Las Vegas Sands has revealed that it will no longer pursue its bid to develop an integrated resort in Japan.
In a shock announcement, LVS – which had been angling for a license in Yokohama – said it would instead focus its energies on “other opportunities,” pointing to the framework around Japan’s IR licensing as the reason for the company’s departure.
“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,” said LVS Chairman and CEO Sheldon Adelson.
“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 Macau 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, Macau 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.”
The sudden decision by LVS to withdraw from Japan comes after President and COO Rob Goldstein warned last October that the rising cost of developing a Japanese IR was becoming cause for concern.
“We’re not going to Hokkaido, we’re going to be in a top tier city which would mandate US$10 billion – and that may be light.” Goldstein said during the company’s 3Q19 earnings call. “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 ask whether you can get the returns that your shareholders deserve.
“Japan will take a little more thought process. We’re starting, we’re not writing it off, we’re deep into it and we’d like to be there, but we’ve got to make sure, at the end of the day, that it’s prudent.
“It’s going to be a big number to make it work.”