In the third quarter of this year, the Las Vegas Sands (LVS), a casino giant run by Sheldon Adelson, did not have the success it had hoped for. Despite Las Vegas recording record sales last month, sales dropped 3.6 percent and net income dropped 6.6 percent. While the company may not excel in the country, it is doing really well abroad, and this performance is expected to drive success for at least another five years, if Bernstein and analysts are correct.
The broker issued a statement yesterday on the company’s health, noting that the huge size of LVS in Macau and Singapore will go forward. Bernstein analysts, who regularly report to Vitaly Umansky, Eunice Lee, Kelsey Zhu, LVS and other casino companies, claim that LVS is a “mainly Asian gaming company”, with 90% of profits coming out of Asia now. They added:
“In Macau, Sands manages about one-third of the hotel room inventory. Sands has established a strong foothold in the mass market sector as Macau Games become a supply-oriented (and limited hotel room supply) market.
“In the past, Sands China had quantities of rooms, but it did not reach competitive high-quality rooms and luxury suites (compared to other operators).
However, sand is now redeveloping/upscaling its properties as well as adding capacity. Once the redevelopment is complete, Sand will benefit from the anticipated growth of the premium mass gaming sector in Macau.”
Sands China, an LVS subsidiary that oversees its Asian operations, is involved in a number of initiatives to further strengthen its activities in the region. In Macau, Sands Cotai Central has been converted into London Macau, offering 600 suites in 1,200 existing hotel rooms. Two all-suite hotels will also be added, including 370 Tower Suites and the Grand Suite, which offers 2,909 Four Seasons.
In Singapore, a total investment of $3.3 billion is being made between the two entities by agreeing to maintain The Genting Singapore and Duopoly. The money is used to revamp and expand the operations of companies in the country.
Bernstein analysts said: “Sand sand seldom sees an increase in net rooms, but the redevelopment of Sandcoy Central and the opening of the Four Seasons Tower Suite will significantly increase Sand’s product offerings to better appeal to premium customers. .”
Given its strength in Asia, LVS has always been considered a strong contender for integrated resort licenses in Japan. However, the company has now expressed concern over the price – at least $10 billion – and may be too much to swallow it. Rob Goldstein, the company’s president and chief operating officer, told reporters about a week ago, “No matter how good the business is, stop by and ask, ‘Is that prudent? Can you really deploy, can you get a return?’ ”
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