Dr Wilfred Wong

In this exclusive interview, Inside Asian Gaming sat down with Sands China President Dr Wilfred Wong at The Londoner Macao to garner his views on the future development of Macau and the role Sands China will play in the city’s diversification efforts.
Andrew W Scott: Let’s start with your observations on the Macau market since reopening on 8 January. Have customer preferences and demographics changed, and how is Sands China capitalizing on the new Macau?
Dr Wilfred Wong: We have seen a rebound of travel back to Macau, not just from mainland China and from Hong Kong, but from other parts of the world as well. And what we see is that the people that we know who are high-rollers, VIPs, they’re now coming back directly to us instead of going through junkets or agents like in the past.
We’re bringing in these people from other parts of the world too – Southeast Asia, Japan, Korea. Really, this fits very well into the government’s wish that we should try and promote Macau overseas.
We have been using private jets, and we have been doing a lot more overseas promotion, using our overseas offices to really try and get these customers here. The staple of the casino now is actually the mass and premium mass people, which we have also been developing. Even in the past, we were the leader in mass gaming – we have 30% of the market share. Overall GGR:  we used to have 23% but with the results of the first quarter, you see that we’ve increased that to 27%. I think that is all a result of the market changing shape, that there is more mass gaming than VIP gaming and that’s the segment that has recovered the fastest.
And therefore, with our facilities, with our large room inventory, we have been able to capture that mass and premium mass market.
AWS: When you refer to that mass and premium mass market, Sands China has recently invested more than US$2 billion into the conversion of Sands Cotai Central into The Londoner Macao. Why was that change made and how do you feel about your Macau product portfolio generally?
Dr Wong: We have always taken the view that in a very competitive market such as Macau, properties with a theme find it easier to attract tourists. With The Venetian, which has been in operation for over 15 years, it always scored very high in the tourists’ minds of places they must see when they’re in Macau – second only to the Ruins of St Paul’s. That’s why we developed The Parisian and then, when we were planning to redevelop [Sands Cotai Central], we felt, “Hey, we have to find another destination”. We did some surveys and found that among the Chinese people, their few must-see locations in the world include London, so we decided to continue with our European themes by adopting the London theme.
AWS: Does that show a growing understanding of the market by Sands China? Is it something that has emerged or something that Sands has discovered as part of its journey over the last 20 years?
Dr Wong: I think it’s a combination. It’s a combination of us getting to know the market better and the market itself changing, because if you look at the new travelers, the new tourists, what they are looking for is somewhat different from the previous generation. They look for more iconic features, they look for photo opportunities, they look for good food, good places to hang out.
And some of our customers are younger in age than our previous customers. So, when we made a decision to transform this place, we took everything into account and asked, “What will be the future – not just now but for tourists over the next decade?” And this was where The Londoner journey began.
AWS: When the Macau gaming industry was liberalized more than 20 years ago now, there were six concessionaires all basically starting on an even footing. Yet here we are today with two operators in the marketplace (Sands China and Galaxy Entertainment Group) that are clearly much bigger and with much larger market shares than the other four. In your view, how and why did this happen?
Dr Wong: I think it has to do with the vision of our founder, Mr [Sheldon] Adelson. When he first came to Macau, everyone was trying to identify sites for development in the old part of Macau, which is where you see MGM, Wynn – and of course Sands Macao was the first to be there. But he looked for further development opportunities and the government said, “There is this site in Cotai you can develop”.
I remember him telling me and Dr Miriam Adelson that when they went to see the site, they couldn’t see anything but a road and on both sides was water. When he asked, “Where’s the land?” they replied, “Under the water!” But immediately Mr Adelson saw the opportunity of a whole-scale development for this area, and he was the one who mapped out the blueprint. He was willing to put his money where his mouth is. That’s why we were the first one to have completed all our commitments to Macau, and we have invested a total of over US$15 billion in our properties. And you can see with all this development, every step along the way, we have had in mind the integrated resort model.
The Venetian Macao heralded in a new era for Macau’s integrated resorts when it opened in Cotai in 2007
We now have a total of 3.2 million square meters of buildings and only 4% are gaming related. The rest are non-gaming. We have 12,000 hotel rooms, two arenas, four theaters. We have over 700 retail outlets, over 150 F&B outlets. All of this constitutes the total package for an integrated resort. And that is why we can cater for the demand of tourists when they come to Macau. It’s not just gaming, it is everything they can think of. And I think our competitors, when they were latecomers to Cotai, they didn’t have the same luxury of space.
Secondly, they did not think on the whole-scale basis as we did. One other operator did and that’s why they now have an arena. They also have a big shopping mall and all that. And that’s why it ended up with the two of us having more room for development and a bigger appetite for taking in tourists.
AWS: On that theme of scale, the prevailing wisdom amongst the commentariat is that Macau is once again supply-side constrained rather than demand-side constrained. Does Sands have that supply side-constraint in rooms and do you plan to build more hotels?
Dr Wong: We understand from the government that currently there are maybe 20 hotels under planning or development in the whole of Macau. And these are probably not entirely of the integrated resort model. They are probably standalone hotels, which would also be very good for Macau because obviously one of the constraints that a city that is growing faces is the lack of hotel rooms.
People always compare us to Las Vegas, and Las Vegas has 150,000 hotel rooms. We have 40,000-plus. Singapore has 60,000 plus. So obviously if we continue to grow, room inventory becomes a very important consideration. Now, for Sands, we have completed our commitment under the previous concession, and under the new concession we have asked to build more MICE related facilities. For example, we’re going to build an 18,000-square meter MICE facility to be connected to the current Venetian MICE facility. And if you have the MICE facilities, you need the hotel rooms. So, we’re looking at the possibility of adding some hotel room inventories over the next 10-year period.
Shoppes at Londoner Macao
AWS: Let’s move on to the subject of labor. During COVID we saw a lot of foreign workers leave Macau – both your typical blue card, coal-face workers who have essentially been replaced with local Macau or Chinese talent, and your senior executives. Can Macau fill that void on the line staff and executive fronts or do you think we will see executives and other workers coming back to Macau in the years ahead?
Dr Wong: I think you have to look at it from the short-term and the long-term perspective. Long-term, the government really wants to see us grooming local Macau management talents to fill that void but short-term there are always going to be gaps that need to be filled externally. We are lucky because at this stage over 90% of our management category is local already. We have a large proportion of local talents who have been groomed over the last 20 years, and we have always adopted a very sophisticated and advanced talent grooming strategy so that many of them are now ready to step up. Some of the executive positions, where people left during the COVID period, have been filled by the local talents that we’ve groomed, and they have succeeded.
Obviously with the development of non-gaming facilities and programs, we may need to recruit some people from outside of Macau. But hopefully as we go along, we will be able to train more people underneath these people. We have a very rigorous succession planning process so that local people are always underpinning the expatriates.
AWS: Another government initiative is this idea of getting more foreigners to Macau, with the MGTO stating recently it wants foreign visitation to grow from 2.2% of total Macau visitation in the past to 10%. That’s a big increase given the perception that Macau is really just for Chinese and not as friendly to foreigners as other international destinations that are used to welcoming tourists from all over the world. Do you think such a large increase in foreign visitation is an achievable goal and what is Sands doing to attract more so-called foreigners?
Dr Wong: Well, you can’t change something overnight. The fact is we have been very dependent on travelers from the Chinese mainland and from Hong Kong. We used to have about 70% of tourists from the Chinese mainland, and Hong Kong was about 19% or 20%. Ever since the opening up of Macau in January, that figure has changed to 60% from mainland China and over 30% from Hong Kong. But we are now doing a lot of promotions overseas. We are expanding our overseas representative network, we are bringing in wholesalers, tour operators to come and experience Macau, hoping they will help introduce Macau to the world. Now, this is a long-term goal – 10% is not today and it’s not tomorrow. It is the long-term. And I believe that with all six [concessionaires] pooling our resources together – you saw that all six of us turned up in Lisbon recently trying to promote Macau overseas – I think all this counts, and hopefully over time with all the effort that we put in, we will gradually increase the number of foreign visitors to Macau. Whether we achieve 9% or 10% or 11%, we just try and do our best.
AWS: On the theme of overseas, we recently saw the MGM-ORIX consortium finally get approved in Osaka, Japan, and there may be a second IR in Nagasaki. There’s talk of IRs in Thailand, while Singapore is continuing to grow with a fourth tower at Marina Bay Sands and Resorts World Sentosa doing a big expansion too. Then there’s the Philippines which is on track to double its GGR to become a US$10 billion market by 2027. Do you see that as a threat to Macau, particularly if Macau becomes more reliant on overseas visitation?
Dr Wong: Competition is the norm and whether that competition comes today or in 10 years or 20 years’ time, you have got to be ready. As an operator you have to try and lead the pack.
That is why it’s so important for us to consistently upgrade our facilities, renovate our hotel rooms. You know, we haven’t finished with The Londoner program. We’re going to renovate the Sheraton Towers. That’s 4,000 rooms. We’re going to spend a lot of capex on those buildings, all in the hope that we will bring the latest trend, the latest experience that people will really uphold as the standard. If you compare us now with the Venetian days, we have brought the whole thing to another level, and I’m sure our next edition will try to surpass our current edition. So, it’s not competing with others, it’s competing with yourself as well. Only if you can give the best product and the best service standard can you withstand strong competition.
Sands Macao
AWS: Sands has committed to spend US$3.85 billion over the next 10 years, which at 3,650 days represents an investment of about US$1 million every single day. You mentioned that over 90% of that is in non-gaming to diversify the economy as per the government’s wishes, but how much of that will go on bricks and mortar development and how much on “programming” – getting the latest act to perform a concert or holding a sporting event?
Dr Wong: First of all, on the question of spending US$1 million a day, it just pushes us to make more than US$1 million a day. We start by looking at our first quarter earnings, for example, and can we afford it? Yes, we can.
Secondly, this also shows our commitment to the long-term future of Macau. We’re not just investing for the next 10 years, we’re investing for the years after because many of these facilities will not even come into play until maybe the seventh or eighth year of the concession, so we would never get the ROI, the return within this period. So, you have to believe in the future of this company and of Macau.
On the proportion between opex and capex, my short answer is it is no different from what we have been doing. There will be a lot of capex involved in our investment while we continue with our investment in opex. Remember, we have been doing a lot of the opex in the past – we have a concert every weekend for 52 weeks a year. We have a lot of MICE facilities. We have over 700 retail outlets that we are promoting every day. So, we have a big package already in place and the future is very similar, but everything on a bigger scale.
The Parisian Macao
AWS: Sticking with that topic, some have called this investment commitment a necessary evil to win the new concession for the next 10 years, but your Chairman and CEO, Rob Goldstein, recently came out and said he believes the non-gaming spend can be a viable business proposition. What would Sands China’s definition of success be in terms of return on that money?
Dr Wong: Our definition would be that we continue as a profit-making entity and that hopefully in turn, when the time comes and we have enough time for the recovery, that we will see a return to profit that is similar to the level we have been able to achieve in the past.
The Londoner Macao
AWS: You spoke earlier about the company’s plan to expand its MICE facilities. What do you think are the main challenges for Macau in MICE compared to the traditional regional players such as Hong Kong and Singapore?
Dr Wong: In the development of MICE, Macau used to have two constraints. One was the availability of hotel room inventory. Although the six operators have 26,000 rooms, many of them are reserved for [non-MICE] customers, so not all rooms are available. Second was transportation and connection to the world. We have a very small international airport, and we have to rely on Hong Kong International Airport, which in the past meant people had to take a ferry after disembarking to get to Macau.
Now, that has changed slightly with the Hong Kong-Zhuhai-Macau Bridge, which means we have at our disposal another international airport – an airport that is really the hub for Asia. We should be able to receive more regional conferences and mass activities from other parts of the world through Hong Kong International Airport, and we are already starting to work with the government on how we can make the experience of MICE attendees more pleasant when they arrive at Hong Kong airport. How do we make sure they can get on a bus that takes them over the bridge and to their hotel?
On the hotel rooms, I think we will have to continue to discuss with the government on how best to make use of whatever land is available, because the government already said there’s no more land, but there’s a development over in Hengqin. How can we leverage on Hengqin with improved transportation links between the two places? Actually, we (Sands China) have a back office in Hengqin and normally it takes me around 15 to 20 minutes to cross the border and arrive at the office. If that is possible, then maybe Hengqin could solve the problem of our hotel room shortage.
Sands China recently announced plans to expand its MICE facilities.
AWS: As you say, land is obviously quite constrained in Cotai which is almost completely built out, but there is an interesting little pocket of land just to the south of us at the moment where you have Le Jardin – or the “tropical garden” as it’s known – and you’ve announced plans to create a 50,000-square meter garden-themed destination there. That piece of land was obviously set aside for a property once upon a time, and I think even Parcel 7 and Parcel 8 beyond. Can you tell us a little about the redevelopment of the tropical garden, and what you think the long-term future is for that land to the south?
Dr Wong: The Le Jardin space has always been zoned as an open space. That’s why, in the beginning, we had to build this so-called tropical garden, which in the end we said shouldn’t be just tropical but a French garden because it’s at the foot of the Eiffel Tower (at The Parisian Macao). So that’s what it is now but with the weather conditions in Macau, there are several months every year where people cannot go there with the rain and the heat. So, we said, “let’s work on something that will become an iconic attraction for Macau, perhaps with an indoor conservatory and covered.” That’s the idea because we want to increase the number of tourist attractions. Any tourist destination needs new tourist attractions and if you look at examples like Singapore’s Gardens by the Bay, these are very attractive features. So, if we can do it, we’ll do it and that’s our proposal for that 50,000 square-meter garden.
As to the future of Parcels 7 and 8, it’s really for the government, and they are already designated in the overall town plan for commercial purposes. Exactly what the government wants to do when the land is [made available] – I think it’s really up to the government now but anything that is MICE related, convention related, would be very helpful for the overall Cotai package.
AWS: Sports tourism is another area Sands China flagged when signing its new concession contract. Are there any plans that you can share with us?
Dr Wong: Our advantage is that we already have the arenas in which we can host sports events, as opposed to some of the other competitors. And we do have a plan to upgrade our current arena very soon so that it has state-of-the-art facilities. After all, the current Cotai arena is 16 years old, but we now have the new Londoner Arena and that is a 6,000-seat arena, so on completion we would have a 15,000-seat arena and a 6,000-seat arena that can really work together for all kinds of events. In the past, our sports events were constrained by the need for entertainment activities, so if I have a concert on the weekend, I can’t really have a sports event. But with two arenas working, we should be able to accommodate more sports events.
Now, what kind of sports events? We are looking at it seriously. We would like to bring world class events, spectator sports and sports that would engage the audience. But you know, there’s so much that you can do in that space.
Cantonese fusion restaurant La Chine at The Parisian Macao
AWS: Is there anything that Macau can do as a gaming destination? There’s been a lot of attention on non-gaming, but how about attracting foreigners with new gaming offerings? Two things that come to my mind are poker and sports betting lounges similar to those that are popular in Las Vegas.
Dr Wong: Sports betting is definitely an attraction, but Macau has a franchise for this. When the time comes and the government decides it’s time for us to be engaged, we will be very interested. It’s very different because, the way we see sports betting, it should be a classy operation with sports bars and acting as a gathering place really.
Cotai Arena
AWS: What about poker? You see the World Series of Poker in Las Vegas where they attract hundreds of thousands of people for a six-week festival from almost every country in the world.
Dr Wong: We found that poker was not very popular in Macau for a while, although recently there’s some renewed interest, which is why we do have a poker corner created in The Venetian. The problem with poker is that it doesn’t – because of the cap on the table count – bring in the yield that each baccarat table brings. But for us, if we have enough tables and there’s enough interest, we are finding that it is yielding reasonably and that’s why we’re continuing with the poker corner and have increased the number of tables for poker in that corner.
AWS: How about tournament poker, which is very different in nature from cash games and could attract people from around the world? Could the government say, “Those poker tables are temporary tables” where they are removed from the cap just for the duration of the tournament series?
Dr Wong: Currently I don’t think the legislation allows for temporary tables, so whatever table you use has to be under the allocation. But should that idea gain momentum and interest, then a poker tournament is not out of the question.
AWS: China is currently experimenting with a Digital RMB which some analysts have suggested could one day become legal tender in Macau and even be used for gaming. How do you envisage that would work and do you see any of this becoming a reality one day?
Dr Wong: I don’t know how it would develop, how soon it would develop or whether the Chinese government would adopt Digital RMB as legal tender. I really don’t know. But seeing as they are doing all kinds of experiments, pilot schemes, it seems they are very interested in moving in that direction.
In some ways this has already happened in China – now you cannot go anywhere without your phone and it’s the same in Macau, right? The government is now just drafting legislation, trying to provide a legal framework for digital currency. But in fact, you go to any shop and a Chinese customer can use his WeChat Pay or whatever. So it is happening, but for us as an operator we will have to follow whatever the government imposes. If the government said one day that digital currency should be allowed in our casinos then we will cater for it. But at this stage we are still adhering to the policy of only playing in Hong Kong dollars.
Even if a Digital RMB is going to be used in Macau, you still have to denominate in Hong Kong dollars because otherwise it means there is a free flow of capital out of China. So I think the government will be very careful on this and in some ways that would probably defeat the purpose of trying to get foreign visitors and players in.
Popular restaurant North at The Venetian Macao
AWS: My last question is a personal one. It’s about you. When Sheldon Adelson first appointed you, I think very clearly one of your priorities, if not the highest priority, would have been to ensure the concession renewal got through. With that process now out of the way, what does the future hold for Dr Wilfred Wong?
Dr Wong: I think when Mr Adelson asked me to join the company, it wasn’t just the concession. I helped to build up a very credible team of people – you know most of them – and they are very good people, talented people. At the same time, we are now facing a new challenge where we have to invest more in non-gaming. Over 90% of our future investment is in non-gaming. So, what I’m now busy doing is really pointing to the future of the non-gaming aspect utilizing my background in arts and culture and movies. I help the team decide what to bring to Macau, what initiatives we should be looking at and really using the money meaningfully to do so. This is my current engagement. Looking ahead, my contract is not up yet so in the future I’ll be looking at whether I would like to continue for a while or whether it’s time for me to call it a day. But that decision has not come yet.