Ready for business: A replica of St Mark's Square at the Venetian Macao, which officially opened yesterday. The resort will host 44 major events over the next 2 years, the largest one expected to attract 30,000 visitors. GAMING and resorts operator Las Vegas Sands' newly opened US$2.4 billion Venetian Macao in the Chinese territory may be the biggest single structure in Asia, and it may be the second biggest building in the world.
But its Marina Bay Sands (MBS) integrated resort in Singapore will be more expensive - especially now that costs could escalate by as much as 40 per cent to hit some S$5.2 billion, or about US$3.4 billion.
Speaking at a press conference here yesterday at the official opening of the Venetian Macao, Las Vegas Sands COO William Weid-ner said that it had been 'struggling to stay on budget', but rising construction costs coupled with the refinement of design on the complicated curving structure of the hotel towers is likely to push up the overall cost of the Singapore project by between 20 and 40 per cent.
Sands beat three other bidders in a hard-fought campaign last year to clinch the licence for the Marina Bay integrated resort. The cost of MBS had previously been estimated at S$5.05 billion including S$1.3 billion for the land. Taking away the land value and factoring in a 40 per cent rise in project cost, the Marina Bay resort could come to about S$5.2 billion.
Mr Weidner was nevertheless optimistic about the opening date of the Singapore project. 'If we keep our noses to the ground, we can open in late 2009,' he said.
So far, Sands says it has awarded S$700 million in construction contracts for the Singapore project. A S$1 billion contract will soon be awarded to build the hotels.
Mr Weidner said that Sands was in discussions with the Singapore government on construction costs but did not disclose details. 'The government knows where we stand,' he said.
Unlike most casino business models, Sands will also depend on the meetings, incentives, conventions and exhibitions (Mice) business.
Giving an update, Mr Weidner said it has currently 20 major events booked at MBS up to the year 2013. For the Venetian Macao, 44 major events have been booked for the next two years, with the largest expected to attract 30,000 visitors.
But Mr Weidner does not expect the North Asia market to eat into the South Asia market. He added: 'When they see what is available (at the Venetian Macao), it will be much easier to sell Singapore.'
Selling Macau as more than just a casino destination has not been tested in the Chinese territory but Sands hopes to attract visitors to extend their stay with attractions that include a 15,000-seat arena, a US$150 million Cirque du Soleil show and a one million sq ft mall with 350 shops.
The number of visitors to Macau has been increasing; up to 26 million people are estimated to visit the territory this year.
Indeed, demand for travel to Macau has become so intense that the Chinese government decided to place some travel restrictions on its nationals earlier this year.
Macau has benefited from a surge in mass market players from China and, interestingly, Sands' first casino in Macau - the smaller Sands Macao - was targeted largely at this market. It was so successful that it recouped its investment within a year.
The much more expensive Venetian Macao will be targeted at the leisure and Mice segment. Although Mr Weidner would not say when it would break even, he said it expects a yield of over 20 per cent per year on its investment. He added that Sands could sell some of its assets, including the mall.
Sands will also be looking to grow its premium-play segment which currently makes up 60 per cent of its gaming revenue.
Another strategy is to expand within Asia.
Also speaking at the press conference, Sands CEO and chairman Sheldon Adelson said that it would open other integrated resorts in Asia if allowed. But he added: 'This is not a race.'
Noting that China alone hosted 60 million Mice delegates in 2003, Mr Adelson said, 'There are only so many events you can hold in onebuilding.'
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