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Sands Cotai Central seeks to be a “game changer”
After years of delay caused by financial troubles, Sands Cotai Central opened yesterday in a grand ceremony on the Cotai strip as senior executives of the integrated resort promised it to be a “game changer” in the competitive gaming and resort industry, while the group chairman indicated he is determined to maintain Sands’ leading position on the Cotai Strip.
The conference began with a video showing group chairman Sheldon G. Adelson touring the Cotai Strip years ago when it was still a barren piece of land covered with mud and he described his feeling back then as similar to “being in exile”. Now, featuring himself as the virtual “maker” of the strip, Adelson labeled the current development zone as a “compelling success”, and exhorted the media to add an “r” when mentioning the Cotai Strip; a reminder of the exclusive trademark.
And the chairman was adamant in safeguarding the group’s pioneering position on the strip, mentioning that decades ago when they started developing in Las Vegas, some potential partners expressed reservations and told him “you go first and I’ll come later”. But then when the project proved to be a huge success, Sands would not need them anymore: “We don’t need these people who didn’t give their confidence (to our development)”. The resort expected other companies, including Chinese brands to find their way to the Cotai Strip, but they would not be able to land the premier positions as the Sands group had.
Asked if the group would bring new partners to the strip, Adelson stressed their dedication and investment in the strip to make what it is today. “Let me answer your question by another question: Would you share a 100 million dollar lottery ticket with people who didn’t buy the ticket?” he said, “If you will, then I’ll do it.” He also disclosed that the company had already tendered applications for new phases of development near the Four Seasons Hotel on the Cotai Strip, showing ambition to reinforce their advantageous position on the strip. But he would not reveal details of the new projects, only mentioning that more than 3,000 hotel rooms would be added to the portfolio. Local rivals including Wynn and MGM are also planning expansion projects on the strip but are waiting for government approval.
Local media in Macau expressed concerns that after the completion of Sands Cotai Central in 2013 around one third of the hotel rooms in the city would be controlled by the group and might result in Sands’ dominance in the hotel market. A similar situation also applies in the convention and exhibition sector in which the group also enjoys a superior advantage on the Cotai Strip. The Macau Daily News said “the authority’s decision not to approve new land parcels to the group for development projects on the Cotai Strip years ago will ensure that the risks of monopoly by any single company are alleviated”. The paper with the largest circulation in Macau also urged the government to encourage more competitors to enter into the market to promote positive competition and improve the structure of the casino-resort sector.
Mr Sheldon Adelson disclosed that the company had so far spent USD 4.4 billion to develop the Sands Cotai Central project and more will be invested before completion in 2013. But he would not speculate on how long it would take for the group to recover the investment and start building net earnings.
Adelson attributed the years of delay of the project to the international financial crisis in 2008 after financing dried up. But he stressed not a penny was taken from Macau for the group’s development project in Singapore during the crisis. Government restrictions on foreign workers also pushed back the opening date, he explained.
As to the timing of the opening, Sands Macau President and CEO, Edward Tracy said it was in time to meet the best development period in Macau when gaming and tourism were experiencing the best growth period. He stressed that the casinos on the Cotai Strip were different from those on the Macau Peninsula, especially those closer to the Barrier Gate where visitors tend to stay a shorter period of time and only engage in gaming. Those on the Cotai Strip have more leisure and entertainment elements and would not be in direct competition with casinos elsewhere. Tracy expected visitors to the resort to stay longer in order to enjoy leisure and shopping activities. He estimated that the average time of stay by visitors to Macau would reach 3.6 days in five years’ time, compared with the current 1.5 days. Sands is expected to benefit from the growing number of middle-class visitors drawn to shopping and other non-gambling attractions at their Cotai resorts.
“Asia’s biggest launch party”
Following a high wire performance by sky walker Jade Kindar-Martin and his wife, who traversed a 1,700-foot distance 500 feet above the ground on a wire less than one inch thick, the opening ceremony, said to be “Asia’s biggest launch party”, was kicked off to mark the arrival of an integrated city comprising 1.2 million square feet of retail, entertainment and dining facilities, as well as meetings and convention space.
As to gaming space, the resort currently comprises 300,000 square feet but the number of gaming tables was not specified. But according to AP the first phase features 340 gaming tables and 40 VIP rooms for high-rollers. Another 200 tables will be added later this year. The resort will open in stages and be completed in 2013 when the property will have over 5,800 hotel rooms and suites, 1.2 million square feet of meetings and convention space, and 300,000 square feet of gaming space.
Gaming revenue has been growing dramatically in recent years, powered by the numerous wealthy high-rolling gamblers from mainland China, who are estimated to account for more than two-thirds of total gambling revenue. But the industry is heavily reliant on the wealthy mainland Chinese gamblers in the VIP rooms run by junket operators.
Events were held from early morning to the evening yesterday and senior executives were all there to meet the VIPs and the media. In a press conference attended by hundreds of journalists from around the world, the management team promised to “change the landscape” of the industry.
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