NEW YORK—Las Vegas Sands Corporation is putting billions of dollars to work in an effort to expand its reach globally.
Speaking at the Strategic Decisions Conference in New York, President and COO Mike Leven said the Asia/Pacific region in particular holds a wealth of promise for LV Sands. He singled out China as the biggest emerging mass market for the industry.
“They like to play, they like to buy,” he said during the conference, which was webcast.
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Mike Leven, president and COO, Las Vegas Sands Corporation. |
While there are concerns of slowing gross-domestic-product growth and a real-estate bubble forming in the country, Leven said the company has not seen any direct impact.
“It doesn’t seem to bother us,” he said. “It’s certainly very vibrant.” He said 90% of the company’s earnings before interest, taxes, depreciation and amortization came from Asia during the first quarter.
LV Sands will finish building out its massive hotel development in Macau, Sands Cotai Central, by the end of the year, he said. The development includes a 4,000-room Sheraton; 1,200-room Holiday Inn; and a 600-room Conrad hotel. The Holiday Inn and Conrad hotels opened 11 April.
When all is said and done, LV Sands’ investment in Macau will reach $15 billion, he said. Approximately $8 billion already has been invested. “This is a long-term, profitable place to be,” Leven said.
The average stay in Macau—LV Sands’ most profitable region—is 1.1 nights, so funneling a mass market to China’s special administrative region is essential for success, he said. As infrastructure around Macau is built up, and more rooms are added, that mass market will be attracted in larger numbers.
“We’re very pleased about what we’ve seen so far,” he said. “It doesn’t seem too slow to us. We’re meeting our expectations.”
Macau is not alone on the development radar of LV Sands. Leven said the company also is looking at sites in Ho Chi Minh and Hanoi in Vietnam. He added that Vietnam would likely be the next Asia/Pacific country to see a LV Sands development project. Politically, Vietnam offers the path of least resistance as far as getting development off the ground.
That said, Japan and South Korea are Nos. 1 and 2 on Leven’s list for casino-hotel development. He said the countries offer strong meetings, incentives, conventions and exhibitions business; consumer spending is strong; and the countries have shown good gaming capabilities.
“You could build a Cotai Strip in five, six Asian countries and not dent the market,” Leven said.
European development
Leven also shed light on the company’s plans for Europe. He said a decision will be made this summer as to which areas of Spain could see casino-hotels.
LV Sands sees potential in Europe despite the ongoing debt crisis. “(Chairman and CEO) Sheldon (Adelson) calls it ‘Euro Vegas’ but maybe the euro won’t be around when we go to build it,” he joked.
The earliest LV Sands would start spending money on such development in Europe would be mid-2013, he said. The first phase of the development would call for an investment of $9 billion, he added, with $6 billion of that being financed.
All the talk of the looming dangers in Europe doesn’t appear to faze Leven. He said it wasn’t long ago that people were concerned about the long-term prospects of the now prospering markets of New York and Brazil.
“We think Europe is undervalued today,” Leven said. The size of the population on the continent and the potential for government incentives could aid LV Sands. The company is aiming for a return on investment in Spain of more than 20%, he added.