Sands China says it will adopt a significantly more aggressive approach to customer reinvestment in Macau after admitting it has underperformed in the market in recent quarters.
Despite seeing positive signs from the recent completion of The Londoner Macao’s multi-billion-dollar transformation, the company’s executive team stated during Thursday’s 2Q25 earnings call that market share and EBITDA levels were not where they needed to be. As such, Sands China has already begun overhauling its approach to customer reinvestment and plans to continue in the same vein as it targets an annualized EBITDA run-rate of US$2.7 billion – up from around US$2.2 billion currently. The company reported Adjusted Property EBITDA of US$566 million in the June quarter.
“We have underperformed in this market,” said Rob Goldstein, the Chairman and CEO of Sands China’s parent company Las Vegas Sands.
“We have not addressed enough as it relates to customer reinvestment. We believed our buildings would be enough [to attract more customers]. We were wrong. And so, throughout the quarter we changed our approach to enable us to increase our market share and EBITDA.
“We’ve now jumped in the water. We’re not leading the market – we’re simply in the mix now and that’s a good thing.”
According to Goldstein, Sands China should be looking for its two core assets – The Londoner Macao and The Venetian Macao – to generate US$2 billion in combined EBITDA annually, while Four Seasons and The Parisian should each target US$300 million and Sands Macao US$100 million.
“Our short-term goal, my goal, is that we can get that US$2.7 billion run rate and come off the bottom here,” he said. “I think at US$2.2 we’re just not performing well enough. We have the best assets. This is just our acknowledgement that we did not do a good enough job in that environment and we’re doing it now. We have full faith in our team over there and our assets to perform and get us back in the game.”
Grant Chum, Sands China’s CEO, President and Executive Director, explained that the company had started to implement a more aggressive customer reinvestment program during the second half of the June quarter with “encouraging initial results”.
“I think we will continue to adjust to the market conditions as and when necessary and we’re also looking at opportunities for us to perform better at our smaller properties – The Parisian and Sands Macao,” he said. “Overall the reception to Londoner has been phenomenal and we’re getting positive feedback from customers, so that’s obviously growing nicely but the rest of the portfolio we have to adjust our reinvestment levels according to the product.”
Patrick Dumont, President and COO of Las Vegas Sands, added, “We’re not where we want to be in Macau. We feel like we’ve made great investment, we have great product and we believe we can grow EBITDA from here. We have work to do in our reinvestment programs, we have things we think we can do to be more competitive and we’re going to take some action. We think we have an approach that in the long run will create growth for us in terms of revenue and EBITDA.”
The issue of Macau’s competitive promotional environment has been a hot topic post-COVID, to the extent that Melco Resorts and MGM China openly threw barbs at one another during respective earnings calls last year.
Some companies have since played down this competitive environment, insisting that activity had calmed down to some extent, however Chum said this morning that he didn’t see this as representative of the reality.
“The market continues to be very competitive,” he said. “The intensity hasn’t slowed at all. The difference this quarter is that we are in the mix now in terms of reinvestment levels into the customer – and the response is encouraging.
“That process will continue and we will continue to evaluate but we don’t expect the competitive environment in Macau to relax anytime soon.”
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