Operator News

Singapore – Sands expects market recovery in Asia by late summer

By Phil - 23 April 2020

Las Vegas Sands is hopeful of a return to some normality in its Asian markets by end of the summer, but has warned that its Marina Bay Sands property in Singapore could be more affected by social distancing measures than its Macau casinos.

The operator reported a 51.1 per cent decline in first quarter revenue having felt the effects of the COVID-19 pandemic in Asia shortly after the New Year and in Las Vegas from March onward.

Sands reported a first-quarter net loss of $51m with net income of $744m. GGR slumped to $1.78bn from $3.65bn a year earlier.

It is hopeful of a recovery by late summer but believes space restrictions in Singapore could impact recovery there.

Robert Goldstein, President and Chief Operating Officer, said: “I think by late summer, early fall we are going to see some nice profitability out of our Asia properties. By late fall, I think you’ll see very strong return to a better time over there. China is going back to work, they’re going back to travel and when the IVS and the 14 day quarantine are taken away, I think all segments will come back and come back rather healthy.”

“It will be a gradual process and the one thing we’re grateful for is that the majority of our income is derived from Asia, which as you know has been through these situations, be it SARS or be it Swine Flu or in the past they are more conversant with the problems,” Mr. Goldstein added. “We think the recovery there will come rather quickly, but it will come in gradual phases throughout the summer. It will be Guangdong and then other provinces to follow.

“We feel pretty confident we’ll be back to a much better place this summer and then a much better place in the fall, and we have seen evidence of pent up demand like crazy from our customers who are asking when and we talk to them pretty regularly. So we feel pretty good about the return of Macao first, far beyond what we’re going to see in the US. In Singapore, social distancing did have an impact because we’re limited there in terms of size of the operation, and I think it will have an impact on Singapore in the future. The question is how long those social distancing measures stay in place. In Macau, we’re in a much different position because of the scale and size of operations.”

Sheldon G. Adelson, Chairman and Chief Executive Officer, said: “The impact of the Covid-19 pandemic on our business has been unprecedented, and I have never seen anything like it in my over seventy years in business. Our greatest priority during this difficult time remains our deep commitment to supporting our team members and to helping those in need in each of our local communities of Macau, Singapore and Las Vegas.

“Despite these circumstances, our balance sheet strength will enable us to emerge from this pandemic with all our promising future growth opportunities fully intact. We remain extremely optimistic about an eventual recovery of travel and tourism spending across our markets, as well as our future growth prospects. We are fortunate that our financial strength will allow us to continue to execute our previously announced capital expenditure programs in both Macao and Singapore, while continuing to pursue growth opportunities in new markets.”

He was adamant that previously announced investment in Marina Bay Sands in Singapore and The Londoner in Macau would remain unaffected.

“Our optimism about an eventual recovery, coupled with our financial strength enables us to continue the execution of our previously announced capital investment programs in both Macao and Singapore,” Mr. Adelson explained. “We believe these investments will strengthen our leadership position in each of these markets and will provide a larger platform for future growth with travel and tourism spending eventually recovering.”

JPMorgan analyst Joseph Greff said: “Overall, we view Las Vegas Sands as a way to play what should be improving GGR trends in Macau, a gaming/travel dependent market that experienced the COVID-19 downturn first and should experience a bounce/recovery earlier, at least in relation to potential recoveries in US regional gaming, Las Vegas Strip, and US business travel lodging markets.”