Earnings Call Transcript - LVS Q3 2022

Daniel Briggs, Senior Vice President of Investor Relations

Thanks, Paul. Joining the call today are Rob Goldstein, our Chairman and CEO; Patrick Dumont, our President and COO; Dr. Wilfred Wong, President of Sands China; and Grant Chum, EVP of Asia Operations and CEO of Sands China. Today's conference call will contain forward-looking statements that we are making under the Safe Harbor provision of federal securities laws. The company's actual results could differ materially from the results reflected in those forward-looking statements. In addition, we will discuss non-GAAP measures. A definition and a reconciliation to the most comparable GAAP financial measures are included in the press release. We have also posted an earnings presentation on our Investor Relations website. We may refer to the presentation during the Q&A portion of the call. For the Q&A session, we ask that participants please pose one question and one follow-up, so we might allow everyone with interest the opportunity to participate. Please note that this presentation is being recorded. I'll now turn the call over to Rob.

Rob Goldstein, Chairman and CEO

Thank you, Dan, and thank you for joining our call today. A few brief comments and we'll move to Q&A. The recovery of Marina Bay Sands continued during the quarter with property EBITDA reaching US$343 million. The relaxation of virus-related restrictions in Singapore and many of the source markets, coupled with the improvements in airlift, have enabled this performance and financial improvement. We expect a robust recovery over time as further relaxation measures in the region are implemented and additional airlift in Singapore comes online. Our $1 billion capital investment program currently underway at Marina Bay Sands has introduced exceptional new suite product in premium segment-focused amenities of the resort. The response to these initial offerings has been strong. Additional offerings, including spacious new suite products, will be introduced throughout the remainder of this year and 2023. We look forward to substantially increasing our investment in the Singapore market as we execute our expansion plans at MBS in the years ahead. Turning to Macao, the operating environment remains difficult. Importantly though, tourism restrictions have been relaxed. Customer demand and spending in Macao have proven resilient at the premium mass level from both gaming and retail perspectives. We appreciate the opportunity to submit our tender proposal for one of the six gaming concessions in Macao in September. We are now in the consultation phase of the tender program, and as such, we won't be able to comment much further on the process at this time. We are big believers in Macao as a world center of tourism and leisure. We have been the biggest investor and operated non-gaming businesses over the past two decades in Macao. We absolutely welcome the opportunity to invest even more in the non-gaming products and offerings in Macao. We have great confidence in Macao's tourism recovery and its long-term growth prospects as we do our utmost to support Macao's economic diversification and its evolution as Asia's leading destination for MICE and leisure visitors. We consider our existing portfolio of resorts in Asia to be an ideal platform for growth in the years ahead. In addition, we continue to pursue opportunities to develop new large-scale land-based destination resorts in both the U.S. and Asia. We thank you for listening today, and I'll turn to your questions.

Operator, Operator

And the first question today is coming from Joe Greff from JPMorgan.

Joseph Greff, Analyst

Yes, Rob, Marina Bay Sands, you're run rating close to $1.4 billion in annualized EBITDA. And as you referenced in the investor slide presentation, without any contribution from a geography, namely China, given what you're seeing with improved easing regional visitation volume in, say, other non-China geographies, do you think you can get to 2019 EBITDA levels at some point in the next year or so without direct contribution from China?

Rob Goldstein, Chairman and CEO

We believe Singapore is in a unique position and we can easily reach 2019 levels. However, we are currently facing three significant challenges. First, tourism to China is very limited. Second, we are receiving about 55% of visitation to Singapore from the rest of Asia. While this may seem surprising given our high occupancy rates, it's important to note that the tourists coming in often don’t use the MBS property for lodging, gambling, shopping, or dining. This impacts our revenue from table games, as not all hotels in Singapore are operating at full capacity. MBS is typically the first choice for these visitors, which affects our business negatively. Despite this, we are generating $700 in win per unit on the slots and impressive retail figures, but there is significant potential for growth. The third challenge involves our sleeping rooms, with approximately 400 to 500 units currently offline. I believe we are just at the beginning of our journey in Singapore. I often say the party is just starting here. Singapore is poised for growth for a couple of reasons. The destination is becoming more appealing, and our facilities are improving. With a rebound in visitation from China and other parts of Asia, our growth potential is much greater than what we are currently experiencing. We could potentially reach $2 billion in revenue over the next couple of years if we get it right and the market recovers. While we are satisfied with our current numbers, we are optimistic about the better days ahead for Singapore. The market and destination have seen substantial growth in the Asian tourism sector, and we expect our figures will reflect this in the coming years.

Joseph Greff, Analyst

Great. And then switching over to Macao, I'm not going to waste my bullet of the question on concessionaire terms and other things I'd love to ask about. But maybe can you just remind us what your expectation or what your conversations during the consultation process, what the timetable is for the license renewals to be finalized? When would you expect to hear from the government and then the government's end result to be publicly communicated? And that's all for me.

Rob Goldstein, Chairman and CEO

We woke our colleagues up in Asia from a deep sleep to participate. I'll let them answer that question. Gentlemen, Grant and Wilfred, both online correct?

Daniel Briggs, Senior Vice President of Investor Relations

Correct.

Rob Goldstein, Chairman and CEO

Are you awake, guys?

Wilfred Wong, President of Sands China

Yes, we're up.

Grant Chum, EVP of Asia Operations and CEO of Sands China

Yes.

Rob Goldstein, Chairman and CEO

Answer away. Do you need the question?

Wilfred Wong, President of Sands China

Well, we've been working with the government closely. A couple of rounds of discussions have been held. We are waiting for the government notification on whether there will be another next round of discussion. The timetable remains the same. Everything is in good progress, and we expect some notification towards the end of the month for us to know what's the next step.

Rob Goldstein, Chairman and CEO

Grant, do you have anything to add, any additional commentary, Grant?

Grant Chum, EVP of Asia Operations and CEO of Sands China

No, I think that's right. And we obviously welcome the smooth progress in the process. And we still do expect the entire process to complete by the end of the year, as previously stated by the government.

Operator, Operator

The next question is coming from Carlo Santarelli from Deutsche Bank.

Carlo Santarelli, Analyst

Obviously, Rob or whoever wants to take this, you guys had a significant boost in kind of hotel revenue out of Singapore and namely in ADR. Any color you guys could provide? I mean, I know strategically, you're looking to put the best customers in that building right now from a gaming perspective. And obviously, that's showing up in the numbers, both on the VIP segment roll and mass segment roll. Anything you could provide as to kind of how the mix has changed at that property? I assume some of that ADR is just kind of casino comp room and that's kind of what's making that sound so significant?

Rob Goldstein, Chairman and CEO

I believe one of the most important points is what we don't have yet. We're operating at about 96%. On Page 14, you'll see the ADR is $515. We're really just at the beginning since we still haven't fully recovered, especially with China and much of Asia not back yet. Our perspective is that the mix will continue to improve as demand increases. The challenge we face is ensuring we have enough rooms to meet all the demand. We've highlighted two key factors: one being retail, which is consistently improving, and our strong performance on the slot side. The renewed focus on Singapore as an emerging destination market suggests significant potential for growth in non-rolling tables. I'm particularly waiting for recovery in that area, which will rely on China and the rest of Asia completely returning. Currently, we find ourselves in a challenging position because we desire more rooms in Singapore, as the $515 figure is a genuine number; it could rise significantly as demand increases. We're able to offer hotel reservations at premium rates from the FIT side, and demand from the rolling segment is much stronger than it was before the pandemic. The 343 figure is solid, especially considering market conditions. However, I believe the peak potential for Singapore lies in the next few years as we continue to develop, and you will notice our renewed focus on the retail segment. We are committed to refining our room mix, ensuring we have top-tier accommodations and high-quality food and beverage offerings, as Singapore's appeal as a destination continues to grow. We're excited to be part of that development. Looking back, we used to view one, six as a strong number, and hopefully, it will seem modest in the future.

Carlo Santarelli, Analyst

Great. That's helpful. And then if I could, as you guys have talked about in the past and the thoughts on development, clearly, the New York process is kind of underway. Could you perhaps maybe share a little bit of your thinking around your approach and perhaps how you're thinking about the broader process timeline in general for New York?

Rob Goldstein, Chairman and CEO

We are awaiting guidance from Governor Hochul on how the process will commence. As you know, we have had a strong focus on the market for several years. We currently have a bid and are also assembling a property. We are very optimistic about New York as a market. However, it has been challenging due to the limited availability of licenses, making it quite competitive. We hope our bid stands out. The timeline appears to be set for January for the RFP, and we anticipate that a decision may come sometime in 2023. We will certainly put forth our best effort, as this market is ideal given its population density and diversity.

Operator, Operator

The next question is coming from Robin Farley from UBS.

Robin Farley, Analyst

Can you provide an update on your expectations for a more open border and whether you still anticipate that November will bring package tour visas and electronic visas? Do you believe this will facilitate an increase in visitation?

Rob Goldstein, Chairman and CEO

I'm going to ask your former colleague, Mr. Chum, to answer that question, Robin.

Grant Chum, EVP of Asia Operations and CEO of Sands China

Sorry, Robin, I couldn't quite hear the question. Can you repeat that?

Robin Farley, Analyst

It was just about your expectations around timing for the border to be a little more open in Macao and specifically anything on the changes that were planned by early November for visa applications to be electronic and packaged tour visa to restart?

Grant Chum, EVP of Asia Operations and CEO of Sands China

Yes, sure. I mean, I think, Robin, there has been a positive announcement on the relaxation with regards to two groups as well as the electronic visa application in four provinces and also in Shanghai expected to commence at the end of the month or early November. And so that's obviously going to be a very positive signal for a gradual recovery in the visitation, especially from these key provinces and municipality. And obviously, we welcome the development. Clearly, in the past few weeks and also months, it’s still being relatively impacted by the COVID cases in different provinces as far as the non-Guangdong visitation is concerned. So what we're seeing right now in Macao is predominantly coming from the Guangdong province. But hopefully, as we get further into the fourth quarter with these recent measures, we're going to start to see a more well-rounded mix of visitation building up towards the end of the year.

Robin Farley, Analyst

Okay. And then also for my other question on Singapore. I know you’ve said that the deadline to start construction was extended to April 2023, and you had said that before this quarter. Just wondering if you have anything more definitive about when that would happen?

Patrick Dumont, President and COO

I think the great news is that our performance in Singapore is very strong. It’s a significant market, and tourism there is impressive despite some constraints. The spending power of the consumer in that area is substantial. We are focused on high-value tourism, and you can see the results in our performance. We believe Tower 2 has great potential, and we are very excited about it. Unfortunately, we don't have any updates on the timing at this moment. We are actively working on it, and as we make progress, we will be able to provide more information about our direction. For now, we remain optimistic and enthusiastic about the project, as we believe it will cater to a powerful segment of the market. We still do not have an update on timing.

Robin Farley, Analyst

Can I just ask one clarifying question on that? It had sounded previously like the timing of the budget and all of that was because of the pandemic and the disruption from that. If your business level has sort of fairly recovered, is that still the kind of uncertainty in commencing construction? Or are there other factors that are more of a gating issue at this point?

Patrick Dumont, President and COO

It's really just process. I think there's a certain number of steps that we have to go through to be able to build. And so those processes were delayed because of the pandemic and because of some of the government agencies that we have to deal with being focused on very pressing matters. So now that they're able to reengage, we'll start that process again and begin on the path. And as we follow sort of the steps necessary, we'll be able to provide an update. But it's really just timing related to things necessary to begin. There are a lot of things that have to happen to make a building of this scale and complexity in the location that it's in get all the approvals and go through the steps necessary to begin.

Rob Goldstein, Chairman and CEO

The process for us is a learning and evolutionary one. Our perspective on this market continues to change as we gain more insights and experiences. Our understanding of the gaming capacity and customer base has shifted significantly. Singapore has transformed over the past five years, and this evolution has influenced our decisions regarding what to build and its specifications. While progress is slower than we would like, it marks the conclusion of a very important product.

Operator, Operator

The next question is coming from Dan Politzer from Wells Fargo.

Daniel Politzer, Analyst

You are experiencing significant strength in your room product at the moment. You are undertaking a $1 billion renovation project for your room product at MBS. How should we assess the return on that investment, considering it will be fully operational next year? Do you believe you can achieve the typical 20% return historically, or possibly even more, without the Chinese consumer returning?

Rob Goldstein, Chairman and CEO

We need the Chinese consumer to return to meet our goals. It is essential for China to bounce back, and we also need the rest of Asia to open up. The current percentage compared to 2019 is not favorable. We require Singapore to be fully operational since our venue thrives when there are large crowds. The other hotels are also crucial for us. Our innovation should wrap up in late 2023, and we expect Singapore's tourism situation to improve by the second quarter. However, we are uncertain about the return of China. Once these conditions are met, we believe we can achieve significant returns. Our target is to reach $2 billion in Singapore, which we think is attainable if the market fully recovers. We approached Singapore with a different mindset over ten years ago. Macao has evolved into a leading gaming market, and while we are starting to see a recovery, it is still not sufficient for us to reach $500 million per quarter. However, we are optimistic about the future. Singapore and Macao are prime investment opportunities, with Singapore showing great potential. We have invested heavily in Macao, and that will benefit us in the future. Right now, Singapore is incredibly promising, and we are confident about the returns ahead.

Daniel Politzer, Analyst

Got it. And then just pivoting to Macao. Another one on the group tours and the e-visas being resumed. I mean can you maybe frame how big these components work for your business in 2019? And then secondarily, if we think about these parts of the business returning and coming back online, is there a path to Macao getting to positive EBITDA in the fourth quarter, assuming no major outbreaks?

Rob Goldstein, Chairman and CEO

I'll ask Grant to reference that. But I think we should be careful. It's very hard, as you know, right now, predictions of Macao had been erroneous the last couple of years because we don't know who's going to come and we don't know when they'll close the market. It's been stop-and-start for so long. It's kind of silly for us to pontificate on exact gains in EBITDA. Could we be EBITDA positive? Sure, it could be positive tomorrow if things open up and visitation returns. And that's going to happen at some point. But I think it's difficult for us to tell you that the fourth quarter could be EBITDA positive without knowing what effects the visitor team will have in November and then also not knowing how zero COVID enforcement will happen. So there are certainly unknowns in Macao, and it's very difficult to guess. Grant, Wilfred, any commentary?

Grant Chum, EVP of Asia Operations and CEO of Sands China

Yes, Rob, I think Rob is right. I mean, the prediction of the future is tough. I think what we can say about the past is the group package tours represented roughly 1/4 of the visitation before the pandemic. With respect to electronic visas, we don't have those numbers. Obviously, it varies significantly from province to province. But clearly, the provision or availability of that mode of application is absolutely helpful to facilitate the visa application for those relevant provinces.

Operator, Operator

And the next question will be from Shaun Kelley from Bank of America.

Shaun Kelley, Analyst

Maybe just to stay on Singapore, my first question is just to ask a little bit about trying to triangulate a little bit more on sort of what you're seeing behaviorally. When we look at RevPAR, for instance, I think it's about 6% versus 2019. Is that a decent gauge of, let's call it, the consumer and the, let's call it, the spend per person or per head? Is it better than that? I'm just trying to think about pent-up demand or what you're seeing on kind of a core visit-to-visit basis versus what we've seen in some of the Western markets because we don't have a great proxy in Asia yet about sort of how pent-up demand is going to play out and just trying to kind of see what you're seeing a little bit more.

Rob Goldstein, Chairman and CEO

I'm going to have Patrick address that, but I want to emphasize that Singapore is quite different. This is the obvious response. Singapore stands apart from Las Vegas or U.S. regions primarily because it requires a flight to reach it, so we need to consider the reopening of other countries. It's similar to purchasing wine in Burgundy, as there are many different regions within that area. Likewise, in Asia, there are numerous regions that have yet to open, and airlift is a significant challenge. Therefore, we are truly constrained. Although the performance for the quarter is commendable, it's important to note that we may not be capturing the full potential. It's challenging to compare it to other locations. The reality is that Singapore is still significantly restricted by limited access from China and the regional market, which relies on airlift. In contrast, once Macao reopens, it will operate like Las Vegas or other regional markets where airlift is not an issue. Currently, Singapore finds itself in an uncertain environment. It has achieved around 1.4 billion annualized, but we won't truly understand the full potential of this market. We can observe strong retail, robust local slot play, and high rolling volumes because many visitors are coming to Singapore, especially during the F1 event. However, what remains unseen is the full potential of this destination and the developments taking place. Patrick?

Patrick Dumont, President and COO

It's a very interesting question. I think the key thing to note is that it's a data point for the quality of tourism coming into Singapore. And the high amount of consumption that's there when tourists visit. There are constraints, and there were constraints during the quarter. So as Rob mentioned at the beginning, you see from the deck, we had approximately 500 rooms out of inventory during the renovation. The rooms that are coming online are probably the best products we've ever had. We're very proud of that. We think we'll be able to trade up in terms of the quality of the tourism that we get out of those rooms once the completion is there. One thing to note is that we'll be done at the end of '23. So we're going to have a few more quarters of disruption as we take rooms out of inventory to complete the renovation process and rebate Sands. The other thing to note is that the airlift is not there. And some of the other hotels around the Singapore market do not have full capacity because of labor constraints. So once these things are removed from the market that act as limiters, then you can get an idea of what the true potential would be in a run rate environment. But I would still call this a little bit of a recovery quarter. So we think there's more potential to run as we fix some of these things that are sort of limiting the way that we can earn and to be fair, the market can earn.

Rob Goldstein, Chairman and CEO

If you look at our sales in the retail mall on Page 31, it gives you some indication that we're running at $2,300, $2,400 a foot at Marina Bay Sands from the third quarter. I also think if you look at the rolling volumes as they start to kick in, I think those are great data points as you get quality coming. But again, it's early days. I think the recovery quarter is the right way of approaching it.

Shaun Kelley, Analyst

Super helpful. I want to transition over to Macao. I’m not sure it’s the exact right way to look at it, but I find the breakdown of mass win per visit on Slide 12 to be very valuable. Considering the pullback from what was likely a very premium mass-driven business over the last eight quarters, the last two quarters resemble the situation back in 2018 and 2019. Which of these two scenarios, the pent-up demand from the last eight quarters or the more recent numbers, better represents what we might expect for normal activity in Macao?

Rob Goldstein, Chairman and CEO

Grant, do you want to take that?

Grant Chum, EVP of Asia Operations and CEO of Sands China

Yes, I'll take that, Rob. Yes. Thanks for the question. I think it's interesting looking at that trend as you highlight for the past several quarters. I would say the difference that you highlighted with the previous two quarters versus the prior eight is really just a function of the regional mix. So into 2022, we've had a much more Guangdong-bias mix, if you look at the visitation data, and that's mainly a result of the various COVID outbreak impacts on the non-Guangdong source of visitation. So if you're looking at the period post-pandemic, that's clearly the differentiator. And then if you compare with pre-pandemic, then it's, of course, still very much premium mass coming back faster. And I think that broadly stands, notwithstanding or adjusted for the regional provincial mix. I think that's still a valid point, and it's borne out by the data series. So obviously, premium mass comes back first, and then the mass comes back later. But this year, definitely, there's an impact from the regional mix as well.

Shaun Kelley, Analyst

Very helpful. Thank you.

Rob Goldstein, Chairman and CEO

I believe we can all agree that there will be strong demand in Macao once COVID is behind us. The same can be said for the U.S. market, where our presence and scale indicate that the base mass and premium mass will drive growth. The only uncertainty lies in the missing junket segment and its potential impact. However, we are confident that once activities resume, the pent-up demand will be remarkable.

Operator, Operator

And the next question is coming from Brandt Montour from Barclays.

Brandt Montour, Analyst

On Singapore, can you guys give us the room rate differential between the finished room product and the legacy room product at run rate?

Patrick Dumont, President and COO

I think the problem is there's so much noise in the comparison because what we would be giving you is 2019, and this is not a fully open market yet. What we'd like to believe is after the quality of the renovation to be fair, we were taking keys out of inventory to create larger suite product. The level of design we have, a new service model, we've changed out a lot of the team there in order to improve our service delivery. There are a lot of things that are going to be different. So I don't want to quote you a number until we get to the run rate. But the key takeaway is that we're very focused on high-value tourism. We're investing in room product, we're investing in personnel and training, and in service delivery and in food and beverage and other amenities in the property to ensure that we can capture that high-value tourist. And that's really what you'll see over time.

Rob Goldstein, Chairman and CEO

I think it's important to truly grasp what we are creating, so I encourage you to book a flight and see it for yourself. The product we are developing is unique in Singapore and showcases our strengths compared to the competition. Our feedback has been overwhelmingly positive regarding this product. I believe the impact will surpass our expectations because we are creating something exceptional that resonates with people. I invite anyone in the area to spend a day at Marina Bay Sands; we have some impressive developments to show you.

Brandt Montour, Analyst

That's helpful. Regarding Singapore, early on in the reopening, there was a narrative that it was capturing groups and convention business from Hong Kong. When you discuss with your meeting planners and bookers about the next six, 12, or 18 months, do they feel that as Hong Kong starts to reopen, it will attempt to recover some of that business? Or is that market still too uncertain? Is Singapore maintaining its momentum in that area?

Patrick Dumont, President and COO

So Singapore is open for business. And so that means a return of leisure tourism, which we're benefiting from directly, and the return of business tourism, which we're seeing in a strong way. I don't think we can draw a comparison with Hong Kong because access is different. So I think the way to look at it now is Singapore has always been a very strong MICE market. And I think it will continue to be so because of the investment, the high-quality tourism assets it's important as a financial center. We intend to invest behind this thesis. And so we think it's generally a very strong place for business tourism. In terms of Hong Kong, I don't think we're at run rate yet to really understand sort of what that means. There are still COVID restrictions, and there are still other restrictions in operation. So until those return to a more normal time, I think it's going to be hard to have any view at all.

Operator, Operator

And the next question is coming from Stephen Grambling from Morgan Stanley.

Stephen Grambling, Analyst

You mentioned the trade-up and quality of the new rooms in Singapore. Can you just remind us of the cadence of rooms coming out and coming in over the next couple of quarters? And also talk to the net impact from these actions split across any uplift from renovated rooms versus the older rooms and maybe even tying in headwinds from those closed?

Patrick Dumont, President and COO

We expect to have between 300 to 500 rooms out of circulation over the next five quarters. The room renovation will be completed, and both towers will be ready by Chinese New Year 2024, and actually by the end of 2023. This means we will not be operating at our full room delivery potential during the next five quarters.

Stephen Grambling, Analyst

Are you currently delineating between the new rooms in terms of pricing in the old rooms?

Patrick Dumont, President and COO

There is some variability there, yes, but it also depends on which room within the segment. So we have certain suites that are out, certain rooms that are in, it depends on the time. Yes, there is some differentiation. So there is a blend there.

Stephen Grambling, Analyst

Got it. And then maybe turning to Macao. The market share there in mass has been quite volatile. How would you frame how your market share may evolve in a market recovery as different segments return, as you've described in a bit of a cadence; premium mass and then mass?

Rob Goldstein, Chairman and CEO

Grant, do you want to have that?

Grant Chum, EVP of Asia Operations and CEO of Sands China

Sure. Yes, thanks for the question. Yes, I think it is volatile right now because the volumes are so thin. So I'm not sure looking at this quarter or even the prior quarters is particularly meaningful at this point. But I think going forward, I think as Rob referenced, we expect a strong comeback of both premium mass and mass. And I think in those segments, we're going to perform very well. Obviously, there's a past history there. But also, I think looking forward, we are coming off these fantastic product investments that we've made during the pandemic with the $2.2 billion investment program that we've implemented and now coming out on the other side pretty much completing with the London arena being the last component. So with the Londoner and the Grand Suites at Four Seasons, we feel very strongly that we're going to perform very well on the market share front. Across all of these segments, not just because of the suites, speaking to the premium mass segment, but also for the mass segment, I think we'll end up with these three wonderful iconic destinations to follow on from The Venetian and The Parisian and now with the Londoner Macao, which is already starting to gain so much traction with the people who have been able to visit and also locally as well.

Operator, Operator

And the last question is coming in from David Katz from Jefferies.

David Katz, Analyst

If you could just talk a little bit about what you may have learned in the past quarter or so about the mix of revenue in recovery in Macao, what should we expect? And what role does sort of VIP play in all of this? And I know obviously, premium mass is the focus. But help us break down the different streams, if you can.

Rob Goldstein, Chairman and CEO

Mr. Chum, are you still awake?

Grant Chum, EVP of Asia Operations and CEO of Sands China

Yes, I'm still here. As I mentioned earlier, there is a combination of factors involving the business segment and the regional breakdown. If we focus solely on the business segment, it's evident that VIP currently has very low volume levels, particularly in comparison to premium mass and even mass. In 2022, part of this impact is tied to the regional composition of our business, as we've been heavily reliant on Guangdong for most of this year. Looking ahead, we anticipate that premium mass will recover first and more robustly, followed by mass. This pattern is also reflected in retail performance. In 2021, the luxury retail segment demonstrated significant success, but that was less the case in 2022, again due to regional variations. Moving forward, we expect similar trends, with luxury retail rebounding first and at a quicker pace, followed by mass retail.

Operator, Operator

Looks like we lost David. We did have another question come in from Ben Chaiken from Credit Suisse.

Benjamin Chaiken, Analyst

Just kind of want to level set as we close the year. I think we mentioned tour groups and e-visas for a few provinces in Shanghai, either at the end of this month or early November. Is it possible that Macao could have breakeven or positive EBITDA as we go into the end of the fourth quarter? Or do you think that's out of the realm of expectations?

Patrick Dumont, President and COO

Yes. I think the difficulty is, we don't know. We've been in these conditions for 2.5 years. We're very hopeful. We're going to continue to invest in Macao. We feel very strongly about Macao's future and the opportunities that exist there for leisure and business tourism, but we just don't know. So as of right now, we're just waiting patiently, and we're going through the process, and we're looking forward to the opportunity for the upcoming concession.

Operator, Operator

Thank you. And ladies and gentlemen, this does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. We thank you for your participation.