In response to manage growth cap, Sands shuffles tables
The head of the Las Vegas Sands Corp. says Macau needs more hotel rooms to support a healthy convention business. And Sheldon Adelson says he’s ready to provide them.
According to GGRAsia, Adelson has applied to the Macau government to build a 2,500-room non-gaming project.
“One of the problems is we can’t bring in big healthcare groups here because there aren’t enough rooms,” Adelson said, referring to events that sometimes can draw tens of thousands of delegates. With increased supply, Macau can draw more visitors in the meetings, incentives, conventions and exhibitions sector, known as MICE.
“We’re building the Parisian, although the rooms will be four-star size, we’ll be selling them at three-star prices. That’s what the Macau government wants. We’ve submitted a request to build another building of 2,500 more rooms, non-gaming,” he added. The Sands Corp. saw its revenues in Macau drop 34 percent for the first quarter.
Macau is on notice from the Beijing government to diversify its economy, move away from its dependence on gaming, and limit table game growth to 3 percent per year. Six new projects in development on the Cotai Strip will add a total of 12,000 new hotel rooms. Greater diversity is also expected to draw more mainstream visitors and mass-market gamblers, which could help fill the void left by fleeing high rollers.
Morgan Stanley cautioned that hotel demand “is not unlimited” but could help increase overnight visitors to Macau, thus “improving the customer mix and spending per visitor for the mass segment.”
In keeping with Macau’s new diversification policy, the government has limited table-game growth to 3 percent per year. Union Gaming Research says Sands China will redevelop the existing Sands Macao “into a mall/hotel complex on the peninsula while reallocating table capacity to the Parisian.” The Parisian will have capacity for up to 450 gaming tables and 2,500 slot machines and electronic tables, reported GGRAsia. But the 3 percent cap on growth “has cast some uncertainty on how many tables all of Macau’s six operators will get for their under-construction new Cotai projects.”
Galaxy Entertainment Group Ltd. and Melco Crown Entertainment Ltd. may have to reallocate their tables if they want 400-plus tables each for their new properties opening on the Cotai Strip later this year.
