Earnings Call Transcript
LAS VEGAS SANDS CORP (LVS)
Earnings Call Transcript - LVS Q1 2023
Operator, Operator
Good day, ladies and gentlemen, and welcome to the Sands' First Quarter 2023 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, but we will open the floor for your questions and comments following the presentation. It is now my pleasure to turn the floor over to Mr. Daniel Briggs, Senior Vice President of Investor Relations at Sands. Sir, the floor is yours.
Daniel Briggs, Senior Vice President of Investor Relations
Thanks, Paul. Thank you all for joining the call today. With me today are Rob Goldstein, our Chairman and Chief Executive Officer; Patrick Dumont, our President and Chief Operating Officer; Dr. Wilfred Wong, President of Sands China; and Grant Chum, EVP of Asia Operations and COO of Sands China. Today's conference call will contain forward-looking statements. We will be making those statements under the safe harbor provision of federal securities laws. The company's actual results may differ materially from the results reflected in those forward-looking statements. In addition, we will discuss non-GAAP measures. Reconciliations to the most comparable GAAP financial measure are included in our press release. We have posted an earnings presentation on our website. We may refer to that presentation during the call. And finally, for the Q&A session, we ask those with interest to please pose one question and one follow-up question, so we might allow everyone with interest the opportunity to participate. This presentation is being recorded. I'll now turn the call over to Rob.
Rob Goldstein, Chairman and Chief Executive Officer
Thank you, Dan, and thank you for joining the call. The results speak for themselves. There is a powerful recovery underway in Macao in both gaming and the non-gaming segments. The future looks very good for both markets. Our commitment to investing in both Macao and Singapore has never wavered. In Macao, following the relaxation of travel restrictions, increased visitation has driven gaming volumes, retail sales, and hotel occupancy during the quarter. In other words, business is back. Sands China is in a unique position to capture the opportunities. Our diversified IR model with continuous investment in non-gaming segments MICE, hotel suites, live entertainment, retail, food, and beverage positions us well to deliver strong growth in the years ahead. Our focus is on all segments in the Macao market, including international tourists. We're excited to have the opportunity to deploy more capital to expand our non-gaming offerings in Macao. The $3.8 billion commitment we made as part of the concession tender is just the baseline. We will invest more in this extraordinary market. I look forward to everyone having the opportunity to see, to witness The Londoner and the Four Seasons. The quality of our new products is exceptional. Marina Bay Sands delivered EBITDA of $394 million for the quarter. Mass win was an all-time property record of $549 million. Rolling volumes have nearly equaled the 2019 level. Our $1 billion suite and casino renovation program is progressing. More suite inventory will continue to come online throughout the remainder of the year. We will have 400 suites available by the end of 2023, up from just 150 prior to our renovation. Okay, let's take some questions, and please ask away.
Operator, Operator
Thank you. The floor is now open for questions. The first question today is from Joe Greff from J.P. Morgan. Joe, your line is live.
Joe Greff, Analyst
Hey, everybody. Congratulations on these results.
Rob Goldstein, Chairman and Chief Executive Officer
Thanks, Joe.
Joe Greff, Analyst
Rob, Patrick or Dan, whoever wants to take this first one. In Macao, presumably, March was better than February, and February, obviously, was better than January from an EBITDA and an EBITDA margin perspective. I was hoping you can maybe help us understand maybe the margin exit rate coming out of the quarter as we head here into the second quarter. If you've reported 31% margins for the quarter, March was something much higher than that. I was hoping you can help us maybe understand the cadence of EBITDA generation by month and maybe the same thing for margins by month, just so we're, I guess, thinking about it the right way in terms of our projections going forward.
Rob Goldstein, Chairman and Chief Executive Officer
Joe, I'll ask Patrick to take it. But before I do, I just want to emphasize that Macao is still in the early stages of returning to a more normal operating environment. This first quarter does not fully represent what can occur in Macao or what will happen in the future. So, I wouldn’t describe it as being in a normal operating mode. As you mentioned, there is a clear acceleration in revenues, and that will lead to improved margins. Patrick, do you want to elaborate further?
Patrick Dumont, President and Chief Operating Officer
Thanks. Rob. Joe, it's an interesting question. I think we've been very focused on margins for many years at SCL. Unfortunately, operating environment during the pandemic made it very hard to see the benefit of some of the work that the team has done over the years to make the business itself more efficient. I think in the long run, we're going to look to see some significant operating leverage and the performance out of Macao, particularly as we reach a higher level of performance in a more normalized environment. I will say that there was a material difference in performance across the quarter. January was obviously impacted because, on January 8, the opening occurred. And then, subsequent to that, February is typically a very slow month post the Lunar New Year. But March was a very exciting time. A lot of things were going full steam ahead. It's very exciting to see the recovery, the increase in tourism. And so, margins did recover to a more normal level. There's a lot of noise in the quarter because of the start-up. But I think overall, our long-term outlook for margins is quite strong. I think we've done a good job managing costs historically. I think the business itself was set up to be efficient. And I think in the long run, given the mix of business, we should see a favorable margin operating environment. Grant, I don't know if you have any comments you'd like to add to that.
Grant Chum, EVP of Asia Operations and COO of Sands China
Sure. Yeah, thanks, Patrick. Yeah, maybe I can just give some color on the March trends. I think, Joe, you're right, the market experienced strong recovery through the quarter. So, pretty much across all operating metrics, March was better than January and February average. I mean, just as a starting point, in Macao, overall visitations city-wide were up 22% in March versus the first two months of the year. For our portfolio, the gaming volume, non-rolling drop and slot handle were both up 10% in March versus the first two months. Rolling volumes accelerated a lot more than that during that month, not least because we're starting to get some traction on the foreign VIPs coming to Macao, to our properties. Hotel occupancy improved. Occupied room nights increased by 8% in the month versus the first two months, as we were able to operate more hotel rooms with the additional manpower that's coming on board in the second half of the first quarter, and that will significantly increase further into the second quarter. So, overall, yes, I mean, March was a very pleasing month in terms of evolving trends. And as Patrick said, operating margin did recover and did recover more in March, but hopefully this is just the beginning.
Joe Greff, Analyst
Great. Thank you for your comments there. You mentioned that 31% of your rooms in Macao were out of service related to labor constraints. Where does that stand now? And can you talk about labor constraints now? And how are you remedying that?
Grant Chum, EVP of Asia Operations and COO of Sands China
Sure. Rob, shall I take that?
Rob Goldstein, Chairman and Chief Executive Officer
Yes, please, Grant. Yeah, you're closest to that. Sure.
Grant Chum, EVP of Asia Operations and COO of Sands China
I mean, hotel room inventory, Joe, availability, the actual availability for the first quarter, yeah, was around 7,700 rooms for SCL portfolio-wide. So effectively, we were accommodating as many rooms as we could, given the manpower constraints during the quarter. As I just referenced, it did improve somewhat in March as the additional hiring of the labor came on board, and the Macao government and the labor bureau have been very supportive in helping us to bring on the labor that we need to operate, especially the hospitality side of the business, the hotel and restaurants. As we go into the second quarter, we would expect that, on average, second quarter, we can reach 10,700 rooms in terms of operating capacity. So that's roughly 3,000 additional hotel rooms that we will be able to operate in the second quarter, and that, obviously, takes us up to the much closer to our physical available inventory. And we will reach the 12,000 probably sometime in the third quarter, in time for the summer peak season, as additional hiring and training completes through the second quarter.
Rob Goldstein, Chairman and Chief Executive Officer
So, Grant, is it safe to say the labor issues are not event for the entire market by summertime?
Grant Chum, EVP of Asia Operations and COO of Sands China
Yeah, Rob, I think for most of the market, for the second quarter, it's effectively a non-issue from a hotel operating capacity. Obviously, the size of our inventories is the biggest. We'll take a little bit of time to get up to full capacity, but obviously, there is a big difference already that we can see between operating 10,700 rooms versus 7,700.
Rob Goldstein, Chairman and Chief Executive Officer
Thanks, Grant. Good job.
Joe Greff, Analyst
Thank you, guys.
Rob Goldstein, Chairman and Chief Executive Officer
Okay. Thank you.
Operator, Operator
Thank you. The next question will be Carlo Santarelli from Deutsche Bank. Carlo, your line is live.
Carlo Santarelli, Analyst
Hey, everybody, thank you. Rob, just as it pertains to MBS, obviously, now Macao has gotten up and running and you're starting to see things normalize with obviously the comments there on March. Have you guys seen anything change behaviorally? I mean, we see the results. It doesn't look like anything's changed. But I was just wondering if there was anything that you've seen change in terms of demand around either the high end or the premium mass segments in MBS post kind of resumption of activity in Macao, as it continues to ramp?
Rob Goldstein, Chairman and Chief Executive Officer
I initially thought we would have a dominant position with high-end premium customers in Asia, particularly in Singapore. While Singapore is performing well, matching our 2019 rolling volumes, I've been pleasantly surprised by the strong international demand in Macao, where rolling volumes are significantly higher than I expected, potentially exceeding $20 to $25 billion annually. This growth in Macao hasn't negatively affected Singapore; however, there is a limit to the available spending. Singapore has achieved record results, with astounding slot performance exceeding 900 machines per unit, an unprecedented figure in my experience, alongside our non-rolling win exceeding 6 million daily. This is remarkable considering the challenges we've faced with room availability and our casino undergoing renovations, plus a yet-to-fully-return Chinese consumer base in Singapore. The positive news is that Macao is appealing to a robust international and high-end Asian clientele, and we are still performing well in Singapore. It seems we might be sharing significant rolling business between Singapore and Macao for the foreseeable future, which is a pleasant realization. I believe the slot business and non-rolling aspects in Singapore are just the start of a strong trend. Once we address the issues with our rooms and casino, there’s no telling how far it can go. We could potentially see earnings of $2.5 billion to $3 billion in those areas in the coming years. We're pleased with our results, and it’s impressive for Singapore to achieve this early success without a complete recovery in China. I believe we can reach $500 million a quarter in the near future as conditions improve. Overall, we're satisfied with both markets for different reasons.
Carlo Santarelli, Analyst
Great, that's helpful. As a follow-up, I have a question regarding your premium mass business and base mass business. It seems like both are recovering compared to the first quarter of 2019, similar to how visitation is today when compared to 2019. Are you surprised by this trend?
Rob Goldstein, Chairman and Chief Executive Officer
It is to me. I think if we go Page 14 of our deck to see the visitation being like 40% and yet see a recovery where it's at, it's very encouraging for future. The trajectory of Macao feels very good to us. And as Joe alluded to, the growth between January, February, March, it looks very positive and not be encouraged when you see. We made $400 million roughly without visitation really coming back very much, without hotel rooms being fully occupied, without a lot of impediments, a lot of headwinds and yet here we are. So, yeah, it's very encouraging for us and to the market. And of course, we're the biggest beneficiary of the recovery of base mass since that's our dominant position. But I want also allude to the fact that we believe with our new Londoner and Four Seasons suite and physical product, we're going to compete very favorably, not just the base mass, not just retail, we're going for the very top-end of the market as well to dominate that, and we believe we can do it in both the rolling and non-rolling segments. We have both scale in terms of suite product, but also great aesthetic. When you see what we've done, we were there, and you see the new Londoner, you see the new Four Seasons, I promise you, you will be overwhelmed with the quality of the product. What that team has done is exceptional work. So, for us, we see no segment in Macao to our competitors. We want to be first in every category. I believe it's possible with our new products.
Carlo Santarelli, Analyst
Great, thanks very much.
Grant Chum, EVP of Asia Operations and COO of Sands China
Rob, maybe I can just add something on the...
Rob Goldstein, Chairman and Chief Executive Officer
Yes, please, jump in, Grant.
Grant Chum, EVP of Asia Operations and COO of Sands China
To add to Rob's comment about the premium mass versus mass, it appears from the presentation that we have recovered at a comparable rate in both segments compared to the first quarter of 2019. However, the recovery has been primarily driven by premium mass in terms of volume and customer count, with an increase in customer quality and spending per customer. The comparison of wins with 2019 is largely related to holding issues in the premium mass segment for both years. Overall, the premium mass gaming volume, drop, and headcount have recovered faster than the base mass. As Rob mentioned, we have been effectively outperforming in the premium segments, both VIP and premium mass, as demonstrated by our market share in the first quarter. Our non-rolling drop has reached two-thirds of the first quarter of 2019 levels, aligning with the overall market recovery in mass, despite a greater reliance on base mass. As the lagging base mass begins to recover, particularly with the addition of more hotel rooms in the city and a rise in visitations and improved transportation and logistics, we should greatly benefit from this recovery. Evidence of this can already be seen in our stronger performance in the electronic gaming market, with slot handle recovering to over 73% of 2019 levels. Hong Kong's base mass, which comprises a significant portion of slot and table games, has rebounded more quickly, as reflected by visitations reaching 75% of pre-pandemic levels in 2019. This outperformance in electronic gaming has been robust, both in absolute terms and in comparison to the market.
Carlo Santarelli, Analyst
Certainly. Thank you very much for the additional context. I appreciate it.
Rob Goldstein, Chairman and Chief Executive Officer
Thanks, Carlo. Appreciate it.
Operator, Operator
Thank you. And the next question is coming from Robin Farley from UBS. Robin, your line is live.
Robin Farley, Analyst
Great, thank you. Grant, following on your comments about the strength of the recovery being that by the premium mass side, I'm curious if you're seeing any impact at all from visa policy that is sometimes turning down kind of frequent visitors or multiple visits in a period. Sounds like it's not impacting the recovery in your view. But I'm just curious if you're seeing any impacts from that.
Rob Goldstein, Chairman and Chief Executive Officer
Grant?
Grant Chum, EVP of Asia Operations and COO of Sands China
Rob, shall I take that?
Rob Goldstein, Chairman and Chief Executive Officer
Please, yes.
Grant Chum, EVP of Asia Operations and COO of Sands China
Yes, if we look at visitation overall, we are experiencing a much quicker recovery from Guangdong compared to non-Guangdong provinces. This is mainly due to the proximity and the ease for visitors from nearby areas to reach Macao. From my perspective, the primary obstacle to a faster recovery in non-Guangdong visitation has been the lack of available hotel room inventory in the first quarter. We have a significant number of hotel rooms offline, approximately 36%. The overall availability of rooms in the city has also been noticeably limited. People seem eager to visit Macao, but the hotel room inventory issue has been a major barrier. Fortunately, this situation is improving substantially as we move into the second quarter. Transportation, however, is still only a small fraction of what it used to be, particularly for routes like Hong Kong to Macao, where our ferry service is operating at just 20% of its capacity from 2019 during the first quarter. Despite this, visitation from Hong Kong has been quite strong. Overall, the recovery in visitation is going quite well, but we should acknowledge a couple of challenges such as hotel room inventory and transportation that are significantly improving.
Robin Farley, Analyst
Thank you, that's helpful. For my follow-up, I understand it will take a couple of quarters for all hotel rooms to be operational. When considering the current operating expense run rate, how does it compare to 2019? Is there any permanent reduction in operating expenses, or will the labor issue mean higher costs once you are fully operational? Thank you.
Rob Goldstein, Chairman and Chief Executive Officer
Take it, Grant.
Grant Chum, EVP of Asia Operations and COO of Sands China
We are adding staff to manage our hospitality inventory, which will increase our payroll costs. However, we anticipate a significant rebound in revenue. This is a standard part of increasing capacity. Over the years, we have implemented multiple rounds of cost savings. Following the 2014 downturn, we achieved sustainable savings, and we also made additional structural cost savings during the pandemic, which we aim to retain. Regarding labor expenses, we recognize the need to invest in manpower to restore our assets to full operational capacity, and costs will increase accordingly. Our goal is to operate 12,000 rooms, not just 7,700, and we are working to achieve this as quickly as possible.
Robin Farley, Analyst
Great, thanks very much.
Operator, Operator
Thank you. The next question is coming from Shaun Kelley from Bank of America. Shaun, your line is live.
Shaun Kelley, Analyst
Hi, thanks. To start, could we revisit some of your comments, Rob, about the base mass compared to the premium mass mix and the unexpected insights there? Is it reasonable to view the current market mix, with a low double-digit increase in spending per visit, in the context of the 62% base mass against 48% overall visitation growth? Does this reflect market conditions, or should we consider some underlying factors or changes throughout the quarter? I’m trying to understand how much of this is pent-up demand and how much is simply bringing more people back to the property.
Rob Goldstein, Chairman and Chief Executive Officer
We need to be cautious as we are just getting started. If we think of it like golf, we're still on the driving range and haven't even reached the first tee. A mere 100 days ago, we were joking about the market and hoping for a profitable quarter in 2022. Now, we've presented a target of $400 million. My point is that things are changing rapidly, and it can be challenging to identify clear trends. As Grant pointed out, the base mass data has been somewhat confusing, and his insights have improved significantly compared to the base mass tables. It’s tough to predict where the trends will lead. If you look at the slides, particularly 16 or 14, you'll notice that visitation outside of Guangdong is quite low, indicating there’s ample opportunity for growth. Ultimately, I believe we'll substantially increase our profits with strong margins, leaving the past behind. We can't draw definitive conclusions from just the last half of January and the subsequent two months; it’s simply too early for that. Grant, please feel free to add your thoughts.
Grant Chum, EVP of Asia Operations and COO of Sands China
No, not a lot more to that, Rob. Yeah, I think you covered it well.
Rob Goldstein, Chairman and Chief Executive Officer
Shaun, what else do you got? Great. The other question would be a follow-up and perhaps a bit indulgent, but I'll try. I'm just trying to understand the market share as we exited the quarter, whether in March or based on some level of run rate. Some of the feedback suggested that it was accelerating and that you performed very well. It likely depended a bit on the timing of the base mass recovery, but for the quarter, we estimated your share to be around 27%. I'm curious if that level remained consistent throughout the quarter. Was your exit rate significantly higher than that? I'm just trying to extract a little too much from the current recovery, but we want to try anyway. All right. Patrick is going to take a look at that.
Patrick Dumont, President and Chief Operating Officer
Yeah, it's an interesting question. I think when we look at Macao, it's a story of investment. So, if you think about the growth in Macao and the asset base that we have and why we're able to get the visitation and the productivity out of the assets, it's because of our scale of investment in non-gaming. It's the rooms, it's the retail, it's the entertainment, it's the food and beverage, it's all the things that drive tourism value. And so, we invested $2.2 billion across the pandemic. So, from our standpoint, it's a new day. And we have probably one of the most important assets we have created in The Londoner, which was Sands Cotai Central. There's a lot of productivity that's available there. We have 650 new suites that we didn't have pre-pandemic. There's a lot of volume that we're going to be getting that we never had access to, now that the pandemic recovery is underway. And I think the other thing that's important to note is we've done this two other times. So, we were in the Las Vegas market during the recovery. And we saw the schedule and let's call it the slope of recovery related to pent-up demand in the marketplace and recovery of tourism. We went through that. We saw it in Singapore and the different stages of tourism access that occurred in a very controlled market in that recovery. And now we're seeing unfettered access to what is probably the best cluster tourism assets in all of Macao globally. And they've been continued to be invested in. There's a lot of depth to the market. And it is the beginning innings. It's early. So to call a market share now is a little tough, because it's not really comparable to pre-pandemic, because of the amount of investment and some of the dynamics changes that have happened to the market in the last three years. So, from our standpoint, I think we put up a good quarter. I think we're positioned well. As Grant mentioned, we're very excited about the additional inventory coming online as we get manpower into the buildings. And I think we're in a good place to continue to grow. So, we're not really looking at market share right now as much as we're looking at investment, visitation, access, customer service and then margin and outcome. And you saw the results of that in the quarter that we just had. So, March was really good. We're really excited about it. We're in a great trend. And we're going to keep pushing.
Shaun Kelley, Analyst
Congratulations. Thanks very much.
Rob Goldstein, Chairman and Chief Executive Officer
Thank you.
Operator, Operator
Thank you. The next question is coming from David Katz from Jefferies. David, your line is live.
David Katz, Analyst
Hi, good afternoon. Thanks for taking my questions. I wanted to just go back to the direct VIP business in both markets. And I know you made some commentary about sort of where Singapore is coming from and where some of the extra business is coming from. But can you help us understand the direct VIP opportunity in Macao? And are there any insights that we can learn about where that could evolve to over time relative to what we saw in the past, understanding it's a completely different business today?
Rob Goldstein, Chairman and Chief Executive Officer
I believe we're all in agreement that there is still uncertainty surrounding the future. The first quarter suggests there is indeed a VIP market, as reflected in our rolling volumes. We are curious about its potential for growth. One aspect that surprised me is the increase in foreign visitors from countries outside of China coming to Macao. This trend makes sense due to the quality, diversity of offerings, and overall experience available there, which is becoming easier to access for international travelers. I anticipate this growth will continue. Additionally, the clientele has shifted as less structural junk is present, leading to a more discerning customer base that requires careful credit consideration for business operations. However, I don't foresee a slowdown in this trend. Macao boasts an impressive range of attractions, high-quality food, and retail options, making it an exceptional destination for visitors from around the world. I believe this trend will intensify. While Singapore will still draw visitors for its unique offerings, I see a brighter future for Macao in the rolling business than I had expected. This growth is driven by factors such as accessibility and product quality, as we've already seen in the first quarter. Our retail sales reflect this, showcasing a robust offering for the upscale clientele that visits. It’s still early days with some uncertainties concerning non-junket liquidity issues, and we shouldn't assume we know exactly how things will unfold. Nonetheless, the trend appears positive. Grant, would you like to add anything?
Grant Chum, EVP of Asia Operations and COO of Sands China
Sure. I think Rob is absolutely right. The appeal of Macao to foreign VIP gamers is significant, and while we are enhancing our assets following the concession tender to increase international visitors to Macao, focusing on VIP gaming was a logical first step, especially considering that commercial air travel is still only a fraction of pre-2019 levels. The direct VIP performance you mentioned was quite strong during the quarter and continues to grow, and while we can't predict how much it will grow, there's every reason to expect it to continue, given the quality of our offerings. We not only attract premium customers with our outstanding products but also benefit from a cluster of world-class resorts, four of which we already have in our portfolio. Along with our industry peers, this creates an exceptional premium gaming destination that should appeal to Asian players over time. Moreover, we have extensive experience with international direct VIP services in the Asia region, including Las Vegas, Macao, and Singapore, which is not a new venture for us. Our capacity to promote Macao internationally has grown significantly, particularly with the addition of top-quality suites and salons. We will leverage our extensive international sales network—the largest in the industry across Asia—to promote Macao as a destination for Asian gamers. Therefore, I believe the outlook for foreign visitation and the foreign VIP market in Macao is very promising.
David Katz, Analyst
Thank you for that. I would like to follow up quickly. Can you provide any insights about which countries are contributing to this growth and what the sustainability outlook looks like? It seems you believe growth will continue, but I'm curious about the non-Chinese markets and whether extending credit in those regions might incur additional costs. Any information on that would be appreciated.
Rob Goldstein, Chairman and Chief Executive Officer
We won't be, David, country-specific, we won't do that. But I would just say to you, the demand is in a number of countries. And I think Grant's last point was very interesting. I was shuffling, because he's actually right. We've been doing this for decades. In Asia, we have a very strong sales force. A lot of same people have been with us for 20 years and represent in Las Vegas and of course Singapore, Macao. So, we are the beneficiaries of that sales system. But I think the high-end is probably built now in Singapore and Macao is going to drive that customer. Is this sustainable? Does it grow? I don't want to predict the future. I just don't know. But if it does, I think we will be the biggest beneficiary of it, because again, we have the biggest network and we have all these different places that we can take people within Macao, and of course to Singapore. So, it's hard to predict because again, it's early innings here. But I think if there's a strong rolling business in Macao, I think we'll get a big chunk of that. And time will tell how big it is, liquidity issues. But the MICE and the junket business clearly has a new day there. But if we can roll $20 billion, $30 billion, it would feel like a good place to be, if that's possible.
David Katz, Analyst
Thank you very much. Londoner looks great.
Rob Goldstein, Chairman and Chief Executive Officer
Oh, thank you. You saw it? We love people seeing it, because it's only halfway there, but what we've built so far is, we're just very proud of it. Thank you.
Operator, Operator
Thank you. The next question is coming from Brandt Montour from Barclays. Brandt, your line is live.
Brandt Montour, Analyst
Hey, everybody. Thanks for taking my questions.
Rob Goldstein, Chairman and Chief Executive Officer
Hey, Brandt.
Brandt Montour, Analyst
Given the transportation and hotel room inventory challenges outlined by Grant, it seems that premium mass visitation could surpass base mass visitation moving forward. I hope I'm not misrepresenting anyone. Can you share your observations regarding premium mass revenue per visitor and how it compares to other markets that have reopened after COVID, in relation to 2019? I'm trying to gauge the trend of pent-up demand on a per person basis.
Rob Goldstein, Chairman and Chief Executive Officer
I'll make a few comments before passing it on to Grant. The key takeaway is that we've observed an impressive recovery in several other markets. It's very strong. Those who are able to visit are spending significantly across all categories, including retail, food and beverage, gaming, and hospitality. It's exciting to witness this level of recovery so quickly after reopening, which is an encouraging sign. I think we're all genuinely enthusiastic about it, even though it’s challenging to predict future trends. Now, I’ll let Grant share any additional insights he may have.
Grant Chum, EVP of Asia Operations and COO of Sands China
I would say that our comments regarding hotel room inventory and transportation reflect what occurred in the first quarter. These factors have been improving significantly as we moved into March and the second quarter. We expect that the base mass will grow, especially since we are the largest beneficiary of this segment. Additionally, spending per visitor in the overall market has clearly increased, and the quality of our customers is very high across all segments. A simple walk through our various properties shows the increased spending power, particularly in retail, where we have seen an 18% increase in overall sales compared to 2019, with luxury sales growing even more. This is notable considering we have only had about 40% of the visitations we recorded in 2019. Those trends were consistent not only in gaming but also in non-gaming and retail during the first quarter. We hope to see an increase in base mass visitation and hotel room occupancy for the entire market.
Brandt Montour, Analyst
Great, thanks for that. And switching gears maybe to New York. Just curious if you're willing to give any updated thoughts on the RFP process there? If you think the timeline has shifted since we've talked about it three months ago? Any other comments on the factors for winning that third license? Thank you.
Rob Goldstein, Chairman and Chief Executive Officer
Yeah. New York, work in progress, waiting response from the government. Obviously, it has pushed back. We're here and we don't know for a fact, let's begin there. But we've been told, it could be early first quarter of 2024. But again we have no definitive date at this time. We do believe we have a very compelling bid. The project is in sync with our historical approach to development. It's a large-scale resort with enormous non-gaming amenities, hotel, convention space, entertainment, spa, etc., very beautiful design, very much LVS spirit, the way hotels should be designed as a real resort, a real destination. We have close to 80 acres. So, I think we have a very special bid, a very compelling bid, and I hope the market sees it that way. Timing will reign with New York State's government, and again we hope it's the first part of '24. No more to say about that at this time. Thanks, Grant.
Brandt Montour, Analyst
Great, thanks, again.
Operator, Operator
Thank you. The next question is coming from Steve Wieczynski from Stifel. Steve, your line is live.
Steven Wieczynski, Analyst
Good afternoon, everyone. Rob or whoever would like to respond, I've noticed that the visitation to Macao has changed recently, particularly in the last month. It appears there might be a shift in the types of visitors coming to the market, with reports suggesting an increase in tour groups compared to pre-pandemic levels. I'm curious about your thoughts on the spending behavior and financial capacity of the typical customer now compared to before. If my question wasn't clear, please let me know.
Rob Goldstein, Chairman and Chief Executive Officer
I think you asked it perfectly. It's a good question. Grant, do you want tackle that first?
Grant Chum, EVP of Asia Operations and COO of Sands China
I believe we're aiming for recovery across all segments of the market, as the tourism sector is diverse. The tour groups are the last segment to recover, which has only started happening in the latter half of the first quarter. The initial visitors returning tend to be from the premium sector, and gradually, we expect all other segments to recover in due time. I don't see any fundamental differences in how these segments perform compared to 2019. Generally, those returning have shown a greater willingness to spend. However, as the other segments come back, I don't expect any significant changes in the mix or profile within those segments. One key point to note is that spending power across all segments is currently higher than before, and the willingness to spend is also increased, which will be interesting to observe as time passes.
Rob Goldstein, Chairman and Chief Executive Officer
Steve, I think we all agree that what Grant just said, we have total confidence that this market will look a lot like it did before. The only difference structurally is the junket situation. But maybe the more affluent have gotten better access earlier, but I'm a staunch believer that that market will come roaring back in the base mass. You walk around the Peninsula, you see already the base mass is booming down there, although it's just lower-quality spend than premium base mass. But I think the base mass market will come back, the question is how quickly it does come back. But this market will look fundamentally the same in 2023 and '24 as it did in '18 and '19, I'm pretty confident of that.
Steven Wieczynski, Analyst
Okay, thanks for that, guys. I appreciate that. And then, Rob, I think the slide - what number is it, number 23, it's pretty interesting in terms of how you laid out your Macao capital commitments for the next 10 years or so. I don't know if you answered this, but if you think about that potential all-in, the $4.5 billion that you might have to spend over the next 10 years, is there any way you could help us think about what you guys are kind of targeting for a potential return on that commitment?
Rob Goldstein, Chairman and Chief Executive Officer
Patrick?
Patrick Dumont, President and Chief Operating Officer
Yeah, I think we've always said publicly that we look towards a 20% return on invested capital there. But I have to tell you, Macao is a fantastic market to invest in over the last 20 years. We're very excited to follow through with this commitment and we look forward to the opportunity to actually invest more. If you look at the growth of our company, it's because of the investments we've made in Macao in non-gaming. It's an extraordinary tourism market. The consumer responds very well, and we're very excited about the opportunity this new concession to invest more than what we have on this page. So, it's something that we're very focused on and we look forward to the opportunity to do it.
Rob Goldstein, Chairman and Chief Executive Officer
I think we're going to be raging bulls on Macao, investing in the future. And they’re fairly look-back to our past and further, you can see our future, which is going to be, we believe non-gaming assets are wildly profitable, but they also drive gaming assets. It's all in sync. So we build more hotels or we build more retail or anything, it drives the gaming win. We've got plenty of positions to fill and to grow those numbers. When you look at the slot numbers coming to Singapore and the win per unit and tables, you realize just how far Macao can get to. So, we never saw the investment in the concession being an ending point. We saw it as the beginning point. We firmly believe that Macao in the next 10 years will make a lot of money for us. We're very bullish on the market and we're thrilled to be there.
Steven Wieczynski, Analyst
Okay, great. Thanks, guys. I appreciate it.
Rob Goldstein, Chairman and Chief Executive Officer
Sure.
Patrick Dumont, President and Chief Operating Officer
Thanks, Steve.
Operator, Operator
Thank you. And the last question today is coming from Dan Politzer from Wells Fargo. Dan, your line is live.
Dan Politzer, Analyst
Hey, good afternoon, everyone, and congrats on the quarter.
Rob Goldstein, Chairman and Chief Executive Officer
Thank you, Dan.
Dan Politzer, Analyst
First, I wanted to touch on Macao. Can you talk a little bit about the recovery level across the properties there, and which have been most impacted by room and labor constraints versus mass versus premium mass mix? And then, similarly with Londoner and the suite investments that you've made, what's kind of been the kind of the early read out of the gate and your expectation on recouping that typical 20% return on those investments in terms of timing? Thanks.
Rob Goldstein, Chairman and Chief Executive Officer
Grant, are you still awake? Grant, please take that.
Grant Chum, EVP of Asia Operations and COO of Sands China
Certainly. The Londoner has been the most affected by hotel room availability, with occupancy rates around 46% to 47%. It has the largest number of hotel rooms in our portfolio, so the impact on this property has been significant. However, on a positive note, the newer offerings, particularly on the north side of the building and the new suites, have received an outstanding response from customers. This positive reaction stems not only from the high quality of the design and amenities but also from the exceptional service and hospitality we provide, scaled up effectively. Regarding the new products, including the new suites at the Londoner hotel and the Londoner Court, we see very encouraging early signs. While the overall property faces challenges due to limited hotel room availability this quarter, the initial results of the new offerings are very promising.
Dan Politzer, Analyst
Got it, thanks. Now, regarding Singapore, could you discuss the factors influencing the reopening of China? I understand that inbound travel from China has been recovering slowly, but what are your thoughts on the recovery throughout the year? Additionally, are you still seeing the Chinese customers who were in Singapore, or have they mostly returned to China?
Rob Goldstein, Chairman and Chief Executive Officer
Patrick?
Patrick Dumont, President and Chief Operating Officer
Thanks for the question. Since China reopened on January 8, we haven't seen a significant increase in Chinese visitors at the start of this quarter. However, there is a gradual rise in outbound tourism from China, which we expect to benefit from. This has been anticipated for quite some time. Currently, flight levels and airlift capacity are not at the typical rates we would usually expect, but we expect that to increase throughout the year. We believe visitation will bounce back, as China has historically been a strong market for Singapore, and we are currently achieving good results even without its contribution. We are very optimistic about the potential for outbound tourism from China to enhance the growth of Marina Bay Sands. Additionally, I want to address a recent question regarding our investment plans in Macao. We are very positive about the investments there, given the high returns they present. Our focus is on continuing to invest, particularly during our concession renewal and to expand our non-gaming assets. The same goes for Singapore, where we see unique opportunities within the high-value tourism market. The expansion of Marina Bay Sands is something we are excited about, but we also recognize that it has become more costly since we initiated plans in 2019. The pandemic has driven up both labor and material costs, along with global inflation. Despite these challenges, the strength of the current market is evident, and we are confident it will continue to strengthen, especially with investments in high-quality tourism assets like the Marina Bay Sands expansion. It's important to acknowledge that inflation has significantly impacted costs since our discussions began, meaning the expenses tied to the Marina Bay Sands expansion will be much higher than initially expected. However, the promising market conditions assure us that these investments will yield strong returns, justifying the higher costs. We'll continue to pursue our investment strategy in both Macao and Singapore vigorously, aiming for substantial returns. We are committed to capital deployment in both markets on a large scale and remain confident about the opportunities available. That said, we want to clarify that investing will be costly, but we believe the payoff will be worth it.
Rob Goldstein, Chairman and Chief Executive Officer
We are fortunate to be in two markets: one, our expense, the two, reward the money spend. I think we're very fortunate to be in a market that can grow and grow, and we will continue to invest heavily because we believe we'll get back to much bigger numbers in both markets. So stay tuned. We appreciate your time today. Thank you very much.
Operator, Operator
Thank you. Ladies and gentlemen, this does conclude today's conference call. You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.