Las Vegas Sands Explores Aggressive Strategies for Macau Growth

Las Vegas Sands Corp's operations in Macau have not performed up to expectations. According to Robert Goldstein, the group's chairman and chief executive, their current competitiveness falls short, particularly in providing customer incentives and increasing earnings before interest, taxation, depreciation, and amortization (EBITDA) from their Macau properties. Las Vegas Sands manages casino resorts in Macau through its subsidiary Sands China Ltd and operates the Marina Bay Sands in Singapore.

Goldstein remarked at the recent Bernstein 41st Annual Strategic Decisions Conference that Macau has transitioned into a market significantly driven by incentives. "Macau has always been a market predicated on product, on retail, and quality of food, and the product drove revenue. What's happened is it's gotten [a] much more incentive-driven market – direct incentive to the customer – [and] we've not played that game as well as others have," stated Goldstein.

He acknowledged that although the competition in Macau is fierce, Las Vegas Sands needs to become more aggressive to reclaim its market position, even if this strategy sacrifices some margin points. Goldstein commented on the imperative nature of being market-sensitive, noting that their current results are not satisfactory. "You've got to compete, and you've got to be market sensitive; and frankly, we haven't been. We have been good enough, but our numbers are disappointing to me," he said.

Financial Downturn and Strategic Adjustments

The corporation's latest fiscal report reveals troubling figures for Macau operations. In the first quarter of 2025, net revenues declined by 5.6 percent year-on-year to just under US$1.71 billion. Additionally, adjusted property EBITDA was reported at US$535 million, a 12.3 percent decrease from the previous year.

Acknowledging the shortcomings, Goldstein suggested that the group's operations in Macau are underperforming relative to their potential. "If Macau [operations] were doing what they should be doing, it would be a US$5.5 billion of cumulative [group-wide annual] EBITDA, which would put us where we want to be," he mentioned.

Despite ongoing investments in property upgrades in Macau, the expected returns have not materialized. Goldstein realized that product quality alone would not suffice, noting the crucial role of customer incentives, such as direct incentives and discounts, even if these initiatives might not positively impact margins. "I was wrong because I thought the product would drive [results], but equally important today is incentives to the customer. Direct incentives, cash and discounts and things like that, which are not margin positive, but they're EBITDA positive."

Navigating Market Challenges and Future Outlook

Goldstein also elaborated on the shifting dynamics of the Macau market, emphasizing that visitor expenditure behavior has changed. Previously, visitation translated directly to spending, but this linkage appears to have weakened. "Visitation used to be equivalent to the spend, but they have decoupled now, and visitation can be pretty good, but the spend isn’t," he explained. The executive referenced historical post-COVID recovery in the region, with gross gaming revenue (GGR) peaking around US$27 to US$28 billion but encountering a plateau more recently.

Additionally, broader economic issues, alongside the decline of junket activities and the rise of online gambling, have impeded momentum. Despite current trends, Goldstein is focused on attracting the right clientele to enhance profitability, admitting that they need to excel competitively. "We’ve not done as well as we could have done competitively, and our last quarter was disappointing. So, we’re hoping for improvement in our operating philosophy and our operating approach to accelerate our own EBITDA within the Macau market."

In Singapore, however, Las Vegas Sands’ Marina Bay Sands complex continues to thrive. Described as a venue that attracts high-end customers, it remains a robust segment due to its appeal to elite clients across Asia. The group also completed significant renovations at Marina Bay Sands, marking a key milestone in its extensive refurbishment program. Future plans involve an ambitious continuation of their investment strategy. Ultimately, Goldstein’s candid reflections underscore a learning curve and a commitment to adapting strategies to enhance profitability in Macau.

Source: LVS boss calls Macau results disappointing, says group needs to be more aggressive, GGRAsia, May 30, 2025.

Posted by Wizard
Jun 02 2025