Nevada headquartered Las Vegas Sands has scrapped plans to develop an integrated resort in Japan to focus energy on other opportunities.
Maintaining a belief that business and leisure tourism industries will benefit from the construction of IR’s, the company asserts that the framework around the development “has made our goals there unreachable”.
LVS had set its sights on securing Yokohama licence approval last year as it strived to emulate its Singapore-based Marina Bay Sands property, however, the company remains confident in the potential prospects of other Asian countries as further regions aim for economic growth.
The decision to withdraw from the IR race follows caution and concern expressed last year as Robert Goldstein, president and COO of LVS, commented on potential moves in the country.
“We’re working through those issues right now, I think US$10bn is the starting point. I don’t think anybody’s going to do it for less than US$10bn, unless you’re going to do something sub-par,” Goldstein said.
“We’re going to be in a top tier city which would mandate US$10bn – and that may be light. I mean, the cost of building in Japan is a big issue and the way the deals are structured, it’s a challenge.
“We’re used to writing big checks, but all that money on one IR does make you stop and pinch yourself and say ‘can get the returns that your shareholders deserve?’”
Sheldon Adelson, LVS chairman and CEO, explained the company’s decision to discontinue its IR pursuit: “My fondness for the Japanese culture and admiration for the country’s strength as a tourism destination goes back more than 30 years to the days when I was operating COMDEX shows in Japan and I’ve always wanted our company to have a development opportunity there.
“And while my positive feelings for Japan are undiminished, and I believe the country would benefit from the business and leisure tourism generated by an integrated resort, the framework around the development of an IR has made our goals there unreachable.
“We are grateful for all of the friendships we have formed and the strong relationships we have in Japan, but it is time for our company to focus our energy on other opportunities.
“I remain extremely bullish about the future of our company and its growth prospects. We operate best-in-class properties in the leading markets in our industry and we are currently executing significant investment programs in both Macao and Singapore to create meaningful new growth from our existing portfolio.
“We also believe the success of the MICE-based Integrated Resort model we pioneered in Las Vegas, Macao and Singapore will ultimately be considered by other Asian countries, particularly as governments look to increase leisure and business tourism as a driver of economic growth.”