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Las Vegas Sands Corp (LVS) Q4 2018 Earnings Conference Call Transcript

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Las Vegas Sands Corp (NYSE: LVS)
Q4 2018 Earnings Conference Call
Jan. 23, 2019, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon. My name is Angelica and I will be your conference operator today. At this time, I would like to welcome everyone to the Las Vegas Sands Fourth Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

I will now turn the call over to Mr. Daniel Briggs. Mr. Briggs, you may begin the conference.

Daniel Briggs -- Senior Vice President, Investor Relations

Thank you. Joining me on the call today, are 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 Rob, 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. Please note that we have posted supplementary earning 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 question and answer session, we ask that you please respect our request to limit yourself to one question and one follow-up question, so we might allow everyone an opportunity to participate. Please note that this presentation is being recorded.

With that, let me please turn the call over to Rob.

Robert Goldstein -- President and Chief Operating Officer

Thanks Dan. Good afternoon everyone and thank you for joining us today. Sheldon is not joining us on the call today, he is little bit under the weather. We met with him yesterday, he is taking some medications, making him a bit drowsy, so we decided this morning to take a rain check on this one. He looks forward to speaking with all of you on the upcoming calls. He did however have a message for everyone, that's great quarter, yay buybacks and yay dividends. Now let's go to our financial results.

We had a very good quarter, in Macao our adjusted EBITDA was $786 million, we achieved record mass revenues, we increased our market share of revenue, a important market. Our growth in Macao is coming from every gaming and non-gaming segment. Margins in every segment in Macao are stable or growing during the quarter, with the exception of a rolling premium direct business where our low hold negatively impact our EBITDA. The strong top line growth in our rolling business of 34.6% of (ph) the quarter will positively contribute to our bottom line as hold-normalized in that segment.

In 2018, our Macao operations delivered an adjusted property EBITDA of over $3 billion, an 18% increase over 2017. Overall, Macao market shows strength in 2018, growing GGR by 14% year-on-year, our Macao properties generated 17% growth in GGR over that same period. It is clear that Macao market is evolving and Sheldon's vision more than a decade ago to create the critical mass of our hotel, retail, entertainment and MICE offerings positions us perfectly for future growth.

The opening of the Hong Kong Zhuhai Macao bridge is the major milestone that will help Macao grow toward MICE business in the years ahead, an engineering feat of unprecedented scale and creates a direct connection between the Hong Kong Airport, one of the most -- one of the largest and most important transportation hubs in all of Asia and Macao.

We couldn't be more excited about our planned $2.2 billion investment in the -- in our critical mass and hotel room, retail entertainment offerings in Macao. Before depicting the benefit and the growing infrastructure in Macao, that will continue to increase leisure and business tourism destination from China.

Looking ahead, we believe this was no better market in the world than Macao with regards to continued deployment of our capital. Looking forward to making additional investments to Macao as we contribute to Macao's diversification and evolution into Asia's leading leisure and business tourism destination.

Let's turn to Singapore. We enjoyed a very strong cash flow, however VIP Volumes and hold were lower this year. We still main capacity constraint in Marina Bay Sands and hope to have the opportunity in the future to make additional investments in Singapore, and that's a very strong market which simply run on rooms and gaming capacity there.

Las Vegas also had good quarter led by strong convention exhibition business. Before to adding additional incremental entertainment offerings in Las Vegas and the positive impact of the MSG Sphere at the niche which is under construction and supposed to open in 2021. Finally, we turn to the increase of capital to shareholders. We raised the annual dividend to the 2019 calendar year. We repurchased $430 million of stock during the quarter. We see meaningful long-term value in the LVS and SCL equity.

We thank you for joining us on the call. Let's now take the questions. Operator?

Operator

Yes, sir.

Daniel Briggs -- Senior Vice President, Investor Relations

Let's begin the Q&A session. Thanks so much.

Questions and Answers:

Operator

You're welcome. (Operator Instructions)

Patrick Dumont -- Executive Vice President and Chief Financial Officer

No questions?

Operator

We do have a question from Mr. David Katz of Jefferies.

Patrick Dumont -- Executive Vice President and Chief Financial Officer

Okay. David...

Operator

Sir, your line is now open.

David Katz -- Jefferies -- Analyst

Hi, afternoon. And its a nice quarter. I wanted to just touch on Singapore if I may, which candidly came in a bit below what we were forecasting. If you could just talk about the different forces on the plus and minus side, I heard your commentary about it being capacity constraint, but just, talk about the quarter a little bit and what's -- what went well and what's may be challenging or creating opportunities?

Robert Goldstein -- President and Chief Operating Officer

Sure. First, let's begin by recognizing this as an iconic destination that's made an awful lot of money for his Company, where we're very proud of the -- is the definition of an IR, is exemplary in every way. It's biggest challenge dated by far is its capacity constraint both from the lodging. From a gaming perspective we just don't have enough slot machines, ETGs, rooms. We have demand, we don't have the supply. We also like to see more entertainment in the region in Singapore to drive more premium mass play.

We've alluded to in the past to continue reference the frustration, because the money moving into Singapore it's very difficult. Our growing business there has been limited for a number of years now. The growth that remains -- in primarily foreign tourism into the market for the premium mass segment. And again, we just can't create more rooms right now and more gaming during the weekends. So that's the frustration.

We played a little bit unlucky here and there in every quarter (inaudible) but the margins remain strong. And the primary difficulty in our market is capacity constraint. Very proud of the asset, looking for a chance to invest more in Singapore and grow more lodging in gaming perhaps in the future, but that's the long and short of it. I could -- I can't tell you how frustrating is that, such a wonderful asset that could grow, but right now is not able to.

David Katz -- Jefferies -- Analyst

Thank you. And my one follow up is Macao related if I may. For sure we would all likely agree that the long-term outlook there for that market is quite positive. But just thinking about, say, the remainder of the year and what we would call, we don't want to ask about a quarter but we can ask about -- recall the medium term. There are certainly a lot of inputs that we're trying to process whether those are macroeconomic or company specific et cetera. Help us think through what the rest of the year looks like or what inputs we should be contemplating as we model for the rest of the year for LVS in Macao, specifically?

Robert Goldstein -- President and Chief Operating Officer

Yeah, I think the best way to look forward, Macao has look backward. 2017, as you guys go back to 2016, we were hovering around $2.3 billion or $2.4 billion of EBITDA. I think Wynn was opening, we were hoping Parisian as the Studio City probably opened up, MGM was the horizon. A lot of people thought Macao has seen its best days and we will be share givers and the market would just dissolve and switch competition. We fast forward we've now grown to $3 billion EBITDA few years later. We've been share takers in virtually every segment, in fact in every segment. It's a very simple market to understand, it's a mass, premium mass market driven by scale. The IT segment will continue to be challenging I believe. The mass and premium mass will be the driver. I was there last week, walked all the gaming floors, drove the bridge back and forth to Hong Kong, it's an extraordinary place and it's an extraordinary market, they're just starting to touch its potential.

To think about this for a week or for a month or for this issue, that issue we'll probably drive you crazy, but if you think about it in the big picture, we've grew our EBITDA back to almost the highest level ever despite a huge decline in VIP since 2014. I think we've done there, which has build scale. We're building more rooms today, we're building more retail today, we're building more everything today, we believe that market will continue to grow. I think the best way to look at our enthusiasm and our focus is our activities.

We're under way with Londoner, the St. Regis, the Four Seasons, we're strong, strong believers in Macao, and we're investing for long-term. Yes, there is always -- there is a smoking issue today or a blip in the economy. There is always something to worry about, we get that. But look at this magnificent market over the last three years what's done, it's absorbed all kinds of capacity and still grown.

We're just very bullish and we're blinded by the extreme size of Macao and toward the market today, but more important tomorrow. And look at the rest of the rim, look what the bridge has done, the bridge is a game changer, it's a magnificent achievement that access all of China. All the airports in China can now land at Hong Kong and get to Macao in a car. The boat is not necessary, if you want to take a boat, you can, even from the Central Hong Kong, it's almost as quick just to take the car to the new bridge.

The new bridges is incredibly achieved, it also opens up the rim. So we're long term thinkers, we're long term believers. We don't think there is a market like it in the world anywhere, a better place to deploy capital, we're fervent believers on license in 2000 -- whatever it is 2021, 2022. So I think you best from our perspective look at this as mass scale market, that's room dependent, those without rooms will have a difficult time rolling their share.

Mass demands rooms, non-Guangdong visitation demands rooms. This is a very special place, it's very unique and we are delighted to be there and investing today. And so that's the best answer I can give you. If you worry about this Tuesday or next Friday, you'll probably have some sleepless nights. If you think you have a long-term, you'll sleep very well and be very well rewarded.

Patrick Dumont -- Executive Vice President and Chief Financial Officer

You know there is been a lot of commentary about the upcoming year and I think one thing you should look at and we spend a lot of time on this in the earnings deck trying to display it to different ways. The infrastructure investment to Rob's point going into the area that allows for the bridge to be effective and allows for tourists from deeper into Mainland China to actually access Macao and access the growing tourism infrastructure that's there, it's only improving. And if you look, we have Page 15, in the slide deck, that shows the amount of growing visitation from China into Macao. And you'll notice that the rate of growth is accelerating. And so if you think about the upcoming year and the upcoming several years. What you will see is that the infrastructure improvements will allow tourists to take advantage of Macao and grow the mass business, right, and grow this very solid high-margin mass business as they look to use the non-gaming amenities that our Chairman designed a decade ago. And when you think about that amazing press vision, where he laid out a plan for this non-gaming amenity system, that really creates this tourism driver and that really speaks directly to the mass business. So if you look at the infrastructure improvements again it's in the earnings deck, you can go through those slides.

We view the mass business as a very strong catalyst for growth of the Company for this year and for the years to come. And there is been indication of that in the past, and we see a very bright future for that segment because of the infrastructure, because of the nature of the business and because of the tourism desirability of the assets that we and others had built in the cap.

Robert Goldstein -- President and Chief Operating Officer

On the ironies of the market, it's -- for me is that, a couple of years ago, I was concerned too many rooms being built and today everyone wants more rooms desperately. And the fact is, it runs at incredible occupancy, demand is there, demands are keep growing.

David Katz -- Jefferies -- Analyst

Got it. Thank you for your answers.

Robert Goldstein -- President and Chief Operating Officer

Thank you.

Operator

Our next question comes from the line of Mr. Thomas Allen from Morgan Stanley.

Daniel Briggs -- Senior Vice President, Investor Relations

Hey, Tom.

Thomas Allen -- Morgan Stanley. -- Analyst

Good afternoon.

Robert Goldstein -- President and Chief Operating Officer

Hey, how's it going?

Thomas Allen -- Morgan Stanley. -- Analyst

So just quick numbers question. You said in Macao, you're rolling direct business, had low hold on that impacted EBITDA. Can you quantify that?

Patrick Dumont -- Executive Vice President and Chief Financial Officer

No, we're not going to address it specifically. I don't -- I think we've put out enough information about the business to throw a number out there, we just add to the clutter. I think from our standpoint, and Rob will address this further. We have a different margin structure within the premium direct and chunk of businesses. And sometimes based on the nature of the hold and the difference in hold between those two businesses, our normalization on an aggregate basis doesn't need to happen, but it actually needs to happen on an individual basis. We had this happen a couple quarters ago. And so, from a margin basis because the nature of that structure, it impacts the aggregate margins of the business. That being said, our mass margins are as strong as ever, right.

And so I think when you look at the structure of the business, the cost structure of the business, the cost control that we've put in place, our ability to get some operating leverage of business that will continue. I think in this particular instance because of the adjusted methodology and the overall aggregate amount of rolling volume that we've had, you see some margin change because of that mix.

Robert Goldstein -- President and Chief Operating Officer

Thomas, we held within normal range across the rolling segment for the quarter, for the Company in the portfolio. But the mix was not in our favor, as you know we have a very strong rolling direct business which held under the expected range. And this segment is much more stable in terms of margin to us. We did hold above the range for the rolling junket business, but conversely we had a much lower margin in that segment.

So in summary, we definitely left some money in the table this quarter, significant dollars, because we didn't hold within the range for the direct business. It's a shame, it wasn't (ph) in the flip side, it would have been quite a quarter, but it wasn't. The volumes are there, we keep taking share, we keep growing our rolling business. People for years -- well equipped to compete in that segment. We just keep growing share, it's really sad because it would been an amazing quarter, had we held up, it didn't. But I think -- again our focus can't be on the rolling and pointed to a lot has to be on the mass side and that's where you sell and grow, and I think that's where the story resides for us. A quarter here, a quarter there, point of luck to point it to a luck isn't going to influence. It's the long-term -- it's about the right assets for the mass -- premium mass and the growth there is extraordinary.

Thomas Allen -- Morgan Stanley. -- Analyst

So that's perfect segue. And my next question, so Page 14, on base mass versus the premium mass performance. Obviously looking on year-over-year it looks like base masses is outperforming premium mass, but I think quarter-over-quarter you saw some weakness in premium mass in the third quarter, and then that bounce back in the fourth, can you just talk about -- kind of underlying trends for those two markets, which one do you think is going to be stronger in the future? Thank you.

Robert Goldstein -- President and Chief Operating Officer

Well, that's a good question, I wish I knew the answer to that, but I'll tell you both look awfully good. We are a very strong fourth quarter, we achieved record non-rolling drop in Wynn. 13% growth in premium mass Q-on-Q, despite a lot of new competition. I was in the New Morpheus last week which is a quite a property, impressive hotel. Macao by the way just gets to be more and more impressive when you go back to world class product. We're looking forward to showing our new Four Seasons product which is going to be pretty special. We don't know exactly what the market grew at in Q4 -- until all the operators have reported, but we can say, we outgrew the market in ongoing tables in the first nine months of 2018. We outgrew the market in full year 2017, so our outperformance in premium mass and mass is not about one quarter, our outperformance has been achieved consistently, cumulatively for the past seven, eight quarters and we've achieved this despite having the biggest base of business and despite the very intense and very good quality of competition on Cotai.

We couldn't be happy about our position in the market but we don't stand still. We intend to get better because of the competition of this is just too damn good. And the market opportunity is just too damn big, and that's why we look forward to executing -- completing on The Londoner, the St. Regis, the Four Seasons. Our position has been simple for over a decade. We believe in the mass and premium mass, our assets, our arena, our retail, our margin, our gaming is positioned to put us at the top of the heap and grow to $6 billion, $7 billion, $8 billion.

We believe mass is up $30 billion business. I'm not capable of telling you what the breakout, is it premium versus base? We'll take it all, and we have the assets to take it all. And I think those who don't have rooms, those who talk about buildings rooms are going to struggle. Those who have rooms, especially great rooms like we're building are going to grow. And so I think this quarter we're few points below the growth, maybe, but in the aggregate our numbers are pretty exemplary and we're delighted where we're heading.

Thomas Allen -- Morgan Stanley. -- Analyst

Helpful. Thank you.

Robert Goldstein -- President and Chief Operating Officer

Thank you.

Operator

The next question comes from the line of Mr. Stephen Grambling from Goldman Sachs. Your line is now open sir.

Stephen Grambling -- Goldman, Sachs & Co. -- Analyst

Thanks. Good afternoon. I guess as a follow up to the first couple of questions on Macao. On slide 19 you highlighted additional investment in VIP in 2019, as you seek to grow fast in the market. I guess, how do you think about that segment longer-term? And I get the math component but just thinking about drivers there and how you want to position?

Robert Goldstein -- President and Chief Operating Officer

Well, you know it's a more challenged market and it's obvious you can read all the informations out there. There is been crackdowns recently -- there is all kinds of issues in the VIP, but -- and I think we're more confident of the sustainable growth of the premium mass -- mass short-term. But I wouldn't rule out VIP, this is proving very resilient over the years. We've already -- I've made the mistake of counting out a couple of times, that's been wrong, that market is going to bounce back.

Again the penetration in Mainland hasn't complete yet, this airport, I mean having driven to the bridge last week and going to the airport, it's just going to change the game for Macao. So the physical asset to drive more high-end not just in China but throughout the Pacific Rim, Macao is there. Macao is the world class facility of Asia. There is just nothing like it and honestly there is nothing, there never will be no place like it. It's just too good, too far ahead of the competition.

And so I think whatever VIP business is in Asia, we'll continue to mostly go to Macao. We will participate, we've dedicate ourselves to better rooms, better suites, better gaming operations, better relationships, as evidenced on our numbers. I would not be comfortable however if you are solely dedicated to VIP or the majority of your income comes from VIP. I think you need diversification in the premium mass -- mass to take advantage of this great market.

We'll be there, we'll probably share takers in the near future, again this quarter. We keep growing the VIP business, but I think it's more challenging the short-term than the premium mass-mass. That's where the strength resides, short-term and long-term. But again I wouldn't count out VIP, it's prudently very resilient and again market penetration, because the Non-Guangdong numbers indicate there is a lot of potential out there in China in the Pacific Rim. If you haven't been there recently, if you've been to the bridge, the full impact and the full potential of the bridge is only realized once they open that thing up, total functionally, to let it, do all it can do it. It's a very impressive piece of work.

Stephen Grambling -- Goldman, Sachs & Co. -- Analyst

Fair enough. And then maybe an unrelated follow-up turning to the US, I guess there is lot of noise, consolidation talk in the space. I guess how do you think about M&A as part of your capital allocation framework versus reinvestment of Macao versus expansion of new markets.

Robert Goldstein -- President and Chief Operating Officer

So you know, it's interesting, there is always a lot of speculation, in particularly on our history, about the opportunity for acquisition. I think if you look at the portfolio, that Sheldon designed and built from the ground up, we believe we have the best assets in the business. And for us, we think investing in those assets are the best way to create long-term shareholder returns. And we've demonstrated that over the years, when our Chairman has a vision, it's been proven that it creates tremendous value for shareholders. And so we've invested in the properties that we have billions of dollars of additional CapEx or to keep them fresh, keep them relevant, including the (technical difficulty) opportunity to your prior question.

And in our mind, that's the best way for us to grow our business and enhance our return of capital as our cash flows grow. And for us, M&A is not really something that we would look to, unless it was unbelievably compelling. And we felt would simply augment the strategy and vision of the Chairman that we've set out on. And so from order standpoint, if you look at our balance sheet, look at the strength there, look at the way we handle return of capital, the way we enhance shareholder returns, we're very much geared toward our dividend, which is the cornerstone of our return on capital policy. We're very much geared toward, share repurchase, we bought $403 million this quarter, because we had liquidity and we were confident in our future ability to grow cash flows. And, and really, we've got $2.2 billion program in Macao. So when you look at those things, you look at the way we're allocating capital.

I think we've made pretty clear statement about how we feel about the business and about where we want opportunities to exist. We've never really bought anybody. And so, I don't see that changing unless the Chairman has a different view about the opportunities that an M&A transaction may provide. But from our standpoint, we've been very clear about our strategy, about his strategy and that's how we intend to execute.

Stephen Grambling -- Goldman, Sachs & Co. -- Analyst

Awesome, yay dividends, yay buyback.

Daniel Briggs -- Senior Vice President, Investor Relations

Thank you. Next?

Operator

Your next question comes from the line of Mr. Anil Daswani from Citi. Sir, your line is now open.

Anil Daswani -- Citigroup -- Analyst

Hi. Good morning guys.

Robert Goldstein -- President and Chief Operating Officer

Good morning, Anil.

Anil Daswani -- Citigroup -- Analyst

Thank you. I just wanted to touch based on the premium mass standout performance that you guys had in the fourth quarter. How would you attribute that? Is that driven by the bridge? Is that driven by the new suite that product, that you opened at the Parisian, is that driven by higher spending? And consequently how do you think the further improvement in infrastructure with both the opening of the LRT as well as the Shenzhen extension of the high speed rail. Are those drivers as significant as you guys have mentioned you think the bridges?

Robert Goldstein -- President and Chief Operating Officer

A couple of things there. First of all, the bridge at this point, we don't think is that impactful. It's more of a -- having driven last week it's unfortunately underutilized. There is not a private car licenses to maximize what's going to be a vast potential. It will be a driver in the future, if not today. It's more about busting data. So take that off the table as a driver. What's driving our premium mass business is better product. We have a real mantra (ph) around here, but I think better the aesthetic appeal of this company, we're getting there. We walked last week for our new Four Seasons suites, our new St. Regis, our new Londoner suites, all being under design and construction.

You look what happened at our Venetian Property, it's just terrific, the returns on that investment, you just can't do better. Those rooms that we've reconfigured, reconstructed have yielded terrific results, freezes down at a run rate of 130. Who knows where it goes to. Our Venetian core suites for the premium mass are just delivering -- which we had mount many more of them. It's a suite driven quality product market and it's not just about quality product, it's about quantity. So it's great to have a small hotel just can't get enough, you need more. There is not an operator over there, not a one, that we would like to have more top tier suites and we're building them, and everyone wants them.

I think the evidence of Morpheus you'll see, the successive win is evidence that your quality wins and scale wins as well. We have both quality and quantity. We also have a hidden, everyone at Macao knows it, not a hidden secret. But our arena, our Cotai Arena built back in -- 2007 with the Venetian which people thought was pretty funny at that time, is probably one of the biggest drivers of premium mass business in the market.

Last week, we had a great Asian entertainer there, packed the city, packed our hotel. Our numbers on Saturday afternoon was incredible numbers for Saturday. And the fact is that, that's a tremendous asset, that people want to see these star entertainers, be it US stars or Asian stars. That is a 40 week year advantage we have on Fridays, Saturday, Sunday with top-tier stars, with top-tier acts, that people covet those tickets. In the whole town, if you talk to other operators they'll tell you, what happens we bring in these kinds of acts. It makes for a whole different weekend, a whole different agenda, and you can see it our numbers have popped.

So entertainment, suite product, quality suite product, quantity suite product, by the way retail asset lastly go up in the Four Seasons, they got knocked over by people trying to get into the stores. It's an amazing thing to watch. It's experiential. These young excellent people come from further away, they stay longer, they want better things in life, they want entertainment, they want to stay in fancy rooms, they want to buy fancy clothes and they're having a hell of a time over there and we provide that experience. That is the advantage we have and we have it both in terms of quality and quantity, and that is driving our business. Tomorrow, that bridge will be a big driver for the entire market. But today, that's what driving it.

Anil Daswani -- Citigroup -- Analyst

Thanks. And just one quick follow up on Singapore. Do you guys feel that, you're losing a touch of market share or is that the market that you're seeing that getting a touch weaker?

Robert Goldstein -- President and Chief Operating Officer

I don't know -- I don't think, we're very comfortable with our performance over there. I just, I can't speak to -- I look at profitability more than market share, we'll fix it and making money here. If we could extend more credit or do more things to create more market share and profitability, I'd be in favor of that. We feel we're maintaining our market share and more important our margin and profitability. Again our focus over there is trying to figure out how to get more capacity like Macao which we could built a couple of St. Regis, in our of couple of Four Seasons properties because they had the demand in the foreign markets around Singapore have outsized demand and have outsized MICE demand. I just need more rooms and more slots and more of everything to take advantage of it.

Anil Daswani -- Citigroup -- Analyst

Thank you.

Robert Goldstein -- President and Chief Operating Officer

Thank you. Appreciate it.

Operator

Our next question comes from the line of Mr. Joe Greff from J.P. Morgan.

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

Hey, good afternoon guys.

Robert Goldstein -- President and Chief Operating Officer

Hi Joe.

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

My first question on Macao, relates to your mass customer behavior within the fourth quarter. Was there any or much of a difference in behavior, say at the beginning of the quarter versus the end of the quarter and where I'm kind of going with this is, maybe might being overly optimistic, that maybe the average mass players visited -- more confidence throughout the quarter. And then I have a follow up also related to Macao.

Robert Goldstein -- President and Chief Operating Officer

Joe, I can't give you a color there, I don't see that in our numbers, I don't see a elevation or decline I think it's pretty consistent I would say. I don't, I'm not sure I can give you a good answer on that. We don't see a whole lot differentiation from October through December.

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

Okay, and then sticking with Macao, since the smoking ban earlier this month on the VIP side, can you talk about what sort of impact you're seeing, you're the first guy to report so, you are the first guy to sort of talk about it. Thanks.

Robert Goldstein -- President and Chief Operating Officer

Right. We walked to there last week, we spent a long and very productive week and we walked up all the properties and hours of the properties and looked at everything. My belief is the smoking issue is a small speed bump to this market. It's a speed bump that will disappear. Areas that had smoking previously may suffer because the smoking room has now become the new predictor of where you're going to gamble. So example, if table A had smoking, but table B didn't, but has a smoking attached to it now, B will be larger than A's performance in the future. But between all the smokers we're seeing in the market, we are almost of us are open already and most of the market very well ready for smoking. Plus the outdoor space which always had in some buildings, I don't see this issue as being -- is you really worry about it, you shouldn't be. This is a short-term issue, we'll resolve without material impact. The smoking room is the outdoor space, the demand to gamble, I know everyone was worried about January, but we walked around Macao last week and that's reason for worry. It looks pretty good to me. Smoking will dissolve and disappear. I think those who take it seriously should move on and find something else to worry about. It's not going to be a long-term impediment.

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

Great. Thanks, Rob.

Robert Goldstein -- President and Chief Operating Officer

Thanks Joe.

Operator

Our next question comes from the line of Mr. Chad Beynon from Macquarie. Sir, your line is now open.

Chad Beynon -- Macquarie -- Analyst

Hi, thanks for taking my questions. First on sticking with Macao, your retail segment, I guess both on Macao and Singapore, it appears that the sales per square foot increased in the fourth quarter. That's evidence in one of your slides and then also in the slide that you talk about turnover rent. And this is different than what we've heard from some of the luxury retailers that have reported and highlighted some weakness in Macao, Hong Kong and Southeast Asia as well. So could you maybe just elaborate on this? And if this could potentially affect 2020 base rents or turnover, just some more color on the strong performance? Thanks.

Robert Goldstein -- President and Chief Operating Officer

Well you're looking at this slide, I'm not sure how much color I can add, except the business is booming. I walked through the Venetian last week and I don't know we had a sale going on or something but it's truly incredible to see the people there. My sales -- what more does these kind of numbers, we did 17.46 (ph) a foot. The Four Seasons is now back at 58 heading for 6,000. Honestly I went to the Four Seasons but I didn't understand the amount of people on a Tuesday afternoon, Wednesday, it's just extraordinary. I don't know what you're hearing but we're awfully happy our retail numbers across Asia. Again this decline bring more declines.

Extraordinary tenants want more space, retailers are extremely happy with our numbers, our retail team has done a hell of a job over there and I think it's clear showing ahead we see no decline. In fact if any strength goes to strength maybe it's about again scale and you walk through The Venetian and the Four Seasons you have this incredible assortment of land of tenancies that cumulatively give you the most amazing indoors shopping experience. And the faces of the people they're young, affluent, I made the comment to one of our team members.

The Chinese consumer looks so sophisticated, so fashionable and frankly so fluent. And they're buying and they're buying with both hands and we couldn't be more pleased by retail performance. I don't see any slowdown. I think it's going to keep booming, Chinese New Year is ahead. It's very positive and very exciting, across our portfolio retail just gets better. And keep in mind that's one of the reasons they stay with us, they eat with us, they go to our entertainment facility. We've got this ecosystem of shopping, eating, entertainment, gambling, it all looks in tandem. And when you see it on the ground like last week, we were there for four or five days, it's pretty exciting to watch and it's not going to change my opinion. That success in our retail is here to stay.

Chad Beynon -- Macquarie -- Analyst

Great. Thank you. And then my follow-up just when you're speaking with your junket partners and talking to them about how they're handling credit during this China slowdown and trade war situation, did you see anything more pronounced in the fourth quarter with maybe some of your junket partners pulling back on credit extension? And when the trade war is resolved, do you think that could be -- maybe a positive with some more credit coming into the market?

Robert Goldstein -- President and Chief Operating Officer

It's really tough for us to comment on global macro versus the activities of our junket partners week-to-week. It's very hard to make that connection and sort of add any commentary there. What I would say, is that we've been pretty consistent over the last year with the way we work with our junket partners in terms of prioritize the extension -- the product that we have extended to them. What I will tell you is we've been investing in this segment. I think we've been reestablishing and strengthening the relationships that we have with our partners over many years.

We've been investing in their spaces, investing in amenities and service those spaces and investing in the team members that help service them. So, we feel like the segment is a powerful one. We think it's something that has a lot of opportunity. We've grown in the segment in the last couple of quarters and I think from a credit standpoint, we've always been very prudent and been very measured and I think we'll continue to do so. And I think we have a good dialogue and it's an active dialogue with them, because of our ebbs and flows, but it's not something that we can look to a global macroeconomic effect and make any connection to. It's really sort of dealt with on the ground as we operate the business dealing with competitive forces.

Chad Beynon -- Macquarie -- Analyst

Okay, I appreciate it. Thank you very much.

Robert Goldstein -- President and Chief Operating Officer

Thank you.

Patrick Dumont -- Executive Vice President and Chief Financial Officer

Thanks Chad.

Operator

Next question comes from the line of Mr. Shaun Kelley from Bank of America Merrill Lynch.

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

Hi, good afternoon. Just wanted to kind of go back to the sort of mass customer segmentation and what you guys are seeing there. In one of the slides you guys kind of showed the -- a very modest decline in mass spend per visit and I think you noted a pretty big uptick in daytrip visitation. Can you just give us sort of your outlook for what kind of customer as you guys are seeing in the market? Is this sort of the new normal? Is this being driven by infrastructure and some of the changes there? Sort of what's driving it? We continue to see, obviously, very healthy visitation numbers into the market and is this sort of the new normal, do you guys expect us to kind of balance out or change over time?

Daniel Briggs -- Senior Vice President, Investor Relations

So, Shaun, it's Dan. If you look at Page 15, I think and Rob has referenced this earlier. Guangdong province that first line, 10.5 million visitors from the adjacent province plus you've got visitors from Hong Kong. The bridge makes it easier for people to get over and back over time. It runs all night, not to worry about a boat. At the bottom of the chart you've got 14.7 million visitors from Guangdong. The issue that the market is going to have is without more hotel inventory. All the hotel rooms will be taken up by wealthier and wealthier people, which is great for premium mass, but it also causes a squeeze effectively where people can't find a room if they're just coming over. So that makes a great market in the base mass, it makes a great market in the premium mass. And for the future to get the $30 billion of mass revenue in Macao, more hotel inventory must be built. So the market will continue to evolve. The customer's sale (ph) will evolve, but what's crystal clear is that without more hotel inventory, there won't be enough capacity for everyone who wants to come.

So that creates the opportunity for us on both sides of the chart -- the previous chart on Page 14. They are both going to continue to get better and better over time. The growth is great in both places and we're very happy to have daytrip visitation. We're very happy to have premium mass visitation. We're happy when the Chinese people get wealthier. There is no way that any of this won't continue as long as more hotel inventory gets added to the market. If no new hotel inventory ever gets build, the market becomes more top-heavy, which would be unfortunate and it would limit growth. But we don't expect that to happen. We expect more hotel inventory to come in.

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

Perfect.

Robert Goldstein -- President and Chief Operating Officer

Shaun, that's right. We love to build, we love to build more rooms today if we could in non-gaming hotels. We would love investing more money in Macao. We've made that clear with the government. We are such staunch believers in the atrium where sleeping rooms for every segment, MICE, leisure, gaming, it's what Dan's pointing is so evident when you're there in January and you can't get a sleeping room, it's clear everybody needs more sleeping rooms in that market.

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

Thank you very much. And just a quick follow-up, switching to Vegas. Any color you can provide on just sort of the cadence of how you guys are expecting RevPAR to play out as we're seeing through the balance of the year? Just -- or what you're seeing on the convention side and convention mix? It looks like 4Q is quite strong but we saw a bigger volatility in the market broadly in 2018 than we were used to. So just sort of, kind of the health and maybe again cadence of what you're expecting to see there?

Patrick Dumont -- Executive Vice President and Chief Financial Officer

So we had a tremendous quarter. It was a great result from the room revenue side. We're very pleased with our operations there. Our revenue per occupied group room night is incredibly strong. And we see that continuing. So far things have been very good. As you know we don't give RevPAR guidance, but we're very pleased with the progress that we've made in the Las Vegas market. Rob will probably talk a little bit about the room night, the group room night expectations, but it's a practical matter I think we're very pleased with the operations team here. They've done a great job, growing different segments of the business, including our Baccarat drop, which we're very pleased with. But again it's highly volatile and some of the non-Baccarat business, which we believe we can invest in the future to grow. But from a standpoint of Vegas, it's been growing well and we're very pleased with the quarter and we think some of the tailwinds will be helpful for us coming up.

Robert Goldstein -- President and Chief Operating Officer

Team here is going to be very bullish in 2019 and group volumes and feel very strong about how the market is progressing. No fears for 2019, strong group market. We'd like to win a better (ph) case in the casino. Other than that, our lodging and our -- if you walk around this town in January, the CES and the shot show which is happening, it's pretty impressive place Las Vegas, especially in January. So we feel very good about our prospects in 2019 as well as the entire Las Vegas marketplace.

Patrick Dumont -- Executive Vice President and Chief Financial Officer

In terms of our Venetian and Palazzo property, we've done a lot of reinvestments in the last couple of years. If you've been here you've seen some of the results. We're very happy to floor space that's been renovated. We've got a lot of new restaurants on offer. We've made significant investment in the rooms and other spaces that we feel that it will continue to make the property competitive to position it well for future growth in the market.

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

And it's probably a lot warmer than New York too. Thanks a lot guys.

Robert Goldstein -- President and Chief Operating Officer

That's a rumor, yeah. Next question?

Operator

Our next question comes from the line of Ms. Felicia Hendrix from Barclays.

Felicia Hendrix -- Barclays Capital -- Analyst

Hi there.

Robert Goldstein -- President and Chief Operating Officer

Hi Felicia.

Felicia Hendrix -- Barclays Capital -- Analyst

Hi. Some of you also sound sick, so I hope everyone is well tuned. (multiple speakers) Yes. So Rob look you talked a lot on this call about what you've been seeing in mass and VIP. But on this VIP side, you just -- you outperformed so significantly, I just wanted to continue to dissect that a bit. Just wondering on the VIP side, so given that outperformance were those unplanned for you? Or do they surprise you as well? And I'm also wondering is the strength there that the driver for the decline in EBITDA margins in the quarter?

Robert Goldstein -- President and Chief Operating Officer

Well, I think we alluded to earlier the mix on the -- our rolling business both direct and junket was very strong. As you know our rolling business direct is very strong there. Our margins are much higher in that piece of the business. And we have played lucky in the wrong side of the equation. The junket played strong and the rolling direct played very weak and it cost us real dollars. As far as our commitment that we've always been a believer that's an important component, is not the driver, it's a small portion of overall profitability. But we enjoy the growth and we believe it's important to keep it competitive and we've done a very good job creating a better aesthetic in the junket rooms and the rolling rooms. We've built these suites which we have plenty of.

The entertainment obviously is an unfair advantage, it drives amazing amounts of rolling business direct and junket. I think we just continue the course. We will be subject to the market's ups and downs as it relates to money flow and all the challenges that the market face. We can't work around that. So our base business, the premium mass, mass remains our -- the money part of our EBITDA the strong part. But we're happy to participate in junket growth. And now it's planned -- the team there has been, very, very focused on trying to get more competitive with the right spaces, with the right junket arrangements and it's paying-off.

And frankly, we have the advantage anyway with the entertainment, the suites, all the good stuff we have, why not just deploy it further into that segment and add to our profitability. And so as part of our entire EBITDA ecosystem, it's helpful. It won't drive our business to $4 billion, that's where the mass -- premium mass comes in. But it was a planned strategy, it wasn't luck solely and this quarter was unlucky. But it will bounce back and I think you'll see some very good news ahead in the future of 2019 for our rolling business.

Felicia Hendrix -- Barclays Capital -- Analyst

Okay. And then just staying on that, I know you gained a lot of share on the VIP year-over-year, but quarter-over-quarter it looks like it's down about 100 basis points. So is there any way to tell this early in the game who you -- who might have taken some share? And again, I know the overall market VIP number that you put in the deck is that -- is a guest, but...

Robert Goldstein -- President and Chief Operating Officer

Yeah. The problem, I think the world you can't -- trees don't grow straight to the sky. There are some ups and downs and, yeah, a little blip there, but overall there got to be performance the last couple of years. I look at the last two years, which staggers my imagination. I sat with rooms of people who told me we would be under $2 billion of portfolio EBITDA in -- by 2019. We would fall, we'll loose share and we'll be falling apart and the world comes to an end. And here we are sitting on $3 billion a year, 18% growth, material impact in all segments. And I just couldn't be more proud of our team and our focus. And we just keep growing in the right direction. And for those of you who are in this for the long-term, like we are, I think you'll be very, very well rewarded down the road of our performance. We are in the right place, right time, right assets and we'll take on all comers in terms of segmentation, junkets included, rolling direct. So very bullish, a blip by 100 basis points, I wouldn't get too excited about. Not material.

Felicia Hendrix -- Barclays Capital -- Analyst

Thank you.

Robert Goldstein -- President and Chief Operating Officer

Yeah.

Operator

Our next question comes from the line of Mr. Robin Farley from UBS.

Robin Farley -- UBS -- Analyst

Great. Thank you. Rob, you mentioned earlier in the call, you've been talking about growth and you said the Londoner is under way. I wonder if you could just give a little bit more specifics about the timing of -- and potential disruption? It seems like it could be hard not to have it, and so just to manage expectations about it. Thanks.

Robert Goldstein -- President and Chief Operating Officer

Sure, sure, a very fair question. First of all, I want to make sure everyone understands. We developed about 70 million square feet at LVS over the years, between all our different properties. So I think we're -- I read some notes, people are concerned about what's happening to Londoner. Don't be concerned. It's going to be a magnificent success story that we'll be opening probably late 2020. It's under way already. It's a big challenge. We're taking a 1,200-room hotel and making into a 600 rooms all-suite hotel in The Londoner.

There will be some disruption, Robin. And we'd be silly to say it wouldn't be. But it's a weird process in that and we're making progress in design approvals. We're continuing labor. We're making progress on our quotas. The government support is there. And I think the truth is, we're going to have an interesting process here whereby we're running -- still running a major casino there under the SCC umbrella, while we're developing Londoner, with Dragon's Palace open the entire time.

We will open the St. Regis before The Londoner opens up. It will be a work in progress for the next 18 to 24 months. And there will be disruption. I'm not prepared to quantify, I just can't. We will not lose a table game or a slot machine in the portfolio. We have the ability to transfer assets in the SCC as well as on to other gaming floors if need be. I think some of the people in our team are pretty astute. And I think we're able to move our assets around to make sure we maximize them. I'm pretty confident that the disruption is going to be not as bad as other people anticipate.

I'm also more confident that at the conclusion people who are kind of making these comments about, gee, how can you take away a property making $800 million? Well, when it makes a whole lot more than $800 million, perhaps long-term investors will recognize, there is no better way to invest our capital than the SCC transformation in Londoner. Some have referenced earlier to Patrick about M&A. There is no M&A that compares to this transaction. The return on this invested capital will be breathtaking. And I think those who are questioning that should look back at the Parisian which has now past 20% return on invested capital. Look at The Venetian now steamrolling toward $1.4 billion, $1.5 billion.

I think someone has got to pay a little attention to our past successes and give us some credit for Londoner. Yes, there'll be some disruption, we recognize that. Perhaps that EBITDA will transfer along those gaming assets to other properties in the portfolio and limit that disruption. But in the end, if you're a long-term thinker, you want to make money for long-term, this is a game changer for us. We're going to take a property that's been subpar and make it the equivalent to a Venetian-style property except on a twice as many sleeping rooms and fully themed and fully authentic London-style. And I think the result is going to justify the investment and the time and the effort. The disruption we'll have to wait and see how bad it gets. We're pretty confident that our team there is pretty astute. So, that's our take on Londoner.

Robin Farley -- UBS -- Analyst

I appreciate that and just one clarification it's not a question whether you'll get a return on the investment, it's just broadly trying to think about what expectations should be for this year. When do rooms start coming out of service? And kind of what percent of rooms will that be, like just to think about maybe that's when we'd see some impact?

Robert Goldstein -- President and Chief Operating Officer

So, post-Chinese New Year's we'll start -- by the way St. Regis will open up its 4Q (ph) share to the public to open that building up and sort of an access that way, but post-Chinese New Year, you start seeing. The Four Seasons is going to open up in the fall of 2020. Londoner comes out of -- but Londoner the transformation -- from the current holiday and results (ph) happening in March and April, the full transformation, and will be down for the 12, 14 months where it's going to take to transform it. But the most of the property, again, the Conrad remains intact. The St. Regis Hotel remains intact. We are building a new St. Regis behind the current St. Regis that is under construction. Dragon's Palace remains intact till the end. So, again, if there is different dates, the one thing does come down, we complete close before the holiday in 1,200 keys post-Chinese New Year's. We open them probably late in 2020, that's the biggest single thing.

Patrick Dumont -- Executive Vice President and Chief Financial Officer

Keep in mind too Rob that -- those 1,300 hotel rooms like Holiday Inn are the least productive hotel rooms that we have in the entire portfolio. They are great for families, they're great for people who come over. The product they were creating is going to be even at much more productive, the same way that we saw at the Parisian taking smaller rooms out and creating larger suite. We expect to see the same kind of accretion. So, we're not losing that much when we take those hotels out of service on the gaming side, in particular. And so there is a big benefit that we get and a small kind of degradation, but you get a big outsized benefit once you're completed.

Robert Goldstein -- President and Chief Operating Officer

What I don't know Rob is what's going to happen around the properties as we start tearing things down, the facade on the strip there that's going to be disruptive and all that. But we have alternative ways of accessing the building. So, we're going to wait and see how we run this thing, but a lot of confidence the team there is really skill that wanting to transfer people. And, again, we have lot of the properties we can move the demand to. So, hopefully, we can limit disruption as we build this thing for the future.

Robin Farley -- UBS -- Analyst

Okay, great. Thank you very much.

Robert Goldstein -- President and Chief Operating Officer

Thank you.

Operator

Our last question comes from the line of Mr. Carlo Santarelli from Deutsche Bank.

Carlo Santarelli -- Deutsche Bank -- Analyst

Hey guys. Thank you. Rob just quickly on kind of better understanding the VIP strategy right now. In terms of where you're seeing the majority of the growth both on an absolute basis, obviously, revenue up significantly this period. Are you seeing it more through the junket channels or more through your direct channels? If I recall and I'm not sure you're going to provide color on this, but if I recall, your direct mix maybe used to be closer to 30% several years ago. And is that roughly the same and where is the growth coming from?

Robert Goldstein -- President and Chief Operating Officer

You're right the first time, I'm not going to provide the breakout, but I appreciate the question. The answer is both, we're getting strong, premium and direct play and premium, rolling, direct and we're also getting strong junket. Our junket partners have been terrific. It's coming in both ways. And I think that the point is we're number one in premium direct in the market and growing. And the truth is, that's a -- very simple equation is back the same old story assets. When you have the best entertainment in town, you have these magnificent shows they want to see, when you have these junket rooms that are getting better and better. And more important, again there is a problem over there. There is just not enough sleeping rooms or quality of these high roller type customers, be it direct or through junket. And as you know because you understand this well than anybody, the junket business has evolved where the customers dictate where they want to stay down.

The old days of the junkets being in command of where people gamble that's over. So the better products, the better properties, the better entertainment facilities, the better retail places attract the customers. So we're getting a lot of that business from both direct and from the junket partners. And as you know they feed off each other and they complement the non-rolling piece as well. And again our ecosystem with retail, entertainment, too many suites for anybody else, I mean, we just have much more product than anybody else. And as a result, we're going to keep growing that.

The only downturn as you know is the frustration, the macro frustrations in the market as it relates to that segment and that we can overcome. But assuming the business is there, the economy is healthy and the customers are showing up, we're going to keep getting outsized share of that segment. The same we're getting outside share of everything else. I think the short-term views of Macao has always been a mistake, this is a market fueled by product, by quality and by scale and we had that in space. And I think as long as that holds up along with our stellar management team, we're going to continue to be a very strong force in Macao on the road to $4 billion.

Carlo Santarelli -- Deutsche Bank -- Analyst

Great. Thank you. And then I just want to be mindful of the time, but in terms of your buyback activity in the quarter, could you just talk a little bit about the thinking that, that went into, obviously, accelerating your pace of spend? Is that, yay, we find the valuation attractive? We have, obviously, a very strong balance sheet, or kind of what was different in the 4Q with respect to your approach to the buyback relative to prior quarters in the year?

Patrick Dumont -- Executive Vice President and Chief Financial Officer

I think, yes, to your first two statements and I think we had raised the liquidity earlier on in the year for the purposes of returning capital. And we felt very strongly that we have a lot of growth of potential. We're investing $2.2 billion as Rob has been laying out in the Londoner as well as other high potential projects in Macao and the Four Seasons and St. Regis. We see a lot of long-term value in the equity here. It's plain and simple, the Chairman sees a lot of longer-term value to the company, believe that it will continue to return capital in a meaningful way, and we have the liquidity we want to take advantage of. And so that's the nature of the repurchase that you saw in this last quarter and we'll look to be aggressive again in the future, because we feel very strongly about our returns and the potential of the new investments that we're making. So that's the result of that.

Robert Goldstein -- President and Chief Operating Officer

To put it succinctly, we gave buybacks.

Patrick Dumont -- Executive Vice President and Chief Financial Officer

Gave buybacks.

Carlo Santarelli -- Deutsche Bank -- Analyst

Understood. Thank you, guys.

Robert Goldstein -- President and Chief Operating Officer

Thank you very much. Appreciate your time, Carlo.

Daniel Briggs -- Senior Vice President, Investor Relations

Thanks very much, everyone.

Operator

Thank you all for participating. That ends today's conference call. You may now hang up.

Duration: 55 minutes

Call participants:

Daniel Briggs -- Senior Vice President, Investor Relations

Robert Goldstein -- President and Chief Operating Officer

Patrick Dumont -- Executive Vice President and Chief Financial Officer

David Katz -- Jefferies -- Analyst

Thomas Allen -- Morgan Stanley. -- Analyst

Stephen Grambling -- Goldman, Sachs & Co. -- Analyst

Anil Daswani -- Citigroup -- Analyst

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

Chad Beynon -- Macquarie -- Analyst

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

Felicia Hendrix -- Barclays Capital -- Analyst

Robin Farley -- UBS -- Analyst

Carlo Santarelli -- Deutsche Bank -- Analyst

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