Adelson expects good times for Sands despite downturn - Business

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Aug. 29, 2008
Copyright © Las Vegas Review-Journal

Adelson expects good times for Sands despite downturn

By JEREMIAH MARQUEZ
THE ASSOCIATED PRESS

U.S DEVELOPER UNVEILS MALL PLANS FOR MACAU

HONG KONG -- U.S. mall developer Taubman Centers Inc. unveiled its foray into the booming gambling city of Macau on Wednesday -- a giant upscale shopping center aimed at capitalizing on China's growing appetite for luxury goods.

The 920,000-square-foot Mall at Studio City will boast about 140 stores from Gucci, Cartier, Burberry, Dolce & Gabbana, Prada and other brands in one of the biggest concentrations of high-end retailers outside New York and Paris, the company says.

Scheduled to open in 2011, the center is the showpiece of a $2.5 billion joint venture gambling resort project along the city's Cotai Strip.

Macau, the only place in China where casinos are legal, surpassed the Strip as the world's top gambling center in 2006. Now Taubman and others are betting that the tiny former Portuguese colony, like Las Vegas, will become a shopping mecca. Their sights are set largely on Chinese consumers.

Already accounting for 18 percent of global luxury sales, Chinese are likely to exceed Americans and Europeans as the largest revenue group in six years, said Morgan Parker, president of Taubman Asia Limited.

"Macau is the fastest growing retail market in Asia," Parker said. "Together with Hong Kong, Macau represents the very best access portal into China's growing appetite for luxury."

Others agree. Wynn Resorts Ltd. and Las Vegas Sands Corp. have set up major retail centers at the Wynn Macau and Venetian Macau. A Four Seasons' center opened last month sports many of the same tony brands.

Parker dismisses any worries about a retail glut, saying 40 million tourists were expected to pass through Macau by 2010. And whereas Las Vegas -- among the world's most successful shopping destinations -- has about 350 feet of retail space for each hotel room, Macau will have about 150 in the next couple years, he says.

"We're only really touching the tip of the iceberg," he said.

Taubman, founded in 1950, in the U.S. owns or manages 24 shopping centers in 11 states. The company calculates its market capitalization at $7 billion.

THE ASSOCIATED PRESS

Las Vegas Sands Corp.'s Venetian Macau, which opened a year ago, has seen more than 24 million visitors pass through its doors.
Photo by Jeff Scheid.

MACAU -- Las Vegas Sands Corp. Chairman Sheldon Adelson insisted his company would thrive despite worsening economic conditions as he marked the one-year anniversary Thursday of his $2.4 billion Venetian resort in this southern Chinese gambling city.

Since its opening, the mega-casino resort, the biggest in the world, has gotten some 24 million visitors and helped launch what Adelson envisions as a massive, concentrated resort area. Adelson is betting the Cotai Strip will become one of the world's top tourist destinations.

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However, the American billionaire, whose company posted a second-quarter loss amid a weakening Las Vegas market, faces a host of challenges, from slowing global growth to fierce competition from Wynn Resorts Ltd. and others.

Adelson maintained Sands could fare well because of its focus on luring business travelers for conventions, exhibitions and other industry meetings held even during recessions.

"Our entire strategy avoids the possibility of an economic slowdown, a recession," Adelson said at The Venetian Macau.

He and other Sands executives also argued that possible stricter visa rules for mainland Chinese tourists, who make up of the majority of Macau visitors, would affect them less than their rivals. That's because company's Macau properties are less reliant on Chinese visitors than other casinos, they contended.

"The Cotai Strip is not just ... a series of integrated resorts for Chinese people only. It's for all Asians," Adelson said.

Earlier Thursday, he was on hand as Sands opened the upscale Four Seasons Macau, next to The Venetian, the latest project in Adelson's $13 billion master plan to develop Cotai. The company has about 23 percent of the gambling market in Macau, with The Venetian taking in $2.18 billion in revenue during its first 12 months.

Adelson also is building a resort in Singapore and has his sights on other countries in Asia, which executives say will soon account for 70 percent or more of company revenue. On Thursday, Adelson said he had recently met with government officials in India.

"We would like to build a Cotai Strip in India. That would not affect Macau whatsoever. The market in India with more than 1.1 billion people will justify more than one Cotai Strip," Adelson said. "If (the Indian government) wants to invite us there, we'll be happy to come in to spend between $12 billion and $14 billion."

Macau, just an hour by high-speed ferry from Hong Kong, has seen its gambling revenue grow rapidly since the government ended Hong Kong tycoon Stanley Ho's monopoly on the gambling industry after Macau was returned to Chinese rule from Portugal in 1999.

China's only city with legalized casinos, Macau has already overtaken the Las Vegas Strip in gaming revenue to become the world's most lucrative gambling center.

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. Ed wrote on August 30, 2008 07:27 AM: Adelson is a modern day industrialist employing tens of thousands with decent pay & maybe the best benefit package in gaming. All on the outside looking in are envious so of course they will fling mud. Long live this visionary. Jdoe wrote on August 29, 2008 07:33 PM: Nope, not a union stooge...just telling it like it is. Douglas- If you haven't seen all the bad press about Adeleson over the years then you must not have paid attention. Do some research online before you make your severe ignorance obvious again. morgan wrote on August 29, 2008 05:51 PM: douglas maybe the complaint about buisnesses morals could also be someone that objects to adelsons failure to pay contruction bills for the work at his properties. if i were to steal hundreds from you or your family you would surely expect that i would go to jail. this guy got out of paying millions of construction costs because of greed and gets away with it in this life. how about the recent judgment against him for trying to renig on the millions owed to his macau connection. i am not a union member, but i do know the difference between an honest and dishonest business person. casinocon wrote on August 29, 2008 03:09 PM: I always hated the Venetian's casino. I liked the fancy rooms okay, but the pool is awful, and the shopping area is weird. The Palazzo is just plain boring. If not for the convention business the Sands hotel/resorts would be a total loss. douglas wrote on August 29, 2008 01:20 PM: those who complain about a businesses' "morals" often seem to be union stooges complaining about non-union venues. similarly, the anti-walmart threads are amusing in the shallowness of the spins. JDoe wrote on August 29, 2008 07:03 AM: If only Aldeson's business morals were as good as his casinos!