Las Vegas Sands (LVS) Q2 2022 Earnings Call Transcript

Las Vegas Sands (LVS -0.36%)
Q2 2022 Earnings Call
Jul 20, 2022, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Sands second quarter 2022 earnings conference call. [Operator instructions]. 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

Thank you. Joining the call today are Rob Goldstein, our chairman and chief executive officer; Patrick Dumont, president and chief operating officer; Dr. Wilfred Wong, president of Sands China; and Grant Chum, chief operating officer 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 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 total measures is included in the press release. 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 please limit yourself to 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.

With that, I'll turn the call over to Rob.

Rob Goldstein -- Chairman and Chief Executive Officer

Thank you, Dan, and thank you for joining our call today. A few brief comments and then move to Q&A. The recovery in Singapore at MBS accelerated during the quarter with property EBITDA reaching $319 million. The relaxation of pandemic-related restrictions in Singapore and many of its source markets has enabled this encouraging improvement in the financial performance at MBS.

We expect a more robust recovery over time as additional airlift in Singapore comes online and further relaxation measures in the region are implemented. Our conviction to the long-term opportunity in Singapore market remains steadfast. Our $1 billion capital investment is underway at Marina Bay Sands as introduced exceptional new suite product and premium segment focused amenities to the resort. More offerings will be added throughout the remainder of 2022 and '23 and this will enhance the property's appeal to premium customers seeking the highest-level travel experiences.

In addition, we look forward to substantially increasing our investment in the Singapore market as we execute our expansion plans at Marina Bay Sands in the years ahead. Singapore remains an outstanding market for additional investment. Let's turn to Macau. The operating environment there remains very difficult in periods when the restrictions have been lifted, the customer demand and spending in Macao has proven resilient at the premium mass level from both a gaming and a retail perspective.

As the market eventually recovers, our $2.2 billion investment program at Four Seasons in London will provide outstanding growth opportunities in both the premium and mass customer segments. We appreciate the clarity of the revised gaming law in June. We look forward to participating in the concession retendering process as it proceeds. We continue to have the largest footprint in this incredible market.

We retain great optimism and our ability to perform to pre-pandemic levels and beyond the Macau visitation returns. We would welcome the opportunity to invest billions of additional dollars in Macau, we continue to believe Macau is an outstanding market for additional investment. We can see our portfolio of resorts in Asia to be an ideal platform for growth in the years ahead and additionally, we continue to pursue other opportunities in large land-based destination resorts in the U.S. and Asia.

Let's go to Q&A.

Questions & Answers:

Operator

Thank you. [Operator instructions]. And the first question is coming from Joe Greff from J.P. Morgan.

Joe, your line is live.

Joe Greff -- J.P. Morgan -- Analyst

Hello, everybody.

Rob Goldstein -- Chairman and Chief Executive Officer

Hi, Joe.

Joe Greff -- J.P. Morgan -- Analyst

Would love to start with Singapore here. When you look back at trends within the 2Q, which were obviously encouraging, and you look at the premium mass and the VIP segments, was there anything notable in one segment versus the other throughout the quarter? How -- even with the recovery month to month in the segments throughout the quarter other than seasonality, you talked about source markets driving improvement. What geographies are driving that improvement? And then lastly, with my multipart question number one here, can you talk about what you've seen so far in July and the first 20 days here?

Rob Goldstein -- Chairman and Chief Executive Officer

A lot of questions there, Joe. We're not going to break out the quarter. I think we'll be -- it's suffice to say, we're pleased that we back in the -- in a strong position in Singapore. And the fundamental growth there comes from obviously both base and premium mass.

I don't think either one outside the other is consistent movement in the right direction. I think the biggest thing we're seeing is the airlift is opening up, and that also remains to be the most challenging part of the Singapore recovery. Airlift is still a challenge. We're getting a lot of good business out of the region, especially of Indonesia and Malaysia, but I think there's a lot more opportunity as the Airlift returns.

And I think you see that in our deck. The Changi monthly visitation numbers are still relatively less than 50% of what they were pre-pandemic. So although we're delighted with Singapore and the numbers reflect that, we think there's reason to be optimistic in the months ahead. If you want to just keep -- that's what I think I heard you say.

Is there more to it?

Joe Greff -- J.P. Morgan -- Analyst

No. I mean -- can you just talk about what you've seen so far in July? Has that trend continued?

Rob Goldstein -- Chairman and Chief Executive Officer

I think you know we're not going to do that. We're not going to talk about July. I think the numbers -- our deck gives you a real good sense of what happened in Q2. And I think the story in Marina Bay Sands is a regional story and Singapore story.

As that place gets more visitation. I think if you look on Page 16 of your slide present today -- your deck there, you'll see that we've not even reached 50% capacity into China, it's like 46% of what it was May of '19. So we're doing these numbers with still a very, very distressed airlift. And I think you know, unlike the U.S.

where there's unfettered ability to get to regional markets, airlift is back, transportation is still a place you need to apply to. And so the Airlift story can just hamper the recovery. So I think the $300 million plus quarter is a pleasant upside to what we thought we'd do. But there's, I think, a lot more room to run as this market opens up into places like Japan, Korea, and more travel.

We're really more dependent right now on the closer in foreign markets.

Patrick Dumont -- President and Chief Operating Officer

Joe, one other thing, it's Patrick. I think one thing to note when you look at Marina Bay Sands is that we're not at capacity. And what I mean by that is, to Rob's point, if you look at the amount of airlift coming into Singapore, it's not where it can be but we're at levels that are very strong relative to 2019. If you look at our non-rolling volumes, which are really speaking to the premium mass segment from the catchment area.

This is only going to grow. And the good news is we have our team together. One of the things that's been slowing some of the growth coming out of the pandemic and really capturing some of the pent-up demand and the return to normalcy is the fact that many operators in the luxury segment didn't necessarily keep their team together throughout the pendency of the pandemic. We were fortunate enough to do that.

And so now our team is ready to respond. So we have plenty of capacity to absorb the growth as it comes in. So our view is that this is a good start, but we have more room to run.

Rob Goldstein -- Chairman and Chief Executive Officer

To Patrick's point, Joe, one more thing I think you're aware. We were there, I guess, a month or so ago. One thing that's disturbing is the hotel business, even the luxury brands haven't been able to get open to 100%, some running at 40%, 50% capacity because they don't have adequate personnel and that obviously feeds into Marina Bay Sands. So as they get open fully this year, as that market returns as employment grows, I think we'll grow with that.

There's a lot of room to run here if we get that place fully open and airlift returns to pre-pandemic numbers.

Joe Greff -- J.P. Morgan -- Analyst

Great. Thank you for your thought there. Switching over to Macau. Can you just talk about what your average daily operating expense average cash burn rate has been during this most recent casino closure there?

Rob Goldstein -- Chairman and Chief Executive Officer

Grant, are you awake? Grant?

Grant Chum -- Chief Operating Officer

Yes, we're here. So yes, sorry, just momentary lost you. Yes, Joe, I think. Obviously, second quarter, we were running at this $110 million EBITDA loss.

So we'll basically just over 1 million a day. Now as we went into second half of June, we have a local outbreak of COVID in Macau and therefore, into the third quarter, clearly, the revenue environment is lower than it has been in the second quarter, especially with the last week's closure of the casinos as well. So I think you can look back to where we were in 2020 in a very, very low tourism environment in the middle of that year and take it from that in terms of the actual daily cash burn rate although I think our operating expenses have moderated a little bit since then, but that's the ballpark region.

Joe Greff -- J.P. Morgan -- Analyst

Thanks, guys.

Rob Goldstein -- Chairman and Chief Executive Officer

Thanks, Joe.

Operator

And the next question is coming from Shaun Kelley from Bank of America. Shaun, your line is live.

Shaun Kelley -- Bank of America Merrill Lynch -- Analyst

Hi. Good afternoon, everybody. Rob, just sort of going back to Singapore for a moment, the Changi numbers are really interesting. Is that a pretty good guide for, I guess, visitation levels at the property and sort of where I'm going is thinking about spend per visitor, right? We've obviously seen the pent-up demand and that those numbers rise across U.S.

regional gaming, Las Vegas Strip. And I think we're all struggling a little bit to know exactly what Asia is going to do, but we can all, I think, do the math if visitation is down 50%, and obviously, you're at 75% or 80% of your productivity levels already that suggests very good spend-per-visit levels, but obviously, I don't want to extrapolate just from the airport, if you could give us a little bit more guidance.

Rob Goldstein -- Chairman and Chief Executive Officer

Well, I think it'd be careful in terms of extrapolating without recognizing we are running high occupancies already at Marina Bay Sands where I think you struggle a bit is to factor in when the rest of the market recovers. That's why I referenced the other high-end luxury hotels. There are lots of sleeping rooms, who we benefit from. They come to shop, eat with us, gamble with us.

We're not getting that lift. And I think that's the -- could be very impactful down the road. We're very happy with the spend levels we're seeing, and we're happy with the occupancy we're getting, but we're not getting that extra -- people don't sleep in our hotel necessarily coming over to gamble, shop, etc. So I think that's where we're trying to point out the visitation levels.

I also think it will be helpful in driving better levels of play and spend as these other markets. So you can't lose 3 million people in a month like May and not have some impact on your numbers. The question you raised is how high is up. And I don't -- I'm not prepared to answer that.

I don't know. But you can't ignore the fact that you're losing tens of millions of people versus pre-pandemic. The point here is just to make it clear how different is it over there versus in the U.S. where visitation levels are back and access to these properties is back here in Las Vegas and regionals.

It's not the case yet in Asia, and I think we'll benefit as that rises, spend will get better. There are retail numbers that you might look at on Page 31 as some indication is how powerful the recovery is happening even without full visitation. You can see the sales per square foot at MBS and the power of what's happening over there. So the good news is we're getting -- we're profitable, we're seeing growth.

The better news is there might be a lot more ahead of us if we can access more people into Changi, fill up more hotels around our hotel and see a full visitation return. It's not there yet.

Shaun Kelley -- Bank of America Merrill Lynch -- Analyst

Great. And maybe just as my follow-up, thinking about margins in Singapore, right, without the revenues being back online, it's been hard to analyze. But can you just talk a little bit about puts and takes there now as we get back to very recovered levels on the revenue side about some of the kind of on a stabilized basis as different segments come online because I think there was a tax change there that impacted the market and some other things. So can you just help us think about pros and cons or segments of business that could impact margins on a stabilized basis?

Rob Goldstein -- Chairman and Chief Executive Officer

Pat, do you want to take that?

Patrick Dumont -- President and Chief Operating Officer

Yes, sure. So a couple of things to think about. First off, just as you mentioned, after March 1, our gaming tax increased both by 3% in the premium and the non-premium side. So that 3% does impact margin.

Now the -- I think there are some other things going on in Singapore. There are some higher expenses, there's utility costs that have gone up, there's other costs to operate in the market that have gone up, inflation that you've seen in other markets are impacting some of the things that we buy. There's also some wage inflation because there's scarcity of labor in the marketplace in Singapore. It's a high-quality environment to work in.

It's just a high demand as their economy continues to grow for high-quality labor. So we've seen some labor increase. So there are some things that from a cost basis side are impacting our margin. But the flip side of this is we're not at full revenue yet.

So as we grow revenue and as we make investment in these higher-value suite products and as we grow some of the services that we offer to our patrons, in the long run, we'd like to believe our margins return back toward where they were before. We just need to be operating under a normal environment. So we still have some start-up, let's call it fits and starts related to some expenses. And I think our goal is to get our margins back to where they were, but it's going to take some revenue growth for us to get there.

Shaun Kelley -- Bank of America Merrill Lynch -- Analyst

Great. That is very clear. Thank you both.

Operator

Thank you. The next question is coming from Carlo Santarelli from Deutsche Bank. Carlo, your line is live.

Carlo Santarelli -- Deutsche Bank -- Analyst

Thank you. Hey, guys. Thanks for taking my question. Rob, maybe you could help here just in terms of the -- at Marina Bay Sands.

Obviously, I think VIP recovered to close to 75% of '18, '19 levels. As you think about that kind of moving forward, are clearly some channels, as you mentioned Korea, Japan, and I would assume, to some extent, Mainland China is curtailed to say the least. But when you think about like the stability of that in the current environment, does it feel as though that's a number that's kind of a new baseline thereabouts at least as we move forward?

Rob Goldstein -- Chairman and Chief Executive Officer

You mean this current quarter's results being a baseline?

Carlo Santarelli -- Deutsche Bank -- Analyst

I'm referring more to VIP rolling chip volume and kind of the stability of that segment of the market.

Rob Goldstein -- Chairman and Chief Executive Officer

I think there's room to run. I think there's room in there. I mean, look at what's happened in Singapore, let's begin with [Inaudible] in the beginning, but we're putting $1 billion in that product. I'll be very blunt about it.

It's always been a very appealing building, but it's never had the FF&E component in the suite and room product, I think, it observed. It now has that, over the next 18 months will finish. We were there and the product we're putting together is as good as any place we've ever operated. And I think that's going to be very helpful.

Two, let's be clear that Singapore is more desirable than ever as a destination. It's growing in appeal to a lot of people for a lot of reasons. We referenced the airlift. You referenced China, you're absolutely right.

China is obviously not there. But I think you add these things together, the desirability of Singapore as a destination, the rethinking of the FF&E in that building, the return of a lot more airlift than there was, hopefully, in 2019. Yes, I think that segment can run, yes, I do. I think we can -- we also have less competition in the region.

Obviously, Macao is not operating at this point. But I think this Singapore business is going to continue to grow because the region, the city state of Singapore is very desirable and more and more people are going to come to us. So you add our better building with a more desirable Singapore with airlift, the opening of China, with the opening of Japan, Korea at all. I think the cumulative impact here is every segment can grow.

I have a lot of belief that we can drive. We have to drive it because there's the clear cost side, as was referenced by Sean and Patrick in the previous call. So we will drive revenue in all segments, and we'll be very attuned to it. But I think we're in a very, very privileged position in right now of what's happened there, both of our building and with the destination itself.

Carlo Santarelli -- Deutsche Bank -- Analyst

Great. That's helpful. And then just as it pertains to the expansion, the 1,000 new rooms, I believe you guys had the construction start kind of, I guess, it was an extension on when you had to begin construction in 2Q of next year, if I'm not mistaken. Is there anything firmer that you guys have around cost and/or plans there that you'd be able to share?

Rob Goldstein -- Chairman and Chief Executive Officer

Yes. Patrick, do you want to --

Patrick Dumont -- President and Chief Operating Officer

Sure, absolutely. So Rob referenced our visit to Singapore. It was a great visit on a lot of fronts. I think we spent time in the building, and we have the opportunity to continue our dialogue around the IR2 expansion.

We're very excited to begin. I think one of the things that the pandemic did, unfortunately, was slow down that process. There's just a lot of things that have to be considered to fit it into this very complex and a very busy environment to make it sort of fit all the requirements that are necessary to get the approvals to begin. And so I think we're working on that now.

And it's something that we hope in the coming months that we'll be able to get more firm about a start date. But we're excited about it, and we're working with the government currently, and hopefully, we'll get a chance to begin soon.

Carlo Santarelli -- Deutsche Bank -- Analyst

Right. Thank you. Got it. Thanks, guys.

Operator

Thank you. And the next question is coming from Chad Beynon from Macquarie. Chad, your line is live.

Chad Beynon -- Macquarie Research -- Analyst

Hi. Good afternoon. Thanks for taking my question. I wanted to ask about M&A in this environment.

And I know that's not a normal question for you guys. But given your strong cash flow position, your balance sheet, and just compressed multiples kind of across the gaming, lodging and leisure space. How are you thinking about maybe considering some opportunistic looks across the world? Thanks.

Rob Goldstein -- Chairman and Chief Executive Officer

Patrick?

Patrick Dumont -- President and Chief Operating Officer

So I think one of the things as a company that all through the pandemic and part of the pandemic, we've always focused on is how we allocate capital and how we drive the highest returns for shareholders. And you may have heard in the past, say, that our highest and best use of capital to do new development from the ground up. And that's really what we're focused on. If you look at the history of the company and success and the way it's delivered outside shareholder returns, is exploiting a strategy of building large-scale integrated resorts in new jurisdictions.

And that's what we're focused on. And so for us, I think we have opportunities unique to who we are. We have a long track record with Rob in his decades of experience and the rest of the team's decades of experience in developing these resorts. And so we're going to look to do that before we look to buy anything.

I don't think the idea is that we would never look at something. I think we're always interested. I think we're interested in seeing if there's a way to create greater returns for our shareholders. But as a practical matter, we're not an M&A-driven business.

And I think for us, our priorities are going to be look for new markets, develop, build and scale and invest over the long term to create sustainable and durable returns. And that's really what we're going to look to do. So I understand that there's variability, particularly in the digital side, there's a lot of things that have valuations now that made people see them as compelling for the long term. There's perhaps some land-based opportunities that may come up over time.

But as a practical matter, like everyone else, we'll look at it, see if it makes any sense for us, but we're really going to be focused on route of development. That's who we are.

Chad Beynon -- Macquarie Research -- Analyst

Thank you. And then on MBS, again, just on margins. You kind of touched about some of the different pieces of that. Has the promotional environment between you and your competitor in the market changed versus pre-pandemic? Or does it feel as rational as it was at that time? And do you expect anything to change from a promotional environment once Macau opens back up? Thanks.

Rob Goldstein -- Chairman and Chief Executive Officer

We've always been lucky that, that environment is not promotion driven. I don't think it will be in the future either. And I have to wait and see what happens in Macao, but my sense is Macao, when opens, will not be a challenge either. There'll be plenty of demand.

And usually, promotional activities get out of control in this lack of revenue. I don't think it be a lack of revenue in Macao or Singapore. So I feel pretty good about it.

Chad Beynon -- Macquarie Research -- Analyst

Appreciate it. Thank you.

Patrick Dumont -- President and Chief Operating Officer

Thanks, Chad.

Operator

Thank you. And the next question is coming from Brandt Montour from Barclays. Brandt, your line is live.

Brandt Montour -- Barclays -- Analyst

Hey, everyone. Thanks for taking the questions. First one was on Singapore, a follow-up on that last question, but more just for the Singapore market, specifically. And we've heard a bunch of chatter out there in terms of potential interest in your main competitor in the Singapore market.

Is there any scenario in which a different operator would come in and take that over and that would change the way you look at that competitive landscape?

Rob Goldstein -- Chairman and Chief Executive Officer

We don't have any opinion on that. That's up to the government to make that decision, but it's a duopoly market, and I don't see it having an impact either way.

Patrick Dumont -- President and Chief Operating Officer

Yes. I think one thing that's important to note is that we view Marina Bay Sands as the best building in the world. And in our mind, it's an unbelievable opportunity to continue to invest and operate the building and grow it over time. So I don't think we view it any differently.

We think the market opportunity in Singapore is absolutely unique, and we're very committed to long-term investment there. So for us, I'm not sure it matters who operates it, that's up to the Singapore government and to the owners of that business. But for us, we're just focused on continuing to develop our property and grow the market as best we can.

Rob Goldstein -- Chairman and Chief Executive Officer

The one thing I would say about Singapore, we said it before but just reiterate is that, that place has evolved to even better than it was when we started years ago, and it keeps getting better. And you look at Changi running at such a still 40%, 50% capacity, look at the desirability of that market, the things we're doing, I'm sure Genting is as well to improve the product. It just feels like that market has a lot of room to run and to grow for us and for our competitor. The offerings get better.

Our Phase 2 will be even stronger. So to me, that's a market just beginning to feel its muscle.

Brandt Montour -- Barclays -- Analyst

OK. Great. That's helpful. And then just as a follow-up on that, as we sort of think about how to think about the constraints for how fast that MBS property can recover.

The Singapore Tourism board recently put out a number for 2022 international visitation that -- something along the line well 4 million to 6 million for '22. That it doesn't seem like that would incorporate a ton of ramp from here. And I know that's not necessarily exactly what you guys would see. But does that make it seem like the Changi airlift is for the rest of the year is baked into the cake now? Or is there -- can that be flexed up, do you think?

Rob Goldstein -- Chairman and Chief Executive Officer

I'm not going to speak for the government and what the numbers say. I think the capacity opportunity speaks for itself. I think it's more dependent not on Singapore, but on the airlines themselves and the other countries wanting to reengage and to open. I think the airport can obviously have the capacity.

I'd be surprised if Singapore wouldn't welcome more access, more flights. It's a question of getting the requisite employees in these airlines to get the lift going and open up these countries in a major way. I think it's hard to forecast. We're in a world of change, every day is different.

And I'd like to think there's a lot more opportunity than that, but remains to be seen if the governments want to engage and if the airlines can get the employees make it happen. I think demand -- underlying demand is absolutely there, just getting the ability to get there.

Operator

Thank you. And the next question is coming from Robin Farley from UBS. Robin, your line is live.

Robin Farley -- UBS -- Analyst

Great. Just a quick one on -- I don't know if I missed in your introductory comments, any comments on what you've talked about in the past related to online gaming and sports betting and kind of looking at B2B investments. I didn't catch if you had an update there. Thanks.

Rob Goldstein -- Chairman and Chief Executive Officer

We didn't have an update. We didn't mention it. We're focused right now on what's happening. We remain committed to our digital investments and looking at that market.

But right now, the story for us is this land-based recovery, which we're filling in Singapore. And we made some major strides in this company in terms of liquidity, the reopening of Singapore, and we think the upside potential in Singapore, the licensing process and how we're focused on that. And of course, most importantly, the return to a normalized operating environment in Macau is paramount. We've just been so busy with that.

The focus wasn't on digitally right now. We continue to look at that opportunity. We continue to invest. We made two investments, as you know, in the past.

So just simply we're focused right now on land based.

Robin Farley -- UBS -- Analyst

OK. Great. And then also, has there been a change in what you expect for timing and spend in a potential New York project since last quarter?

Rob Goldstein -- Chairman and Chief Executive Officer

I'm sorry, I missed you about New York.

Grant Chum -- Chief Operating Officer

Timing and spend?

Rob Goldstein -- Chairman and Chief Executive Officer

No, I think we remain a believer in that market, and the process is taking longer than I thought it would. But hopefully, it will come to -- hopefully, this year or early next, we'll know what's happening there. Now, still the density of population and the ethnicity and the access in New York makes it very appealing and lack of capacity still remains a premier market in my mind, if we can get there. A lot of competition, we're one of many in the hunt there.

So nothing new to report. We have a plan in place. We're executing to it. Let's wait for the RFP to unfold.

So we have nothing new in New York.

Robin Farley -- UBS -- Analyst

OK. Great. Thank you.

Grant Chum -- Chief Operating Officer

Thanks, Robin.

Operator

Thank you. And the next question is coming from Steve Wieczynski from Stifel. Steve, your line is live.

Steve Wieczynski -- Stifel Financial Corp. -- Analyst

So this will probably be for Grant and it's probably going to be a difficult question to even answer. But Grant, I guess for us, non-Chinese citizens, it's extremely tough for us to understand where China is with respect to the reopening process. But I don't know if you can help us understand maybe what you're hearing around the zero-COVID policy, which I mean, I think the rest of the world probably fully knows at this point is never really going to work. And if some of these harsher stances toward the virus could start to get relaxed before, maybe is there a time frame you guys are watching? Or is there anything you've heard maybe is it the October election, I guess.

Anything around that would be very, very helpful. Thanks.

Grant Chum -- Chief Operating Officer

Yes. Thanks for the question. I think as you alluded to, there's not much that we can help with in terms of any speculation on timelines or changes. I think what we are focused on is what's happening in Macau.

So I think the things that we can effect is to make sure that we do help the prevailing government policy so that we can actually get Macau reopen back with Zhuhai, the neighboring city in Mainland as quickly as possible. And that means, I think, aligning ourselves fully and safely with the overall COVID policy. And that's what's happening right now. And so hopefully, over the coming weeks, we will be progressively reopening all of the facilities that we've had to close in the past week.

That's what we're really focused on. And it's really not our place to speculate on future changes on the overall health policy. I don't know if Wilfred has more to add on that.

Wilfred Wong -- President, Sands China

No, I think, Grant, you're right. At this stage, I think the whole country is also employed in this COVID situation. And obviously, policies will evolve. And we in Macau trying our best to support the local government in order that Macau can return to normalcy.

Steve Wieczynski -- Stifel Financial Corp. -- Analyst

OK. Great. And then, Rob, obviously, there's been some bet some movement with regards to the new Macao gaming laws, regulations, whatever way you want to think about it, which actually seemed pretty favorable, but wondering how you guys are viewing those regulation changes and maybe any of the pros or cons that you see emerging from those?

Rob Goldstein -- Chairman and Chief Executive Officer

Well, we're grateful for the clarity from the government. I think the process is moving very well. And I think a lot of the concerns some people have, have been eliminated. So we're just going to process and hoping to complete this thing in due course.

But obviously, we're all pleased. I think all the operators are pleased how this is playing out, and we're hoping for a positive conclusion. I think a lot of their fears have been erased. Grant or Wilfred are going to comment, that's as far as I can take it.

Grant Chum -- Chief Operating Officer

I think that's right, Rob.

Wilfred Wong -- President, Sands China

Yes. absolutely. Grant, go ahead.

Grant Chum -- Chief Operating Officer

I'm just going to add that, obviously, we're very appreciative that during this difficult time on the COVID front that the government and the legislature were able to move forward to complete the passing of the revised gaming law in -- toward the end of June and that we were able to also execute the six-month extension. That takes us to the end of this year. So I think the whole process is moving forward expeditiously. And as Rob said, we look forward to participating in the tendering process.

Rob Goldstein -- Chairman and Chief Executive Officer

Steve, one thing I would say, our company, as you know, has been through, it's been an awfully difficult couple of years more than most because we're Asia-focused. But we've now completed -- the Sands in Las Vegas gives us more than ample liquidity no matter what happens. Singapore is up and making money, and there's more to come. It's a very -- we're very grateful for what's happening in Singapore.

We see a lot better days ahead. The Macao licensing process is the same way. It feels like we've survived as a lot of people are concerned. But in the end, it's worked out for everybody in a positive manner, thus far.

I hope that continues. And we're just waiting for the thing you referenced initially, which is when does Macao, when does the government rethink the zero-COVID or how does that play out? We don't know. Don't pretend to know, but that's the last thing we're waiting for to get our company back to a much better place. But three of the four have been achieved.

So we'll continue to press on with the license and wait patiently for the government to advise us on the reopening of Macao.

Steve Wieczynski -- Stifel Financial Corp. -- Analyst

OK. Great. Thanks, Rob. I appreciate it.

Operator

Thank you. The next question is coming from David Katz from Jefferies. David, your line is live.

David Katz -- Jefferies -- Analyst

Hi. Good afternoon. Thanks for taking my questions. Number one, I wanted to ask about just the physical plant in Macao.

And recalling that those are -- have a significant number of private rooms that were historically used for VIP. How do we think about kind of that spatial layout and planning going forward? And then I have a follow-up in another direction.

Rob Goldstein -- Chairman and Chief Executive Officer

Grant, do you want to take that because I have my own views, but I think you should --

Grant Chum -- Chief Operating Officer

Sure. I think we've been watching as the market has been evolving and also planning for the future. I think a lot of the salons and certainly, that applies to the new salons that we've developed as part of the Grand Suites or Four Seasons and the London and Macao projects. I think, they're really premium salons, premium gaming salons that could be applicable and used by the different segments, whether that's the VIP rolling or the premium mass.

So clearly, I think Macao overall may be relooking at how they each operator redeploys the assets. But as far as we're concerned, especially the new products that we've developed over the past two years, we feel pretty positive about redeploying a lot of those gaming spaces for the premium mass segment. But also over time, as we look toward the future, also the premium direct segment and attracting the overseas markets in the rest of Asia into those products. So we've been currently going through a planning exercise on the future deployment of those areas.

But as the market evolves and as things normalize, we'll be able to get more definition around that. But even as of the past 12 months, we've been redeploying some of those rooms that were assigned to the rolling segment to the non-rolling segments.

Rob Goldstein -- Chairman and Chief Executive Officer

David, no one ever thought additional gaming space in Macao is a bad thing. As we focus more on base mass and premium mass, I think it actually expands our ability to make more money. The junket business, we always know is a margin-challenge business. I feel grateful we have all this new space coming back to us that we can redeploy and what is still going to be the world's biggest gaming market for land based, and we'll have the biggest footprint.

So as this -- as we -- as Grant and Wilfred and the team rethink that space, I think it adds all kinds of premium opportunities for base mass, premium mass and direct premium as well. So to me, it's a very valuable transition to a higher focused margin business that enables us to -- again, Singapore -- I mean Macao, the penetration in China is still, I think, sub-3% for the China population. It's going to be a growth market. Capacity will be an issue down the road because there are new casinos opening.

So I think that space may prove to be very valuable as we get back to work in Macao, hopefully this year or next. But I think we're lucky to have all that extra space we can redeploy a more profitable way down the road. So happy to have it back.

David Katz -- Jefferies -- Analyst

Understood. And as my follow-up, you've done, obviously, the Singapore MBS did a lot better than what we had. But just looking at the ADR of, I think, $330. And I'm not sure that you covered this directly so far.

When we look back to 2019, it was -- there's still some headroom there. It was about $90 ADR higher. How do you sort of see that evolving as we roll forward?

Rob Goldstein -- Chairman and Chief Executive Officer

Pat, do you want to take that?

Patrick Dumont -- President and Chief Operating Officer

Yes, sure, happy to. I think some of it has to do with sort of start up across the quarter. I think one of the other things to note is that it's not fully recovered and with all the different segments because there is sort of not as much FIT and MICE demand as we had across 2019. So you're going to see some ADR spread from that.

But I think the most important thing to note is we're making, as Rob referenced, $1 billion investment in our product there. Over time, our ADR will be higher. So across the next six quarters, and let's sort of focus on at the end of '23 in time for Chinese New Year of '24, we're going to have 400 new suites that we never had before. And they're the highest-quality suites we've ever done as a company and we're going to drive different ADR.

So while we're out a couple of hundred suites now with that rooms out of inventory, we've got a lot of things going on through the building, start-up period, I wouldn't look at this as ADR as representative. And so over the next couple of quarters as we have rooms out of inventory, it's going to -- there's going to be some choppiness. But by the time we're done getting into '23 and getting across '23 when the project is completed, then you'll have a good look at what ADR can really be under the value of the full investment, which is substantial. It's basically a complete redo of Towers 1, Towers 2 and some of the common spaces and amenity spaces that we have.

It's going to be a fundamentally different experience for our guests, and we hope and believe very strongly they'll pay a lot more for it because it will attract a higher-value tourists, and that's really our goal.

Rob Goldstein -- Chairman and Chief Executive Officer

Our biggest problem today [Inaudible] MBS is as that Changi recovery continues and [Inaudible] come back as our game, our biggest problem won't be ADR. It is going to be putting -- have enough rooms to accommodate all the demand. ADR will climb, either the casino direct or through cash customers or to convention. There'll be no problem getting back.

That's not the issue. The issue has always been we're capacity constrained at MBS, we need more sleeping rooms and we'll get the ADR. That market, the recovery you're seeing here is in its infancy, just beginning and be assured that we can get the ADR back to pre-COVID levels and above. In fact, I hope we can do much better with casino demand and drive the casino ADR as well.

So --

David Katz -- Jefferies -- Analyst

Perfect. Thank you so much.

Rob Goldstein -- Chairman and Chief Executive Officer

Sure. Thank you.

Patrick Dumont -- President and Chief Operating Officer

Thanks, Dave.

Operator

Thank you. And the last question is coming from Dan Politzer from Wells Fargo. Dan your line is live.

Dan Politzer -- Wells Fargo Securities -- Analyst

Hey. Thanks for taking my questions. So given the momentum you're seeing in Singapore and the recovery is still in its infancy, how do you think about the long-term path to getting back to pre-COVID, the $1.7 billion of EBITDA in the event China doesn't open? Do you need China to reopen to kind of get back or get close to that level or given what you're seeing now, do you have a line of sight to getting near there in the absence of China reopening.

Rob Goldstein -- Chairman and Chief Executive Officer

It's a good question. And we're watching like you all. I think let's not ever dismiss the importance of China in any of our businesses. China is still a powerhouse as a consumer market, and we should never dismiss it as powerful.

Can we get to $400 million a quarter without China, most of you would think not. But then again, I would have thought we wouldn't have on this well with Changi still having underperforming in terms of visitation. So it depends -- like the U.S., I think you have to question what -- where will the over-indexing come from? Well, Indonesia, Malaysia and other source markets over-indexed. And that's the question, we don't know the answer to that.

Will there be pent-up demand coming out of Thailand and Vietnam and Indonesia and could they -- could Korea outperform? I just don't know. We have to wait and see how those markets open up again. We're in uncharted waters here, it's new. But I would never dismiss the importance of China as a market for anybody in our retail business, our hotel business, our casino business.

China is very, very critical to everybody in Asia. And you can see that in any market that you participate in. But how high is up without China returning, I think we'll have to wait and see it together. There's a lot of good drivers here that make us feel good, the visitation makes us so there's opportunity there.

Our renovation feels like it's going to be very impactful as it comes online, the over-indexing of non-China markets feels like it's coming on strong. But I think we'll revisit that and we'll have a better answer for you next quarter when we print our numbers.

Dan Politzer -- Wells Fargo Securities -- Analyst

Got it. And then just as a follow-up. I know COVID cases in Singapore actually have been rising lately. Given your experience working with the government and your perception, I guess, and stance of living with COVID, and the stage of reopening we're in, do you see any risk with additional restrictions coming back or being put in place?

Rob Goldstein -- Chairman and Chief Executive Officer

Patrick, want to grab that.

Patrick Dumont -- President and Chief Operating Officer

Yes, sure, happy to. I think at this point, all we can do is be optimistic about the public health posture that Singapore has shown, they've shown a lot of leadership. They have a significant history of investment in their hospital system and their public health infrastructure, and I think they're proceeding as they've said. I think they broadcast it all along and they follow what they've laid out.

So as we sit here right now, I think they're moving in the way they said they're going to do, which is continue to have visitation, continue to be involved in the growth in their economy and move forward with this is an endemic situation. But we don't know. And I think this is something where we've obviously shown flexibility to respond as needed to support the government and their initiatives. But at this time, it seems like we're heading in the right direction.

But could that change in the future? We don't know.

Dan Politzer -- Wells Fargo Securities -- Analyst

Alright. Thank you.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Daniel Briggs -- Senior Vice President of Investor Relations

Rob Goldstein -- Chairman and Chief Executive Officer

Joe Greff -- J.P. Morgan -- Analyst

Patrick Dumont -- President and Chief Operating Officer

Grant Chum -- Chief Operating Officer

Shaun Kelley -- Bank of America Merrill Lynch -- Analyst

Carlo Santarelli -- Deutsche Bank -- Analyst

Chad Beynon -- Macquarie Research -- Analyst

Brandt Montour -- Barclays -- Analyst

Robin Farley -- UBS -- Analyst

Steve Wieczynski -- Stifel Financial Corp. -- Analyst

Wilfred Wong -- President, Sands China

David Katz -- Jefferies -- Analyst

Dan Politzer -- Wells Fargo Securities -- Analyst

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