Las Vegas Sands Corp.

Good day, ladies and gentlemen, and welcome to the SANS fourth quarter 2022 earnings conference call. At this time, all participants have been placed on listen-only mode, but we will open the floor for your questions and comments following the presentation. It is now my pleasure to turn the floor over to Mr. Daniel Briggs, Senior Vice President of Investor Relations at SANS. Sir, the floor is yours.

Thank you, Operator. Joining the call today are Rob Goldstein, our Chairman and CEO, Patrick Dumont, our President and COO, Dr. Wilfred Wong, President of SANS China, and Grant Chum, EVP of Asia Operations, Las Vegas SANS, and CEO of SANS China. Today's conference call will contain forward-looking statements. We will be making those statements under the safe harbor provision of federal securities laws. The company's actual results may differ materially from the results reflected in those forward-looking statements. In addition, we will discuss non-GAAP measures. Reconciliations to the most comparable GAAP financial measure are included in our press release. We have posted an earnings presentation On our website, we may refer to that presentation during the call. Finally, for the Q&A session, we ask those with interest to please pose one question and one follow-up question so we might allow everyone with interest the opportunity to participate. The presentation is being recorded. I'll now turn the call over to Rob.

Thank you, Dan, and thank you for joining our call today. A few brief comments, then we'll move to Q&A. McHale's future is bright, remains the largest in the clear resort market globally. Our commitment to investing in this incredible market is never wavered. And with an unrivaled critical mass of world-class IRs, as well as continued improvement in transportation infrastructure in the region, Macau will mature into a vibrant, diversified tourism market over the coming years. SEL's positioning and scale are perfect to capture the opportunity. Our diversified IR model, with continuous investment in non-gaming segments, including mice, hotel suites, live entertainment, retail, food and beverage, positions us well to capture the growth opportunity. Our diversity, scale, and track record in non-gaming make us uniquely positioned to cater all segments of the market and enable Macau to appeal to international tourists as well. The new concession is a win-win. We deeply appreciate the opportunity to operate one of those gaming concessions for the next 10 years. We are excited to deploy more capital to expand non-gaming offerings at SCL. The US $3.8 billion commitment is just a baseline. We hope to invest more as the market continues to grow. The commitment to develop non-gaming is the core of our investment and operating strategy for the past two decades, whether it be mice, entertainment, themed attractions, or destination sales and marketing in overseas markets. We view the investment commitments by SEL and the rest of the industry as positive for Macau. Over the past few weeks, travel restrictions have been lifted. It is too early to tell the true measure of the underlying pace of recovery, but indications are extremely positive. We have seen significant improvement on property visitation Gaining volumes, retail sales, and hotel occupancy. We remain positive on investments in the London and Four Seasons. Our investments position as well as the market recovers. The quality of our new products will also help drive high-value tourism from the region, especially the overseas markets. Turning to Singapore, our normalized EBITDA and gaining volumes are back now to the 2019 levels. Normalized EBITDA reached 386 million USD for the quarter. Rolling volumes are approaching 2019 level. and mass win per day is now exceeding the level of 2019. We've also delivered strong performance in non-gaming across all segments, including retail, mall, hotel, F&B, and mice. Retail is especially noteworthy with a 26% increase in tenant sales per square foot versus 2019. Our suite and casino renovation program is progressing. Renovated product will come online throughout the year. Looking ahead, Marina Bay Sands is poised for further growth as all of our markets recover and become free of travel restrictions and airline lift continues to recover. Let's move to Q&A.

Thank you. Ladies and gentlemen, the floor is now open for questions. If you would like to enter the queue to ask a question, please press star 1 on your telephone keypad now. If listening on speakerphone today, please pick up your handset to provide optimum sound quality. Also, we ask each participant to limit yourself to one question and one follow-up. Please hold a moment while we poll for questions. And the first question is coming from Joe Greff from J.P. Morgan. Joe, your line is live.

Hey, everybody. Good afternoon and good morning to those in Macau. My first question, obviously, is going to be on Macau. And, you know, Rob, Patrick, Dan, can you remind us What levels of NASH GGR, either on a dollar per day basis or as a percentage of 2019 levels, do you need to be at in order to be EBITDA breakeven? Obviously, the 4Q saw block narrowing relative to the 3Q. I'm presuming, and I'd love for you to expand on it, I'm presuming what you're seeing thus far early in January is is either at EBITDA break-even or maybe more recently generating some level of positive EBITDA. So pessimistic, Joe.

We're more than break-even. Am I? We're much more than break-even, doing just fine. I asked Patrick to give us some color on those issues, but I think we're past the break-even. We're now in the positive territory, moving towards very positive territory. Patrick?

Thanks, Rob. So a couple of things to note. Mix is important here. So as you know, we're a mass and premium mass and really a large-scale tourism investment company. And I think the key thing to note is the market is open. Liquidity is in the market. This is going to be a premium-led recovery. We invested significantly during the pandemic. And the benefit of that investment is on full display. We have new suite products. We probably have what we think is the best new property we've had in a long time open up in Macau. That investment is really showing power in the market right now today. There's significant non-gaming scale investment that we've made that is bearing fruit. And so it's great to see the recovery. It's great to see the volumes coming back. You know, it's interesting. I think, you know, Rob has talked a lot about pent up demand over the years. He's witnessed it in other places earlier in his career. We saw it here in Las Vegas. And we experienced it fully in Singapore. And now we're at a run rate that is, you know, really, really strong. And I think we're seeing that in Macau. And I think the key thing is this is going to be a premium-led recovery. In terms of break-even, I don't think that's really a consideration anymore. I think we're way past it.

Yeah, Joe, I think we, to be confident, to be very honest and direct, we are in very positive territory and keep moving upside. I think the one thing I would say to you is that no one ever questioned the power of the base mass market. I would remind you, looking at our numbers, base mass in Macau and our buildings So it's about 1,500 Hong Kong per hand as an opening bet. So it's a couple hundred bucks a hand, USD. And that's the base mass business. The problem we're having right now is you can't get a seat in the games in our buildings. We're running 9,500% occupancy in those games. The same applies to the slots and ATGs. The big question everyone's thinking about, obviously, is premium mass. And I think you'll be pleasantly surprised when you see the numbers coming out of the premium mass. And you'll see the liquidity. You'll see resilience in that segment. And it's been a very pleasant surprise Grant, can you add some color to that?

Sure. Good morning, everyone. Good afternoon. Yeah, I think the key thing we're seeing right now is that the quality of patronage is very high across all segments. So it's not just premium mass. It's also base mass. It's in the retail segment. So we are seeing a very strong recovery in spend per customer. And again, that's not concentrated in any one segment. It's extremely broad-based. And I think what you're seeing in the public numbers on visitation were recovered. I think for CMY against 2019, we're about 40% of where we were in 2019 Chinese New Year for the first three days. And we're seeing revenues and volumes outperforming that visitation recovery which is natural, which is what we've seen in other markets. So, you know, things are looking, you know, extremely positive right now.

Great color, guys. Thank you. And then maybe switching over to Singapore for my follow-up question. Obviously, your comments on mass gaming, Rob, obviously very strong. Can you maybe talk a little bit about your comments that I believe on slide four saying you know, late December and thus far in January, there's been an inflection, at least from the mainland Chinese segment. Can you give us some perspective on the relative, I don't know, you want to look at it on a revenue or EBITDA contribution, you know, looking at, you know, 2019 levels, and then, you know, where that was, you know, sort of more recently as a percentage of the totalness?

Yeah, I'll let Patrick. You want to address that? Yeah, sure. I think the important thing to note is that there was this pent-up demand story in Singapore, and now it's blossomed into a full-on bonanza. And so what we're really seeing is every segment is working. And so, you know, we had a lot of noise in this quarter because of the hold. You know, we rolled north of $7 billion, which is pretty unbelievable considering where we came from. And, you know, the mass play was very, very strong. And so while we were doing this, we had almost 20% of our room inventory out. And so when you look at that 477 win number in mass and you look at the rolling volumes and realize we're out 20% of our rooms, there's a lot of leg room here. There's a lot of room for us to go. And so I want to be careful when we talk about margins and contribution because we're going to adjust that as we change mix, as we get rooms online, as we go through the renovation, as we change our suite product. as we price up, as we yield up, and as we have access to higher value tourism. So this is really a forward-looking thing more than it is what happened this quarter, because we're going to continue to sort of adjust while we get our mix right. So what I would look to in this business is margin expansion over time, more rooms coming online, better product, better service, and of course, being able to capture a very strong component of both VIP play and mass play.

Yeah, Joe, I think we're missing, at Patrick's point, we're missing two, you know, we're in a great place. We're back to 2000. We're back to 1.6 run rate if you take out the abnormal low hold on the rolling. But the two drivers that we just, well, there's a lot of drivers, but the two that jump off the page are renewed tourism throughout Asia and China in particular. That's yet to come. We're doing all this. We're hitting 2019 with no China participation or limited China participation. And as Patrick mentioned, a handicapped physical plant, Um, we are in a very, very fortunate position with MBS. I think it's been become a property with a lot of growth and I believe it's going to be a $2 billion business in the future. And I see nothing holding it back except for our own renovations, which are extraordinary. I hope you get the chance to see it. And the reemergence of Asian tourism, including China back into the property. Um, the only regret we have in Singapore, we just like to have more capacity because, uh, you'll see in this, I think you'll see in this year, the power of the earning power of MBS.

It's an extraordinary product and we're lucky to have it. And Patrick, just back to your mix and yield comment. Do we interpret that, at least if we look back to 2019, that that China MBS patron had a positive mix on spend per trip or spend per day or gaining revenue per day?

I think it's a combination of factors, Joe. I think obviously the China market is always powerful. But I also think there's cost issues in all these markets. There's inflationary factors undeniable, be it energy, wages. I mean, there's a different world out there, and you've got to cope with it. But the thing about MBS that fascinates us is we believe we can drive revenues across the board. We're going to rethink our retail, rethink our table mix, our floor, our room pricing. We think we're a product that the demand will be close to insatiable for it from a gamer and non-gamer perspective. And we're going to overcome margins. a margin by overcoming costs with higher revenues, a lot higher revenues across the board in every segment. That's the approach. We see MBS as a very unique product that's unrivaled in that part of the world, and we can just push pricing across the board, gaming pricing, ATR pricing, retail pricing, F&B pricing. It's just that good and that desirable. And let's face it, the market right now is hugely in our favor. Singapore is very desirable from a lot of perspectives.

Great, thank you.

Thank you. The next question is coming from Carlo Santorelli from Deutsche Bank. Carlo, your line is live.

Hey everybody, thanks and good evening. Rob or whoever wants to handle this, I was just wondering in the brief time that China has more or less reopened, have you guys seen positive or negative any change in behavior as it pertains to patronage at MBS?

Oh, MBS. That's a good question. I think it's too early to say we're going to see that. ICS is getting plenty of China participation, both Macau and Singapore, but it's really too early to say. It just happened so quickly and the turnabout was so rapid. I think it's too hard to predict. I think the way this is going to segment, though, is that we're going to get more than our fair share of the rolling business at MBS that moves in that direction, and we'll get the premium mass customer to visit more into I think our business really is going to split in that direction. I think it's pretty predictable what's going to happen here, and we're okay with that. So Singapore will get the top of the top, but each of those places will get tons of premium mass demand from China and throughout the region. I also think people underestimate how powerful Macau can become as a desirable visitation place throughout China. It's got everything. It's got the rooms. It's got the access. One thing it has beyond Singapore, it's got lots of capacity and lots to offer. So I think Macau is going to be a very strong international destination. We plan to be very aggressive trying to push people into Macau to see the property, all of our properties.

That makes sense, Rob. Thank you. And then just as a follow-up, and I understand kind of looking backwards at things that are Macau-related is somewhat pointless in the environment that we're in right now, but it's just interesting. It does stand out a little bit when looking at your base and premium mass table revenues from the slide deck. Your premium mass is representing, I think, 20% of 4Q19 and base mass kind of more like mid-teen, 16, something like that. However, the premium mass is down considerably year over year, whereas the base mass is reasonably steady year over year. Is that a hold dynamic on just lower than normal historical volumes, or is there something else that's kind of made those two diverge more recently here in the fourth quarter specifically?

No, I think it's just a visitation issue. It's not a hold issue. It's a visitation issue. I think you're going to find that washes out. I wouldn't take those numbers too much to heart. I think when you look at Q1, I wish when you see January when those numbers are out there for the market, I think it will all wash away quite nicely. It won't enter into your thinking, Carlo. It's a non-event. I think you'll see a surprising strength in both those segments. I would say in Macau we're going to be very strong, very overrepresented in the base mass because we have the capacity. We're a scale player. And so we have the capacity in the gaming, non-gaming, retail, restaurant space to do extraordinary things in the base mass. And again, as I'll reiterate, base mass in Macau is a different animal than the U.S. It's a $200 base bet, $175 base bet. So it's a pretty special customer. We are going to over-represent because of our scale. But on the other hand, with all of our sweet product, et cetera, I think we'll also be the leaders in the premium mass business. So we have a very strong future ahead of us in Macau. I always chuckle people. If you're looking for a negative commentary in the Macau market, you're in the wrong area of this call.

Understood. And then, Rob, just quickly, if you could remind us, to the extent you guys are willing to share it, 2019, your direct VIP volume, your in-house VIP volume, as a percentage of total, would you guys be able to share something like that?

We would, but we won't.

Understood.

Okay. You could, but you won't. We could share it, but we just won't. No, we're not going to do that. But, Carl, thank you. It's good talking to you. Thanks, guys. Thank you. You as well.

Take care.

Thank you. The next question is coming from Stephen Grambling from Morgan Stanley. Stephen, your line is live. Hi, everyone. Thanks. Can you hear me okay?

You're good, Stephen. Go ahead. Morgan Stanley.

The sort of visitation data for Chinese New Year, it looks like Hong Kong has been the bigger driver in the recent uptick in visitation. Is there any way to parse out recovery between Hong Kong and mainland China and any reason why spending behavior and recovery may be different between these source markets?

Yes, and I've got a perfect answer to that. Mr. Chum?

Yes. You can see from the visitations numbers published by the tourism bureau, the mainland Chinese visitation is at about 30% recovery rate versus 2019 CMY. So obviously with 40% recovery for overall visitations, Hong Kong visitation recovery has been higher. mainly, I think, as a result of just the ease with which they've been able to go. And obviously, Hong Kong has had a longer stabilized situation as it relates to the pandemic. So I think from a pure visitation point of view, this is not unexpected. And bear in mind, the transportation support for the Hong Kong visitor only really opened up on the 8th of January. So this has been a very rapid increase in Hong Kong visitations. That said, I think we reference back to comments that Rob made earlier and I alluded to as well. I wouldn't get too stuck on the visitation recovery. I think in these types of reopening, we're going to see the premium customers come back first. The core customer coming back has a much bigger percentage than the overall visitation. So I think what we're seeing is the quality of revenues and the patronage from all regions that visit in Chinese media has been very, very high. So we are way outperforming the visitation recovery in terms of volumes and revenue and I think if you look at our property visitations, our recovery rate in visitations to our own property is far outperforming the recovery in the overall visitation numbers in the market versus 2019.

The grant's comment, again, we don't want to confuse visitation with GGR. an easy way to make them work. I was recently in Singapore. I walked in one of our retail stores with our retail person and she told me the sales in the store were like 70 million U.S. I said, there's nobody here, no one in the store. And she said, Rob, no, I need the right people, not a lot of people. I think that's what's happening in the category of getting the right people showing up en masse. And it's reflecting in your numbers. You'll see that when the market numbers come out. I think the early adapters to the market are the right people for the market. And I think that's why there's a confusion the visitation versus the actual revenues.

Makes sense. And maybe as a related follow-up there, there's been a similar dynamic of stronger spend per visitor in the U.S. that ultimately drove much better margins. How are you thinking about the puts and takes to margins in Macau versus what we've seen in other markets?

Grant, margins?

Yeah. I think, first of all, our cost structure is in good shape. We've spent Unfortunately, we've had to spend extra effort in optimizing the cost structure over the past two or three years. So we've got a very lean cost base right now. In terms of gross margins on the revenue, I think a couple of things. One is our mix, obviously, is more favorable going forward, just from a gross margin mix perspective, simply because The vast majority of our revenues will be coming from the non-rolling and slot segments. And then secondly, the non-gaming we expect to be growing. And that's obviously a much higher margin. We expect to be growing in retail, hotel, F&B, actually all the non-gaming segments. So that's the structural framework for the margin. But obviously, the actual flow through in the percentage margin, ultimately deliver from this very positive structure is really dependent on the rate of volume recovery. So you still need the top line to recover to a certain level before you get the flow through. And then to go beyond that, obviously, we hope, and we're all working towards that, is for this market to continue to grow and hopefully, at least in in the mass segments and non-game segments to go beyond where we were in 2019. So if that happens, obviously, our margin structure should be very positive. So hopefully that gives you a sense of how we think about the structure of the margins going forward. Absolutely.

Thanks so much. Thanks, Stephen.

Thank you. And the next question is coming from Robin Farley from UBS. Robin, your line is live.

Great. Thanks. I wanted to ask, you've obviously always been very focused on the mass business there, but some of your competitors that have been more VIP-focused, are you seeing them do things differently now that there's not the VIP market to go after in the same way there had been? Is it too soon to be seeing what changes that might mean?

I would assume it is, but I'll defer to Grant since he's on the ground. I can't imagine we have any visibility into that at this point. But clearly, we have a new market here which favors our asset base. And our approach for the last 20 years has been scale. As you well know, Robin, it's a mass story with premium mass, retail, convention, et cetera. So we don't change a lot. It was tailor-made for what we do in this environment. Our competitors will adapt and have to change. But I don't know. Grant, is there any color in that?

Yeah, I think, Robin, the competition tool for premium mass has always been very intense and I think will continue to be, given the dynamics you just referenced. But at the same time, I think, as Rob says, we've got footprint and scale advantage on gaming assets and facilities, I think really position us very well for all segments of mass. And then, as Patrick referenced at the outset, the product that we've been developing over the last three years, especially in the London and the Grand Suits at Four Seasons, are really prime positions to help us to be more competitive in the premium lifestyle segments of the market, as well as, I think, hopefully, to drive overall growth you know, high-value tourism to Macau over the coming years. And I do echo the point about international tourism as well. I think, you know, our footprint combined with our new products and our traditional strength in mice and international marketing network really position us very well to bring those high-value guests to Macau as well.

Great. Thank you. Thank you for that, Collar. And then just for my follow-up question on Macau, can you give us sort of a rough sense of that dollar commitment that you've made to invest over the next 10 years in Macau, kind of roughly what percent of that might be new projects and what percent might kind of fall into the OPEX line, you know, kind of like overseas marketing and things, you know, just kind of a... CapEx versus OpEx split, you know, just ballpark? Thanks.

Yeah, sure. I think one thing that would be helpful is if you turn to page 22 in the presentation, you'll see some details on that. So it might be best to refer to those pages because we do break it out, and there are several pages behind that that explain what our concession renewal commitments actually are. So it's there in the presentation.

Thanks. It's always tough to get through all of your slides before they are involved.

No problem. You know, I think the key thing here is that we're very committed to investing in the Macau market. We think this investment will drive additional long-term tourism value and diversification of Macau's economy. We're very excited to make these investments, and we think these are things that will really help achieve our goals and the goals of the government. So we're looking forward to it, actually.

Great. Thank you. Thank you. The next question is coming from Sean Kelly from Bank of America. Sean, your line is live.

Hi. Good afternoon. Good morning, Grant. Just high level, you know, as you kind of look through kind of what you're seeing probably real time, you know, could you give us just your latest thoughts on maybe the pace of recovery here? Do you expect things to be pretty, you know, pretty linear or any chance of a, you know, whether it's COVID or restriction related setbacks or anything else that could, you know, change, you know, what you're seeing on the ground? I mean, obviously Chinese New Year, you know, is fantastic. but it would seem like the opening here is just going to continue. Any reason that that would be kind of different from the reality, or how are you seeing your booking shape up and the patterns you're expecting to see over the next couple of months?

I'd begin by saying, first of all, we're just thrilled to be open and making money and seeing demand like we're seeing. I don't think any of us have the aptitude or the insight to tell you what's going to happen post-Chinese New Year's, but I do think longer term, You have to have real strong confidence. When you get to see these numbers that we are seeing, that this is a market that's going to rebound. This is a market that has a strong base mass, premium mass. Some of the fears in the market about, gee, what's liquidity like? What's resiliency? I think those fears will be pushed aside. What's the trajectory and how fast it happens? I don't think any of us have the gumption to venture a guess. I think it would be silly. We just feel fortunate. We're open. We're operating. We think it keeps getting better, not worse. I don't believe COVID is going to be, you know, obviously China's gone through a different trajectory than we did here in the U.S., but hopefully that won't be a problem. I, again, don't want to speak for anyone I can't speak for, but if things keep going like they're going, we'll all be in a very happy place in 2023, especially, I think, summer and second half of the year. As normal travel patterns resume, Hong Kong gets back on speed. mainland China, I think there's a lot of growth potential and a lot of good thoughts coming our way vis-a-vis the future. We are big, again, as I said earlier, we're not going to tell you that we don't believe in this. We believe in this story very strongly. We believe in our assets very strongly. We believe in international tourism in Macau very strongly. So we're not going to predict when it happens, how it happens, how fast it happens, but we feel very positive about what's going to happen in Macau in the long term. Very positive. And we're looking to investing money in there and getting back to where we were in the past in Macau. We couldn't be more positive on Macau long-term.

Great. Thanks for that, Rob. And then maybe a little bit more specific one for Grant, if I may, but just wanting to dig in a little bit more on just the labor and staffing side of what you're seeing in Macau right now. We talked about the margin structure, high level, but are you fully expecting to return to levels of staff that you had pre-COVID? Are you already there? Will it be even above those levels? What's needed and what have you optimized? I know those people, many of them have found employment elsewhere. The market has grown since where we started. How do you think about maybe either FTEs or overall operating expense run rates relative to 2019?

I think, Sean, we've also become more productive and efficient through the past couple of years. I think we'll have to rethink. It wouldn't necessarily be referencing exactly back to 2019. And also a mix of product has also changed quite a bit through the Londoner. We do have some more high quality non-gaming asset base to operate as well. So to give you a bit more color, today we are short of manpower relative to operating capacity and relative to the demand that we're seeing. So we're not operating one of the Sheraton towers as we speak. So we are minus 2,200 rooms from our operating capacity. And our newest hotel, London Court, which we soft-opened in the past year, we're not at the full operating capacity for that high-end all-suite hotel. We're still only about two-thirds of the way through in terms of our ability in Manpower to operate the whole hotel. So both at the top end and at the mass end, we are still short of Manpower to operate the full capacity and we'll be progressively hiring to fill the gaps. as we go through the recovery and hopefully within the next few months we're going to be in a better place relative to our full operating potential because we clearly see the demand pattern I think is going to urge the whole industry to staff up and to be able to operate especially for these peak periods And that's another part that we have. We have no crystal ball, as Rob says, on the post-CMY, but clearly the early indications of metrics like the demand for the hotels is telling you that, yes, the demand is staging a strong recovery.

Thank you very much.

And obviously we're going to have to stop.

Thank you. The next question is coming from Chad Bannon from Macquarie. Chad, your line is live.

Hi, afternoon. Thanks for taking my question. In the slide deck, you highlighted principal areas of development being Macau, which we just talked about, Singapore, which we talked about, and New York, which I was wondering if you could elaborate a little bit more on. But second part of that question is I know in the past you talked about other uh, potential opportunities in Asia, like a Korea or Thailand. Um, you know, years ago we talked about Japan wondering if, if, if those are going, um, you know, quiet at this time. So I guess firstly on, on New York and then secondly, uh, potential Asian opportunities. Thanks.

Let's just, let's revert your mind. I'll reverse it. Just, I think we, we all know Thailand has been discussions there and we're certainly looking at Thailand and that's no secret. It's been the press that, uh, Thailand's a possibility, so we're certainly looking hard at Thailand. They would love to have a presence there in the future. Japan, as you referenced, is not there, and Korea is nothing viable to speak of today. So we'll jump to New York, which is an extraordinary and unique opportunity, and I think for the winning bidder or bidders, it's going to be an amazing opportunity because of the very simple dynamic of a huge market with limited capacity. There's only a few casinos there. It's probably the only place in the U.S. where you can have a millions and millions of people, and yet there will be probably just a handful of casinos total. The win per unit there will be exceptional. The lucky winner is going to do very, very well. I think the evidence of the market is clear just by looking at the three operating properties that have their table gains and really don't have much of a – it's not a great product right now in New York as far as room capacity. It's still doing – approaching $2 billion with just slot machines. So our approach is very much an LDS. It's – anchored by an LVH historical approach, which is scale and quality. We're not looking to build a casino. We're looking to build not a regional casino, but rather a truly large hotel, a spa, convention space, dozens of restaurants, a new theater, a huge entertainment feature, a transformational product which will positively impact the community and grow tourism. A powerful statement. We're not looking to be in this thing in a limited way. We'll be all the way in. And we think if we do it, it will be transformational for the county we're working in very good for the people in the county, and something they'd be very proud of. And it will drive tourism, outsize tourism into Nassau. Our bid is very much traditional in the thinking of LBS, large scale with numerous non-gaming assets, lots of meeting space, probably 400,000 square foot meeting space. So I view New York very much very unique to the rest of the United States. It's a population in the many millions. You have just a couple of casinos. Very different here in Las Vegas. We've got a huge local market, but dozens and dozens and dozens of casinos. There you'll be basically alone. And so it's going to be very, it's an exceptional opportunity. It won't come along again. I think this is one and done. So we're trying very hard and we've been trying to do New York for a number of years, but it looks like this is finally someone's opportunity. Hopefully it's ours.

Thank you very much, Rob. And then, secondly, just wanted to ask another one on Macau. Now that you've had some more data in the market, Grant, it seems like there's an even bigger shift towards Peninsula, or I'm sorry, versus Takotai versus Peninsula than we've seen in the past. I was wondering if you could confirm that or if that's really just kind of a mix of, you know, a reflection of what we're seeing from the different modes of transportation. I'm wondering if that's a trend that could continue in 23. And then related to that, how are you thinking about your asset in the peninsula if there's CapEx opportunities? I know that's not part of the big CapEx plan. Thank you.

Rob, should I take that? Yes. Yeah, I think I haven't seen any data on the split between COTA and peninsula. However, it stands to reason, I think, structurally, you know, we see and we have always said that Cotai will become the primary hub. And I think even pre-COVID, we were already more than half of the mass revenues from Cotai. And I think that trend will continue. I think there's a lot of different reasons. But I think at its heart, the main reason is just the cluster of well-class integrated resorts that you have on Kotai and what this, I think, the next generation of these lifestyle consumers are looking for from Macau as a destination and all of the investments in non-gaming that are going into basically making these resorts even more desirable over the next 10 years, all of those structural factors surely will continue to push the balance of revenues towards the Kotar side, and that's a structural issue that will continue to evolve over the long term. As regards to, you know, we obviously have one asset on the peninsula. We do intend to reinvest in that asset, but, you know, clearly the majority, the vast majority of our capital we'll still be going towards our co-type properties.

Thank you very much. Appreciate it.

Thank you. The next question is coming from Brant Montour from Barclays. Brant, your line is live.

Hey, everybody. Good morning. Thanks for taking my questions. Starting on Singapore, I was curious if you could compare the spend per visitor that you're seeing there to what we saw in Las Vegas in 2020 and 2021. If that's sort of holding up in the same way, if the curve looks different quarter over quarter, and then if you want to throw Macau early days into that comparison, that would also be helpful.

Yeah, I think it's really hard to compare between markets. The key thing to note is that it's really all about pet up demand, consumer tourism experience, and the products that we offer and sort of the nature of those assets for high-quality tourism. So it's not really fair to compare between markets. The price points are different. Consumer behaviors are different. It really doesn't look the same. What is thematically similar is the pent-up demand story. And as I said before, Rob's seen it in his career in other locations. We experienced it here in Las Vegas in a very strong way. We saw it in Singapore in a very strong way, and it's still in effect. And we're starting to see it in Macau now, and it's coming on strong. So I think It's really the nature of consumer behavior as opposed to the specific price points in each market.

Okay, that's great.

It's hard to be... To Patrick's point, think about Singapore's market GGR versus Macau's. Macau could be a $25, $30 billion GGR market. It has been higher historically. And Singapore just doesn't have the capacity. And then Las Vegas is much more of a... It's got a gaming component, but it's got very strong non-gaming. So it's almost impossible to... to apples to apples, the driving forces, the scale of people in Macau, in mainland China, the accessibility to the justful market is so huge in Macau, and so is the product offering. The Grants Point, the peninsula, versus the Otay, it's got such enormous capacity and great product. That market, it's so outsized when it gets back to full capacity, it's hard to compare it to anything. It's so powerful.

Okay, thanks for that. And then on slide 22, the long-term commitment to Macau slide, on the capital, the left side of the slide, I was curious, you know, looking at your plans for the next 10 years, if you think you're going to be able to achieve return levels commensurate to recent projects that you've done in that market, you've enjoyed in that market.

Yeah, we sure do. Again, we You're talking to a bunch of people that have been doing business in the account for 20 years, and we've seen the returns. We've seen what non-gaming can do. Our theaters, our retail, our entertainment has driven billions and billions and billions of dollars to EBITDA, and they will in the future as well. We have no concerns whatsoever about investing and getting a solid return on non-gaming commitments. All they do is drive more visitation to the market. They're additives to the market. They're certainly going to drive more business to the account. We look at this as a 10-year starting commitment and going beyond that. Our commitment to Macau is as long as we can be there. And so we have no hesitation to invest or show the market a very, very considerable return. Just look what we've done in the past. I mean, on our current assets, mostly non-gaming. The lion's share of our investment in Macau is non-gaming, the great majority. That's worked out pretty well for us. So we think the next 10 years we'll continue that trend, and we're very happy and very committed to Macau.

Excellent. Thanks so much, everyone.

Thank you.

Thank you. The next question is coming from Ben Taken from Credit Suisse. Ben, your line is live.

Hey, how's it going? Just a quick one for me. Historically, capital returns been really important to you guys. Obviously, Macau is just beginning to ramp and there's a lot of areas to invest. But how are you thinking about the dividend these days? Is that still important? And if so, how should we think about timing of that?

You know, if Sheldon were here, he would say yay dividends.

I'm so tempted.

Someone put us on hold in Macau. Sorry about that. Sorry about that. Brief commercial from Macau. So as I was saying, you know, if Sheldon were here and we miss him dearly, he would be saying yay dividends. I think... You know, Las Vegas Sands is a growth company. We're back to growth. We're a development company. We do large-scale developments in key markets. But most importantly, we're also a return-to-capital company. And I think as our business returns and as we see normalization of cash flows, we're going to look to start the dividend again and be very shareholder-friendly. But at the end of the day, we're very focused on the strength of our balance sheet of new development. You heard Rob talk about New York. It's very exciting. There are other things that hopefully we'll get a chance to do in the near term. And opportunistically, I think, we'll continue to deploy capital where the highest returns are. And as part of that, the dividend will be fundamental to our shareholder return strategy. But I think we're going to wait and see where operating cash flow ends up, and we'll make some assessments at that point.

Got it. Thank you. Thanks, Ben.

Thank you. And the next question is coming from Steve Wychinski from Stiefel. Steve, your line is live.

Hey, guys. Good afternoon. So, Robert, whoever wants to take this, I mean, if we look at visitation in Macau over the last, let's call it week or so around the start of Chinese New Year, it does seem like it has been pretty strong. And I guess, is there any commentary or color you could give us about the spending patterns of these folks that are coming into the market? Meaning, are these folks gambling as much as they did before? Or is some of that spending being pushed more into the non-gaming side of the floor? And Maybe it's just too early to tell, but I think with how high Chinese savings levels are right now, I'm just wondering if you can provide any color around that.

Yes, yes, and yes. They're spending in retail, they're spending in gambling, they're spending, as we referenced earlier, Steve, it's just the right customers showing up. I think this is historically how it's worked out in recoveries where those who are the most aggressive gamers and retail spenders show up first, and we're seeing that strongly in Macau. It's a very good audience, a very strong audience. You'll see it in the market numbers when they come out. It's really gratifying for those of us who wait a long, terrible three years to see these days return, and they're returning. And I think the real question is, these customers that are now, the question is how many more are coming behind them? Because to your point, visitation has been mediocre out of mainland China relative to what had been previously. We're not even there, and yet we're hitting some pretty big numbers coming out of Macau in the market. So we're very enthused about it. It's not necessarily choosing gaming over retail. I think they're doing both, and then they're eating and shopping, having fun doing everything. So it's very typical of these recovery situations where the people who want it most show up there, and they're buying, they're spending, they're enjoying life again. And I think the Chinese are no different than the Americans who came to the U.S. markets and enjoyed themselves. And hopefully the party continues. It's just getting started, and we've got to, We've had a very encouraging start to this whole thing after the last three years. Grant, do you want to add some color to that and the issues you can raise that I haven't?

No, I think it's just as you said, the nature of these reopenings, you know, it will attract the high-quality customers first, and that's what we're seeing. And I think we saw that in Singapore in April as well. You know, we had much stronger recovery in the Southeast Asians overseas spend in Singapore versus the recovery in the tourist arrivals and I think Macau is also following something similar except for the fact that Macau has a much bigger advantage in being able to support visitation not just by international airlift regional airlift but also by land and sea as well, and domestic airlifts then connecting through southern China as well. So I think it's... Let's see what the pace of visitation recovery is like versus the revenue recovery. But so far, I think the pattern that we've seen in CNY does support that pattern. Yes, you're getting much stronger revenue recovery than we are in visitation.

I think our last comment, Grant, that's a great one, in that this is not an air-dependent market like Singapore. You don't need the airlines. You can come other ways. Access to Macau is mostly vehicular, a boat. So I think it's a huge advantage for Macau that as the population conquers the virus situation, gets more confident, there's no impediments to massive growth in visitation coming to Macau from China. That's a very positive point. But, Stephen, look, we are pleased we're seeing that they're spending in every direction. So we feel very fortunate. Hopefully it just continues to ramp up from here.

That's great color. That's it for me, guys. Really appreciate it.

Thank you. Thanks. As always.

Thank you. The next question is coming from David Katz from Jefferies.

Hi, David. Hi, this is Katz. Hi, this is Cassandra. On behalf of David, happy Chinese New Year to everyone. Yeah, I think a lot of my questions have been answered already, so I hope it's not getting repetitive. You've mentioned cost issues in all markets, especially in energy and wages. So could you discuss to what extent are those permanent and where we might be run rating in terms of EBITDA versus 2019 level today?

We're not going to discuss EBITDA at this point, except for what you've seen in Singapore. I do think energy is a vast thing. It does vacillate. It doesn't go one way, as you well know. Whereas wages, I think, worldwide are going to be an issue for everybody. And I think we will deal with that. I don't see them coming down a whole lot. Again, our resorts and our capacity constraint ability to price up. The great thing about our business is you can price up and retain your margins. And that, I think, will be our strategy in Singapore. and also in Macau. I don't think wages are going to decline greatly. I think Grant alluded to efficiencies, and I think that's important. We have a large workforce, and there are tens of thousands in Macau. So more efficient and better at doing what we do, that should be helpful. But I think we're all going to learn to live with, at this point, in the U.S. and Asia, higher wages appear to be in the structure for now. Patrick?

I think the key thing is is that By the nature of our business, we have resiliency in the face of inflation. As Rob mentioned, we have a lot of flexible pricing. Hotel rooms, gaming pricing, the way we operate food and beverage, the way we operate all of our non-gaming amenities, these are not long-term contracts. We have the ability to go with the market. So while there are some structural increases around wages, around inputs that we use, at the same time we have the ability to price because of the unique nature of our products, the experiences we offer, and to be fair to the positioning of the products that we have. You know, we've invested a lot over many years in both markets. This is the reason why they're so strong. So in our mind, inflation is a real thing. We have to take it into account, but we have the ability to work through it and actually grow the margins of our business over time.

Great. Thank you. And shifting to New York, have you shared or disclosed publicly what kind of investments you expect to make if you win the gaming license versus if you don't?

The current thought in our heads is about four to five billion U.S. dollars. Again, this is not a regional casino. This is a full-blown resort with mice, entertainment, retail, restaurants. It's the real thing. It's not meant to be a small-time investment. We're going all the way in building something transformational that drives tourism, and we think will be the biggest, in terms of the casino business, will be the biggest revenue generator.

Great. Thank you so much for taking my questions.

Thank you. Appreciate it.

Thank you. And the last question today will be coming from Dan Pulitzer from Wells Fargo. Dan, your line is live.

Hey, good afternoon, everyone, and thanks for sending me in. I guess first on Macau, I know VIP was historically about a quarter of your total business. I mean, to what extent, if any, have you seen this customer return, and in what form? Has it been more of a credit, a direct VIP-type customer? Or, you know, is this customer showing up in premium mass?

So one thing to note is the VIP contribution was much lower than that. So, you know, let's call it high single digits, low double digits historically. We've always been mass and premium mass driven. So it's on a contribution basis because of the, you know, the margins in premium and VIP and to be fair, junket business were always structurally much different than they were for our mass business. So we've always been led on a contribution basis by our mass play and our premium mass play. And you can tell that by our asset base and how we speak to our customers and the type of tourism we attract. That being said, I do want to turn it over to Grant for some additional comments.

Thanks, Patrick. Not a lot to add. I mean, all of our rolling business currently is in the premium direct program. And I think the second point is premium that is recovering much, much faster than premium direct. I think that's what we're seeing right now.

Got it. And then just to follow up on the New York investment, the $4 to $5 billion you mentioned, I mean, should we expect a commensurate return on that type of project as you've seen in your Asia-based investments or given the high density population, the spend per unit, you know, is it reasonable to think that there could actually be upside to that kind of 20% historical return?

I think for us, you know, we're very focused on return on invested capital. So, you know, Rob and the rest of the team really looks everywhere that we can to try to best deploy capital in the highest return outcomes. And so we would be interested in New York if we didn't think the returns were there. We think it's a very strong potential opportunity. And, you know, for us, it's going to be about the jobs we create, about the tourism we drive, about the investment in the local community, the relationships that we have. In every market that we're in, we're typically the largest trade partner with small and medium enterprise. We're looking to develop deep community roots so we can support the community and really show this industry is something that can benefit everyone. So we're very excited about it. We think the returns are there. Otherwise, we wouldn't be interested.

Got it. Thanks so much.

Thank you. Ladies and gentlemen, this does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.