of quarters?
No, no. It has nothing to do with anything. We have an enormous amount of cash flow probably I don't know as much as the other U. S. Companies combined.
And I think that in Macau, we bottomed out as you've heard my own opinion, but I can't guarantee that of course. And I just have a I just have it's not a dream, but I just have a good feeling. I get the vibes, let's say, that I think one of these emerging markets are going to open up soon. So I want to make sure that we have enough money. And as you've heard me say before, I'm risk averse.
And I don't want to I'd rather keep our powder dry for the time being liquid And it may be opportunistic to go in tomorrow. We are not excluding any of this. It depends what size we see. And my interest are aligned with yours and I own 54% of the company. Your interest aligned with mine.
I love dividends. That's my Yay dividends statement is Yay stock buyback as well. And but we can't do all of it. We can't do special dividends, regular dividends constantly increasing and start buybacks and just you can throw money out the window. We could do that.
So but I we'll try to do everything because when I'm sitting in the Board meeting and having a discussion about although I don't take a vote that's only from an ethical viewpoint, ethical and moral viewpoint. Everybody knows how I feel, they're looking at me and say, this guy at the end of the table owes 50 4% of the company, you think he wants an increased dividend? He wants us to buy some stock back?
Okay. Thank you.
Thanks, Robin.
Thank you.
Okay. I think that it's been fun. It's good to answer all your questions and to talk to you and to think about where a company is going. I just want to point something out to you. I haven't sold this year, not since the last time I said that.
And there is nothing in my thinking that has changed at all. And I intend I have no intention of selling any shares in the foreseeable future. Okay. And at my age, I got a long view forward.
Thanks, everyone.
Ladies and gentlemen, this concludes today's conference call. You may now disconnect.