Beijing's Austerity Drive Not a Worry: Sands China CEO
Chinese President Xi Jinping's austerity drive hasn't put a dampener on business at Sands China, said Edward Tracy, president and CEO of Macau's largest operator of casinos and resorts.
"We weren't surprised to hear that kind of articulation [on austerity] early on in the new regime. It doesn't appear to have had any effect on our gross revenue or our visitation," Tracy told CNBC on Wednesday.
Sands China, which is a subsidiary of Las Vegas Sands, was among the better performers on the Hong Kong Stock Exchange in the first quarter - rising more than 18 percent over the January to March period. The company's profit jumped 52 percent in the fourth quarter boosted by an increase in visitors to its newest property in the territory - Sands Cotai Central.
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The new leadership's drive to tackle conspicuous consumption especially among government officials fueled concerns earlier this year that gaming revenues in Macau, the world's biggest gambling destination, would come under some pressure. But gambling revenues in the Chinese enclave have held up well - hitting a record monthly high of $3.92 billion in March - a 25 percent increase from the same period a year earlier.
Discussing the Sands China's strategy in Macau, he said that the company is focusing on the fast growing mass market segment. "Lower denomination players still need to be serviced, and while other operators continually optimize live games, we're trying to find a way to service customers who are unfamiliar with live games and prefer to be at electronic games," he said.
Finally, addressing worries over the impact of the bird flu outbreak in the mainland on the gaming industry, Tracy said he doesn't believe there is a need to panic at the moment.
"We are taking precautions as is the Macau government...but we're fairly certain that the governments have a handle on food handling and health, those kinds of issues," he said.