How Important Is Macau For Las Vegas Sands?

by Trefis Team
Las Vegas Sands
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Las Vegas Sands (NASDAQ: LVS) operates primarily in four locations – Macau, Las Vegas, Pennsylvania, and Singapore. Macau is the largest source of revenue for Las Vegas Sands and accounts for nearly 53% of the company’s overall revenue. The segment has seen robust growth, with revenue growing at slightly over 16% in 2017, as a result of strong traffic and higher occupancy rates, driven by the full operational year of The Parisian Macau. We have created an interactive dashboard analysis of Las Vegas Sands’ revenue growth that shows how much of the company’s future growth is likely to come from its Optical Communications segment. You can adjust the revenue and margin drivers to see the impact on the overall revenues and earnings from operations.

Increased Visitation To Drive Macau Revenue

LVS expects further improvement in Macau, as a result of strong traffic and higher occupancy rates. In addition, the company expects its diversified offerings in the Cotai strip and various new infrastructure developments in Macau to continue to provide solid growth. However, the renovation and rebranding of Sands Cotai – which is expected to be completed by 2020 – should result in some near-term pressure. We expect Macau to be the driving force for LVS in 2018, since the gross gaming revenues (GGR) in the region grew consistently for the 23rd straight month in June 2018. While the VIP market continues to see robust growth since the anti-corruption cooldown, a noteworthy trend in Q1’18 has been strong growth in the mass market segment, growing at just over 20%. This growth can be attributed to increased visitation by casual gamblers due to the improved infrastructure developments – namely the high-speed rail link and the Hong Kong-Zhuhai-Macau Bridge, both connecting Macau to Hong Kong. These tailwinds in the Macau casino market, coupled with its positioning in the VIP market, strong growth in the mass market, and an improving Chinese economy, should provide for another year of robust growth for LVS. Further, we expect its diversified offerings, coupled with new offerings in Macau, to provide long-term growth opportunities.


As evidenced by the above charts, the Macau segment is likely to contribute significantly to Las Vegas Sands’ growth in the next few years. The company is actively trying to deepen its penetration in the markets where opportunities are available, which could drive further growth over the long run.

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