Las Vegas Sands Corp

NYSE:LVS

Earnings Call Transcript 2017-Q4

[Operator]

Good afternoon. My name is Jesse and I will be your conference operator today. At this time, I'd like to welcome everyone to the Las Vegas Sands Fourth Quarter 2017 Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

I would now turn the call over to Mr. Daniel Briggs.

[Daniel Briggs, IR]

Thank you. Joining me on the call today are Sheldon Adelson, Chairman and Chief Executive Officer; Rob Goldstein, our President and Chief Operating Officer; and Patrick Dumont, Executive Vice President and Chief Financial Officer.

Before I turn the call over to Mr. Adelson, please let me remind you that 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 anticipated results in those forward-looking statements. In addition, we may discuss non-GAAP measures. A definition and a reconciliation of each of these measures to the most comparable GAAP financial measures is included in the press release. We also want to point out that we have posted supplementary earnings slides on our Investor Relations website. We may refer to those slides during the Q&A portion of the call.

Finally, for those who would like to participate in the Q&A session, we ask that you limit yourself to one question and one follow-up question so we might allow everyone with interest to participate. Please note, that this presentation is being recorded.

With that, let me please turn the call over to our Chairman, Sheldon Adelson.

[Sheldon Adelson, Chairman & CEO]

Thank you, Dan. Good afternoon everyone and thank you for joining us today. Our company delivered another great quarter and I'm very pleased that we ended 2017 with such strong financial results. Company-wide adjusted EBITDA reached $1.34 billion, an increase of 20% over the prior year driven by outstanding growth in Macao and Singapore. This has given me a hint that I should change my middle initial meaning Gary to growth as I've done before; so it's now Sheldon Growth Adelson.

Our Macao operations produced its best quarter since quarter three 2014 with adjusted EBITDA reaching $731 million. Hold-normalized EBITDA came in at $758 million representing growth of 30% over the prior year. Macao's mass market growth accelerated during the quarter from 9% in quarter three to an estimated 18% in quarter four. We again outperformed the market in mass gaming growth as we have throughout 2017. Our non-rolling table grew by 18% over the prior year while our non-rolling win grew by 27%; this outperformed it's mass revenue growth rate throughout significant margin expansion. Our whole normalized EBITDA margin reached 35.1% through the quarter, an increase of 320 basis points compared with the prior year.

The structural advantages that enabled us to drive mass non-gaming growth were fully evident during the quarter. The scale and range of our hotel suite inventory, the diversity of our non-gaming offering, especially in retail and entertainment and the unique benefit of inter-connectivity between our Cotai properties. These advantages allow us to attract more overnight visitors than any other operator, as well as increase their length of stay. As a result, we grew by an exceptional 52% in premiums mass when compared to the prior year. We achieved hotel occupancy of 94% in the fourth quarter despite having added approximately 3,000 rooms to our inventory just over a year ago with the opening in The Parisian. At over 1 million occupier room nights in the fourth quarter, this was an on-time quarterly record for our Macao hotels. Our MICE business has gone from strength to strength growing by 44% year-on-year to just under 290,000 room nights in 2017.

Our strategy to build integrated results with scale and diversity is clearly paying dividends as Macao's mass and tourism growth accelerates. The opening of the Venetian Macao 10 years ago marked the first step in my vision to create the Cotai Strip. The Venetian introduced large scale, non-gaming amenities to Macao such as retail malls, MICE, live entertainment and arenas. These attractions are now well established in Macao and will continue to flourish and grow. I cannot be more proud of the fact that today after receiving more than 290 million visitors, The Venetian Macao stands as the most visited integrated resort in Asia, if not the world.

We have also successfully established The Parisian Macao as a new landmark must see destination resort. The Parisian Macao achieved EBITDA of $412 million in its first 12-year of operation and welcomed over 15 million visitors to the property. The rapid development of digital and social media marketing in China has been instrumental in establishing The Parisian Macao with its iconic Eiffel Tower as a marquee attraction for Chinese travellers visiting Macao. The brand recognition we have generated for The Parisian Macao on these platforms has simply been incredible with over 5.2 billion impressions as of December 31. The addition of The Parisian to our Cotai Strip portfolio has taken our critical mass and diversity of offering to another level.

The Parisian together with The Venetian, Four Seasons, and Sands Cotai Central, all interconnected, is the only MICE space integrated resort complex of this scale. I'm truly grateful to the Macao government and the local community for their great support over the years in enabling us to implement this vision and strategy. It is in that same spirit of deep commitment to Macao's future development that we announced last October that we would be reinvesting over $1.1 billion over the next two years in expanding, renovating and reframing Sands Cotai Central into the Londoner, as well as adding approximately 650 in [ph] hotel rooms by completing the two towers at the Four Seasons in the same bridges.

The Londoner have tremendous potential as the third landmark must-see destination. The scale of the current SCC assets are unmatched in Macao, including over 6,000 hotel keys, a 400,000-square-foot retail mall, a 1,700-seat theater and over 300,000 square feet of developed MICE space. The Londoner renovation and expansion will completely re-envision the property, developing another 1.7 million square feet of space, expanding and enhancing all our offerings, hotel suites, retail mall, F&B, entertainment, and MICE. The fourth quarter results at SCC demonstrate the earnings power of this building with quarterly EBITDA above the target [ph] anchored by its strong position in premium end segment and a scaling range of hotel suite inventory. But the full potential this property in care doing to every segment of the market is yet to be realized and that is why it's exciting for us to embark on The Londoner project.

Upon its completion, The Londoner will accommodate more overnight guests than The Venetian and The Parisian combined. The Londoner will offer great potential for visitation and growth as a stand-alone integrated resort, but will also provide synergies with The Venetian Macao and The Parisian. Having three iconic must-see European-themed destination resorts with a broad range of amenities will strengthen our marketing and customer service capabilities and position us to grow faster than the Macao market in every segment on both, the top line and the bottom line in the years ahead.

Sands China is a company rooted in Macao and we will continue to strongly support the community. Following the pledge of 65 million MOP by Sands China and the Adelson Family Foundation to assist with the rebuilding efforts and the aftermath of Typhoon Hato we are working hard to provide financial assistance to the individuals, institutions and charities that have been significantly influencing. This long-term support of Macao will continue in the coming months and years. At the same time, we remain as committed as ever to playing the pioneering role in Macao's transformation into Asia's leading business and leisure tourism destination. Our decision to reinvest and develop The Londoner Macao reflects at long-term commitment to Macao and our confidence in its future.

We regard it as a privilege to contribute to Macao's success in realizing its objectives of diversifying its economy, supporting the growth of local businesses and providing meaningful career development opportunities for its citizens, including through our Sands Academy, and reaching its full potential as Asia's leading business and leisure tourism destination.

Now, moving on to Marina Bay Sands in Singapore. We deliver another excellent quarter at Marina Bay Sands with EBITDA of $456 million, an increase of 25% over the prior year. The quarter was marked by a strong VIP and slot revenue growth. Normalized EBITDA margins increased by 190 basis points versus the prior year reaching 52.5% for the fourth quarter supported by solid cost controls and efficiency gains. Our retail mall also continues to outperform the broader Singapore retail market with strong tenant sales growth of 10% year-on-year in 2017. It is worth noting that for 2017 the total operating profit from our malls in Singapore and Macao exceeded $570 million.

2017 was a record year for Marina Bay Sands and adjusted property EBITDA when measured in Singapore dollars. Because of its business in leisure tourism deals and strong positive impact on the local economy, Marina Bay Sands continues to serve as a powerful reference site to emerging jurisdictions that are considering large-scale integrated resort developments.

Now let's move on to my favorite subject, the return of capital to shareholders, yay dividends and yay buybacks. Our recurring dividend remains the cornerstone of our program to return capital to shareholders. Last October the Las Vegas Sands Board of Directors approved an increase in our recurring dividend for the 2018 calendar year to $3 per share for the year, or $0.75 per quarter. After establishing our recurring dividend program in 2012, this marks the sixth consecutive year that we have increased our recurring dividends to our shareholders. We remain deeply committed to our recurring dividend program to both, Las Vegas Sands and Sands China, and we look forward to increasing those recurring dividends in the future as our cash flows grow.

At the same time, we will remain opportunistic in returning excess capital via share repurchase program. We repurchased $75 million of stock during the quarter, we look forward to continuing to utilize the stock repurchase program to return excess capital to shareholders and to enhance long-term shareholder returns in the future.

Our leverage or debt-to-EBITDA ratio remains low at 2.0 times on a gross basis and only 1.5 times on a net basis. My view of our leverage levels has not changed. We're comfortable with a debt-to-EBITDA ratio of between 2.0 times and 3.0 times on a gross basis, before any additional debt related to development opportunities in new markets. In conclusion, our cash flow generation continues to be strong and predictable. The structural advantage from our scale, critical mass and product diversity remains evident in our strong financial results. The resurgence of growth in the Macao market has continued during the quarter with mass market growth accelerating. It feels like we have now returned to 2014 and the period prior to that. I'm very excited about the growth that we're experiencing in Macao.

We have grown faster than the market in mass, in both the fourth quarter and in 2017 as a whole. We will continue to make significant investments in Macao because we have a long-term and unwavering commitment to Macao.

The substantial redevelopment of Sands Cotai Central into The Londoner Macao will add a third iconic must-see destination to our Cotai Strip development. The full scale utilization of the [indiscernible] and hotel towers comes in an opportune time as we look to take advantage of the structural growth in Macao in coming years and stay ahead of the competition in terms of the quality and scale of our product and amenities. We look to the future with confidence. We have a strong organic growth outlook, we are strategically reinvesting in our existing assets while also pursuing new development opportunities and we have both, the intent and the financial strength to continue to return excess capital to shareholders.

Thank you for joining us on the call today. And now, we'll take questions.

[Operator]

[Operator Instructions] Our first question comes from Felicia Hendrix with Barclays. Your line is open.

[Felicia Hendrix, Barclays Capital, Inc.]

Rob, maybe we could just talk about Parisian for a moment and I did want to thank you for the really nice detail on the deck on that, it was helpful. So at The Parisian, it looks like last quarter may have been an anomaly on the VIP side, so just want to talk about that relative last quarter, this quarter, and how we should think about VIP at the property and what might have changed?

[Robert Goldstein, President & COO]

I'm not sure if anomaly is much of a very, very strong quarter; we've always cautioning of that this concentrated levels of play sometimes, be at Singapore, Macao. And clearly, The Parisian has some very, very strong play last quarter. I think The Parisian has captured the most important segment of all of the base mass, however the room product we build at The Parisian just isn't sufficient to meet the premium as demand and that will change with the addition of 300 more suites that come onboard in 2018. In addition, the Four Seasons apartments will be available to us for use in -- sometime in probably Q2 of '19. So I think with those 300 more suites and the 300 or 400 of the Four Seasons, you will see a much stronger premium mass customer at The Parisian. We have the demand, frankly, we don't have the room price to satisfy demand. In addition, we should keep knowing that depreciation was down 600 rooms this quarter, so it suffered bit there.

I think it's early days in The Parisian's evolution, I believe we'll get much stronger. It also issued a note that The Parisian performance this quarter was pretty extraordinary and that's a direct result of a 1,000 keys back on board, premium mass keys that drove most of that play. So I think you will see a light kind result at The Parisian wants to get the product right. We built a very, very nice hotel, very attractive hotel, a great demand hotel, I'm not sure we built the right room for us to satisfy the demand we created. With this incredible double-digit growth we're seeing in Macao, it matches perfectly with our massive footprint; our lodging, gaming, retail footprint. And even though with the market leader in mass as you know, we still outperformed the market by 25%. Our mass, table and slot revenue grew by over $300 million year-on-year but we think that's as much as 40%, 45% of the mass growth in the entire market.

And to show the reference, to see numbers of that magnitude you have to go back to '14, we did a $1.5 billion roughly in mass table in slot in this quarter; it's pretty extraordinary numbers. I'm convinced The Parisian will participate just like SCC and Venetian once it has the appropriate room product matching up with its mass and mass appeal. So yes, on the terms that we had more concentration of rolling play last quarter but yes, we believe long-term Parisian is a very strong product; it's just early days [ph].

[Felicia Hendrix, Barclays Capital, Inc.]

And then just switching gears to Singapore; Rob, you've highlighted previously that VIP -- the volumes could be volatile there. So I was just wondering if the decline year-over-year there was just due to the normal ebbs and flows in your business or anything else? And then also on the mass side, you did better than what we were looking for in the quarter but the volumes were also lower year-over-year as well so I was just wondering if you could comment on that?

[Robert Goldstein, President & COO]

I have two thoughts on Singapore; one is we're extremely pleased with the results this year, $1.07 billion is pretty extraordinary result. Yet, I would caution -- realize that Singapore has -- is not growing on the rolling side, in fact it declined a bit. And as we've mentioned [indiscernible], it's highly concentrated and continues to rely on two small segment of customers to drive it. So we're not seeing growth in that segment, we are seeing extraordinary management, I'm really pleased the team over there -- they did an excellent job of drawing cost, commissions, everything across the Board to create these big numbers that came out of MBS this year. I'd also agree with you that we're not seeing growth in the mass segment, it's hovering around 4.4, 4.5, 4.6 for the last eight quarters and I'm disappointed we haven't seen more growth at Singapore. I don't know why I would say otherwise until the future, I don't see why there would be any catalyst in the near future to drive that.

Singapore is a wonderful success story but at this point it's just a very large producer of EBITDA without growth prospects in the near future. So we would applaud management's efforts this year to create $1.07 billion, it could be a lot less and yet I'm hoping we'd see growth to make it easier in the future to create some more growth, be it rolling or non-rolling. Your points are appreciated and I agree with.

[Operator]

Your next question comes from Stephen Grambling with Goldman Sachs. Your line is open.

[Stephen Grambling, Goldman Sachs & Co. LLC]

On the Sands Cotai Central, renovation of the Londoner, I mean this -- maybe it's an adhoc, but what are the factors to mitigate any kind of disruption there and any sense for how you can quantify the potential impact or compare it to other types of renovations?

[Robert Goldstein, President & COO]

I can't really tell you what the impact would be, I do believe there will be disruption, that would be forced to think otherwise; it won't happen in the '18 until the very, very end of the year. We'll close down the Holiday Inn product late in the year, probably November/December. The next 10 months you won't see any disruption whatsoever and I would also just highlight it as the number is coming SEC -- $200 million plus this quarter are just terrific and it shows the power of that room product but imagine we can marry that product to a base mass demand and a retail demand and get that product upto Venetian type numbers and I believe we can exceed a $1 billion and more when we get to The Londoner.

Disruption is very hard to quantify, I would say to positive side we have two different casinos there, we can move business back and forth. The St. Regis will be under construction in the rear and will not be as -- it won't be an operating hotel, it's just a show at this point. So that will be less disruptive, Londoner will be more disruptive, the transition from the Holiday Inn to Londoner. There will be some pain along the way, I have a hard time Steven giving you a number because I don't know that number, it's never been done in this size and scale, it's truly a herculean task but I think the net result in '20 is going to be very, very helpful to the company.

We see great things at Macao this quarter, our run rate [indiscernible] normalizes pretty astounding and the market just seems like it has great, great win behind it. And so while we think this is a great transition for us to achieve, it will be disruptive in '19; I don't want to quantify because I simply can't.

[Stephen Grambling, Goldman Sachs & Co. LLC]

And then maybe changing gears a little bit; there has been the Macao Hong Kong bridge is seemingly always been in process. Are the things that you are doing as you think about the potential opening coming up in the next 12 to 18 months; hopefully what are the things that you can do to try to position yourself? A benefit from that, how do you think about how that will benefit the market?

[Robert Goldstein, President & COO]

I think we have to wait and have confidence the government will deliver us the bridge sometime in this year and it will take…

[Sheldon Adelson, Chairman & CEO]

They're saying it will be done in the first half of this year.

[Robert Goldstein, President & COO]

No, I think we'll just wait and see. I mean, I'm not sure we can do a lot but wait and see how the connectivity; how we can best -- obviously it benefits the entire market, we're excited to see it happen but it's hard at this point to make a concrete observation that we would do as a company. I think as an industry, we're waiting and hoping that thing can really deliver some fresh products and fresh customers and be a real value add, we've all been [indiscernible] for a long time; it's a major achievement for the government to achieve it and get it done and we as operators wait patiently to see how it works.

[Operator]

Your next question comes from Shaun Kelley with Bank of America.

[Barry Jonathan, Bank of America]

This is Barry Jonathan for Shaun. For Macao, I was just wondering if you can give any color on what you think drove the 52% growth in premium mass in Q4? Is this just more volume of players, lower players stepping up or just generally quality of players driving it? Thanks.

[Robert Goldstein, President & COO]

I think it's all of the above, I think it's a lot more players, I think it's larger people -- bank rolls perhaps, higher visitation. I also think as a company it's underappreciated how valuable these assets are. They are coming from further away, they are younger, I think more fluent. There is a new generation we're seeing and especially in the plause [ph] and even the new Venetian suites; I think we're experiencing a really strong growth period that is further filled outside Guangdong. The visitation outside Guangdong is growing and to us as the guys own 13,000 sleeping rooms it's pretty good. We're seeing huge demand, hotel rates have spiked, occupancy has spiked, our entertainment offerings have just been extraordinarily well received, we can't -- we can't get enough shows in there, just keep adding more of better shows to the mix and the reception has been phenomenal.

So our growth is tied very simply to -- it's coming from further away, we've got the sleeping rooms to accommodate it, it's mass and premium mass, it's -- every weekend it's mid-week, we're seeing numbers mid-week that you see weekend successes. We're seeing dropping numbers that are just simply off the chart, a year ago couldn't comprehend these kind of numbers we saw in the last three or four months, it's very exciting and it's full force and December was even stronger than November and October. So we're hoping this continues to charge forward and I think our biggest advantage is this massive footprint of 13,000 rooms [ph], primarily in Cotai, the growth is in Cotai, that's our major footprint obviously. It's entertainment driven, it's mass -- premium mass driven, as coming outside Guangdong or which is honestly falls into -- that's the reason we're growing so quickly. You know, $300 million of growth in one quarter year-on-year on mass is pretty extraordinary for any company.

[Barry Jonathan, Bank of America]

And then just a quick one on Vegas; I'm wondering if you have a view on other operators starting to invest again in the Vegas market. I know in the past you've talked about maybe converting the condo tower to 1,000 hotel rooms or so. And while we're talking Vegas, any update on the arena JV with MSG? Thanks.

[Robert Goldstein, President & COO]

Yes, the arena JV with MSG is live and well, construction will start this summer, it's going to be quite an arena, we'll have a public [indiscernible] are coming out here to present publicly, I think it's going to be in March -- is it February or March; I'm not sure of the date yet but you're going to see something is pretty spectacular. I know our neighbors across the street, the wind guys [ph] have seen it and it looks extraordinary, it's a great building, it's just great but what Jim [ph] build is extraordinary. So we're looking forward to construction commencing this summer, hope we're opening in 2020.

As far as more building Las Vegas, why not, it's a great market, it's a great place to live and work, the growth is returning to Las Vegas, it's more of a lodging based market deserving the past. The Black Knights have done extraordinarily well, the hockey has been -- is just terrific, the football is coming, why not? Las Vegas has some great days ahead of it, so we're very much in favor of the market growing and if competitors want to invest dollars, so be it.

[Operator]

Your next question comes from Anil Daswani from Citigroup. Your line is open.

[Anil Daswani, Citigroup Global Markets]

Just another one actually on premium mass in Macao, clearly that's been outperforming the base mass business. Do you guys see that being the key driver in '18 and '19 as well and can you give us a flavor for how many rooms you guys are now comping in the premium mass segment and how that's compared over the last couple of quarters? In addition, once you guys open the St. Regis suites as well as the Four Seasons suites, do you see that comp ratio going up as you can put in some higher end premium mass players into your product?

[Robert Goldstein, President & COO]

Well, there is no question that premium mass is where the money is being made, it's double -- it's 52% and base mass is double-digit, we're not complaining about solid double-digit growth in base but to your point the driver is premium mass unequivocally. As far as our approach this whole thing, we clearly are building this; think about this, we're going to add 650 keys using the Four Seasons of the St. Regis to sometime in '19, that will be built for the premium mass customer and those customers drive extraordinary amounts of business on buildings, we are extremely excited about what could be a surge in our business next year from that. There is no arguing that that's where the profitability is coming from, we still like our base mass, it's important to us, what's driving this market right now for us and for most of the operated tours is the premium mass customer.

We're a 50-50 cash-comp mix right now in cash versus comp, I can't see a change in the whole loop [ph], I do think the greater lion share of the Four Season suites and the St. Regis will go to the premium mass customer, probably be a much more skewed to that base. I mean those rooms are built -- those products are built for that customer; as long as they perform the levels they are giving us now, we can keep growing our topline and the flow through is there, the extraordinary, why not. As you see our flow to this quarter, not just the top line growth but the flow through the margin has just been excellent and so that's the future of the business as we see it today.

[Anil Daswani, Citigroup Global Markets]

And my follow-up would be, is there any update on monetizing the mall product in Singapore?

[Patrick Dumont, EVP & CFO]

So right now as you can look, the year-over-year sales number -- salesforce [ph] per square foot and Singapore is up 15%, it's the best mall in the world, it's exceeding everyone's expectations. As per performance we saw some talent remixing going on, we think we'll get more out of that asset in the years to come, we're very proud of it, it works incredibly well and demonstrates the power of the integrated resort. That being said, we have nothing to update anyone on the process, if anything happens we'll let you know but right now we're optimistic, we're hopeful that at some point that will come to fruition but at this time we're really just proud of the assets operating performance, how iconic it is, how well it fits in with the rest of the integrated resort and we'll let you know if we have anything to update you on. At this point, no comment.

[Operator]

Your next question comes from Joe Greff with JP Morgan. Your line is open.

[Joseph Greff, JP Morgan Securities]

Sheldon, you always say that one of your favorite topics is the return of capital; given the momentum in across the board and all of your markets in -- what we would characterize as limited CapEx over the next few years relative to your free cash flow generation; is there any appetite to assess capital return more than just once a year, i.e. few times a year or every quarter?

[Patrick Dumont, EVP & CFO]

The highest and best use of our capital is for our Chairman to make investments of high growth projects, so that's our primary focus. So if there is an opportunity in Japan or Korea, we hope that we can put our Chairman to work and have him develop something extraordinary like he does in every other market we're in. That being said, if we have excess capital, I think we've said all along that our dividend is our return to capital cornerstone and so we'll look to increase that prudently and sustainably in the future. And of course, the lever that we can pull to modulate our return to capital is our share repurchase program. So I think if you kind of look through that waterfall, that's how you should frame out any excess capital that we have and we'll go by that guidance, that's something that we talk about with the board very frequently, that's the discussion we'd have with our Chairman very frequently and I think that's how our company and shareholders ultimately will get comfortable. So I think that kind of the process you should have in your mind or framework you should have in your mind as you think about excess capital and what we look to do with it.

[Operator]

Your next question comes from Carlo Santarelli with Deutsche Bank. Your line is open.

[Carlo Santarelli, Deutsche Bank Securities]

I've always had the perception that that kind of premium mass and VIP were somewhat tethered at least from a cadence perspective, obviously premium mass as you mentioned in the slide is up 52% year-over-year where only chip volumes kind of slowed a little bit and we're up kind of mid-single-digits. First of all, could you talk a little bit about the decoupling of those two metrics? And then maybe, if you can, any specific industry drivers in terms of where you're seeing kind of that strength in the premium mass from Mainland China coming, is there any specific industries or sectors of the market that are really driving it?

[Robert Goldstein, President & COO]

I think they call it second but parked first [ph], and that is, I don't think we can identify where it comes from in terms of the drivers industry or what business they come from. What we can tell you with certainty it comes outside Guangdong increasingly. What we like to see and we're seeing is more penetration in the other provinces, we're seeing fresh money, fresh customers, it's very encouraging to see younger people, we're seeing them packing our retail malls and go to CRE -- our shows and using our suite product and we're seeing lots of them. So I would think that is a very positive sign for us, and as that increases, again, that's one of our hidden advantages or not so hidden advantages.

As far as the decoupling, I missed the part a bit to your point, what has happened because I agree with you that typically, historically these two segments were tied together at the hip; the premium mass grew like it's growing, you see junket grow much more. Now one of the theories I have and it's not substantiated is that perhaps we're seeing more and more younger people opt for direct play and not going through junket and they are opting not that the situation of rolling environment. We're seeing -- we of course have not been as strong as others which we were or not as strong as others in the rolling business with the junkets, we're trying very hard to increase our share, we want to be back in the industry average and we're working with the junket people as well as our physical product and to improve it.

But clearly, this quarter has been decoupling of those two segments and I guess I would think this way that demand is still there to gamble but perhaps the demand is moving more towards direct non-rolling as opposed to rolling chip program tied to a junket operator, that's the only rational explanation I can give you. I think demand is still there and demand is there stronger than ever but perhaps it's moving away from the rolling segment into the non-rolling which obviously has some benefits on the margin flow through. And again, from our perspective it's more of them, we're seeing a lot of customers and we're seeing a lot of people outside Guangdong, and so our rooms are being used as special weekends and holidays but even mid-week, some of the non-rolling drop we're seeing is just extraordinary.

And so that's as good an explanation I can give you, I don't know if I can give you more clarity on the decoupling but clearly, the number is evident it's there.

[Carlo Santarelli, Deutsche Bank Securities]

Thank you very much, that was really helpful. I appreciate it.

[Sheldon Adelson, Chairman & CEO]

What I'd like to tell you is that Macao feels like it's going back to 2014 and prior to that. Nobody could tell you with certainty how much the VIP is going to grow in the forthcoming year, how much the mass is going to grow. The mass is comprised of additional people and Macao is getting additional people. I see on our Lays [ph] accounts every day; on some we can set holiday, we get as many as 400,000 people in one day coming into our properties, that's quite a bit, 400,000 people. So I see Macao growing like it did before and we're going to take advantage of that. Spending the money in The Londoner is for the purpose of reframing the property and bringing the same number of people to Sands Cotai Central, soon to be called The Londoner.

You know, you asked before and Rob answered that it's going to be a major disruption; I disagree with that, I don't think it's going to be any major disruption any more than any other property that's [indiscernible]. So we have the equivalent of two properties, two individual properties on that side of the road, we call it slots 5 and 6. For now we would have one lot, one thing. Here we've got two lots together and we still don't have a team for a say [ph]. I don't see any reason for this to be any more disruptive than any other renovation of any other property hotel anywhere. So as a matter of fact, there is -- there will be two major entrances; one for the first two buildings and one for the last two buildings. So it's not as though the entire property is going to be worked on at onetime on one day and all the entrances will be closed, we'll be doing it in sections where we'll have the least disruption. So I disagree with the fact that it's going to be a major disruption.

[Operator]

Your next question comes from the line of David [ph] with Jefferies. Your line is open.

[Unidentified Analyst]

I just wanted to ask one detail and as I look across at the progress of The Parisian, I'm just trying to think through what the EBITDA margin, opportunity or aspirational level could be based on looking at some of the other properties in Cotai which are -- have managed to get up into the 30s. And last quarter was particularly high and this was a little bit lower, and if you could just color that in a bit that would be helpful. Thank you.

[Robert Goldstein, President & COO]

I think we should be clear that we have a lot of belief in The Parisian, it is 30% or 30.6% in Q3 '17 margin, it's 29.3% this quarter, normalized. But I think the whole story isn't margin, we're missing an important part -- the growth in Macao this quarter, our growth and the markets growth is tethered to premium mass, we're not getting our fair share, it's simple; we have demand like crazy that have property walked in it, it's chalked for, our people want to stay there, they are disappointed in their own product, we need more premium suites to address it. That product comes, we went back and redid these suites, they are very, very -- they are [indiscernible], we're very pleased with the end result, it's a various [indiscernible] and customers are going to love it. If it comes onboard first in Chinese New Year's and throughout the year, I think it's really simple, The Parisian is more topline to get to the 150, 160, 170 because I want to see at $500 million to $600 million building is going to be there, the question is it's got to be reflective of the market; the market as we've talked about for most, the call David is tied to this mass of tsunami of revenue coming out from premium mass.

We saw The Four Seasons, we're seeing at The Venetian, The Venetian numbers are just terrific and we're making $0.5 billion a quarter top line at The Venetian in these base mass and premium mass markets, we saw this quarter at Sands Cotai Central. There is no way not to see The Parisian getting there but every market, customers dictate where they want to spend their money, it dictate where they want to be; they want to be at The Parisian, they want to sleep for example at The Four Seasons right now because the room price is better, you can see that The Four Seasons is taking off and they've got this $75 million this quarter normalized, it's now being a plus $300 million building.

Once we fix the room price, both inside The Parisian and honestly, The Four Seasons suites are the hidden opportunity for us. If you get 600 or 700 suites between the two of those buildings adjacent to The Parisian you're going to see a big uplift in The Parisian and I think you will see it in The Four Seasons. The Four Seasons and The Parisian almost work in tandem, you think about it; one's with a mass, very attractive product, one's a very high end product, you throw in 650 or so premium mass suites, you're going to see some very, very good numbers out there. I don't want to make you feel disappointed that we haven't gotten there but we are disappointed we haven't gotten there. We need to fix the product and get where we can get to. This product can be every bit strong as we're seeing at the other buildings that have the right mix of room.

And the SCC results this quarter reflect a very strong room product with no base play, that's what I wonder is going to happen. The Venetian shows the product with all cylinders hitting, great mass play, premium mass play, even great broad [ph] play; and we're 1,000 rooms of The Venetian, it's becoming a worldclass product again, could get to 1.4, 1.5, we think there is a lot of room left. If this march continues to grow double-digit premium mass, we're at a whole new place [ph], a whole new place to make money, pretty exciting times for us.

[Patrick Dumont, EVP & CFO]

One other quick comment. If you remember, a couple of quarters ago we talked about the expenses we took out of the business and the rationalization that we did in order to make it more efficient so that when we did receive revenue growth there would be leverage against that revenue. I think you've seen that in Sands Cotai Central, the margin change there in this quarter. One thing to note as Rob referenced, the rooms that are offline and are being modified or being changed to address the customer that's very high value and very high margin; so the segment differential there and the value that customer will be seeing, eventually you will see better flow-through in The Parisian when those rooms open up, and just as you did in Sands Cotai Central, just you've seen the strong margins that you get at The Venetian.

So system-wide we're very happy with our expense base, as we said in the prior quarters you will start to see some margin expansion as revenues grow, we believe that will continue.

[Operator]

Your next question comes from Robin Farley with UBS. Your line is open.

[Robin Farley, UBS Securities]

I wonder if you could just sort of speculate out loud a little bit on why you think the VIP volumes aren't growing in Singapore, just given the improvement we've seen from other VIP play at Macao, just why that's not happening in Singapore?

[Patrick Dumont, EVP & CFO]

Rob and I will take my best shot at this. First of all, we've always said it's concentrated to not thousands but hundreds of players. I also think that Singapore is somewhat a victim of -- you've got some competition in the region, I think the Philippines have grown a lot, Thailand has been renovated nicely, I think you've got -- Macao is going to be a very, very important destination for people coming out of Korea and even Japan, much more -- I think it's much easier to go to Macao than Singapore for all the premium mass Chinese play. I had to point to those examples, as well as you know, we've had some -- we had to be very careful, we cannot remarket Indonesia, that's becoming increasingly more difficult and so we're very cautious, we run our business that way; we take no risks with marketing, we take no risks with collections, we take no risks we think are unnecessary.

You're right, I think the growth in Macao is driven by premium mass Chinese business out of Mainland China but I think it is opting very, very nice resorts in Macao that are attracting a lot of attention, so it's also easier to do business in Macao in terms of credit, money movement, etcetera. So I think we're the victim of a very strong Macao market and increasingly strong competitive market, be it the highlands, be it Philippines, etcetera. We're not far from giving up, I mean the property made $1.7 billion is not too bad and as you know, it might be a concern is not enrolling but in the premium mass and they are non-rolling because that's where most of our proper resides and most of our margins are 60 plus, that's more concerning and that's a mix that comes out of this decline in Singaporean [indiscernible] but also decline in other markets around this.

So as much as we've focused on rolling, I think the non-rolling is more disturbed and we can't grow that number beyond 4.5, 4.6 for the last 7 or 8 quarters. We're going to keep at it, we've got a very good team on the ground there, we'll keep looking at cost but obviously we'll love to see some top flying growth and that's the best indications or best thoughts I can give you on the growth prospects for Singapore.

[Sheldon Adelson, Chairman & CEO]

We're going to press more in the Pacific room countries in Korea and Japan to come to Singapore. I'm very excited about Singapore reaching the highest quarter that we've had of the year since we opened it in 2010. So I can't say that we're sorry, that we achieved the record, I'm very happy we achieved the record and I'm not apologizing for it.

[Robin Farley, UBS Securities]

I was going to also ask just switching to Macao for a moment, whether your reinvestment there; do you think that will lead to maybe greater table allocation in 2018 or 2019 above what you've received already?

[Robert Goldstein, President & COO]

We never talk about that because it's beyond our control. As you know, we align the government to make decisions for us and have no comment or table allocations or what we might expect in future.

[Robin Farley, UBS Securities]

I'm just curious about your convention mix for the full year in Vegas was versus the prior year if you happen to have that -- your convention mix as a percent of room nights?

[Robert Goldstein, President & COO]

I can't tell you the mix but I can tell you we had the best room nights we ever had and I mentioned we broke 800,000 room nights in Vegas. We're seeing a bigger opportunity for '18. I know there has been talk about the Vegas market, we think it's strong, we think convention business looks very strong, there are some concern about international business because of the October tragedy but we've experienced a pretty good quarter here at 92% or so, we feel good about '18, we feel very good about our convention or a nice demand is accelerated and the bigger part of our mix. So if you guys have those numbers -- we have the actual number to split for you. This is 30% on the group business for Q4 against 39% for the FIT [ph]. But I think the real keyword business here is, we're always a group house, we'll always will be a group house, we have complete confident in the group market in '18. Again, we hear some talk to the international business going off but we feel very good about Las Vegas, the tragedy made for some very difficult moments around here and great concern but the market has bounced back and it appears to be going pretty strong at this point.

[Sheldon Adelson, Chairman & CEO]

We have the strongest MICE facility in the world, no integrated resort, no hotel has small MICE business than we do, that arises from my experience and the experience of our staff having been involved in the tradeshow business but as far back as 45 -- give or take 45 years. So somebody just builds a new convention center few years ago and says in the newspaper, we're copying Adelson; you can't get that kind of experience. When I was in Japan a few months ago, one of the officials from the city of Osaka said, I remember you back in the early 80s you helped to design Makahari Mass [ph], now that's almost 40 years ago. Makahari Mass [ph] is the biggest exhibition and convention center in all of Japan and the governor of -- because [indiscernible] -- the Governor of Chiba [ph] that was adjacent to Tokyo in the way to Norida airport saw what I did with the conducts and he said, he sent his entire staff and he came as well to my office in Boston and we redesigned that convention center.

So somebody who builds a convention center today isn't going to have the experience and the know-how how to deal with the people. We are -- we earn in our Sands expo center here in Las Vegas. I think more money than any exhibition is called convention center in the United States and we've always earned money, right almost from year one. So nobody has -- that's why we're in the strong position when it comes to new destinations because there isn't a city in the world that doesn't want MICE space, that doesn't want MICE business. We're the experts in the MICE business, we know how to get it, if we get another location in the Pacific Rim, we'll have several locations surrounding the Pacific that could take shows that move from one city to another every year that we're in a better position to pick those shows up to be in our convention center. And I think I'm not the only one who feels that way because it's my background but the people -- the elected officials in various perspective new destinations, they also feel that same way.

[Operator]

And your last question comes from [indiscernible]. Your line is open.

[Unidentified Analyst]

My question is -- I have two of them that focused on the development of The Londoner. First of all, Sheldon had talked about an incremental $1.7 million square feet, I'm assuming there are the suites comprised off reasonable chunk of that, are you developing any other space that doesn't exist today?

[Sheldon Adelson, Chairman & CEO]

No. We are looking to the government to give us an okay to do that but I don't want to make any statement vis-à-vis how they've responded to us. We're taking, we're adding in the apartment side of the tower that's close to a million square feet of the St. Regis tower where we have about 300 apartments. And so that's a substantial part of that 1.7 million. We have warehoused one or two levels for more MICE space and that will open up more completed space and that will contribute another substantial portion of the 1.7 million. I can understand what you're thinking, we're not adding 1.7 million, we're converting unused space now from unused to used; so maybe we should have explained that a little better.

[Robert Goldstein, President & COO]

Say the rig is 1 million square feet roughly, and that's a sheld hotel [ph], it's not been buildout but shelled. The 300,000 was our retail -- additional retail, there was also shelled but not built out, the same with the MICE, 400,000 more of MICE shelled, not built out. So it's a mammoth building, big footprint, a lot of which was never used.

[Unidentified Analyst]

And then just the other, the last question was; when you think about reframing the properties, what are the kind of iconic tourist sites -- are you planning to put out outfront to act as a tourist attraction?

[Sheldon Adelson, Chairman & CEO]

The outside will be like the Big Bang [ph] and the Parliament building. We will have the tower bridge represented somewhere, we will have telephone booths that are all over London, we'll use them as ATMs; so we'll have the telephone booths as ATMs or vice versa, we'll have two level buses, we'll have the bear skin hats, a plenty, like the guards at the Beefitters [ph] at the Buckingham Palace and maybe we'll even have some horses in the -- and puck [ph] skin hats riding down the Cotai Strip. Look, I want to say that one thing, people won't talk a lot about it but we have 13,000 rooms interconnected. Can you imagine if that was in Las Vegas or any other location; I created that by creating the Cotai Strip and if you could see 13,000 rooms without going outside you could connect to all of the properties together without stepping outside the addition space. And it is nowhere else like that in the world we have a property of different priced rooms of different sized sleeping rooms and we have large and medium, maybe even small casinos; so there is a mixture of taste for everybody who wants to have a different experience.

There is no other property in Macao that has done that, and people say we have a lot of tables. Yes, we have a lot of tables because when I built the properties with so many rooms and a common restaurants and entertainment and the arena; and so much for -- to attract so many people. Whoever gets 400,000 people in one day in their properties, never, no category, no good properties in the world has ever attracted that many people. So I'm very proud of the fact that we have an interconnected 13,000 rooms that covers from small to medium to large in every aspect; restaurants I never added them up but we probably have 100 or so places to eat which is not good for my belt size. So it's -- we have that large number of tables because we needed them when we built, and so we have them; not that we've got any extra, frankly, we've got fewer than anybody else or fewer at the same time.

So I'm very proud of where we are in Macao and I'm very excited about the possibility that Macao can grow. You guys weren't sitting there like I was, standing on a hill, looking out over the swamp and the bay and saying to my wife and her colleague with me, I'm going to turn this bay and the swamp into Las Vegas. And everybody laughed and criticized me, Stanley [ph]. Stanley said he is going to fail, he will be in bankruptcy, he will never get the first place built, if he does get it built he will never get it open and I said and we created a confrontation. I said Stanley, if it's too hot, get out of the kitchen.

I'm sorry to say he is not around as much so he could see that Cotai became the equivalent of what I said the Las Vegas Strip compared to downtown. Now there is something that is a big jolt in the arm that downtown is going to get when the bridge opens. It's said that it's going to open operational by the middle of this year, of course we've been hearing that for a couple of years but there is a lot of belief that it will open this year. That could change downtown dramatically, people who have approached us and they want to buy the Sands Macao, I don't want to sell it because I think that when the bridge opens it could be a different property, on the upside.

So I'm very optimistic and I'm very confident about the growth of Macao. As I've said a couple of times today, it feels like 2014 and earlier.

[Operator]

There are no more questions at this time.

[Sheldon Adelson, Chairman & CEO]

If that's the case, I want to thank everybody for calling in today and I'll consider this earnings call adjourned.

[Operator]

This concludes today's conference call. You may now disconnect.