That must have been some mighty tasty Kool-Aid that Las Vegas Sands CEO Sheldon Adelson was ladling out at the Reuters Travel & Leisure Summit yesterday. Had we not been hearing it from other news sources, one wouldn't put much credence in Adelson's prediction of wider access to Macao from mainland China, mainly because his recent forecasts of what Peking would and wouldn't do have tended to be dead wrong.
Marina Bay Sands: A 28% return on investment? Sheldon says that's a lowball figure.
But what really staggered the imagination were the ROI projections Wall Street's making for Marina Bay Sands, in Singapore. Putting cash flow anywhere between a half-billion and $900 million is a scattershot figure, to say the least. But even those seemingly giddy estimates are "somewhat low," according to Sands' grand vizier. Depending on which of three reported Marina Bay budgets is the correct one, here's how the ROI range would shake out …
$3.2 billion (original): 16%-28%
$4.5 billion (interim): 11%-20%
$5.4 budget (alleged final budget): 9%-17%
Those are some extraordinarily optimistic projections for the most expensive casino megaresort in history (unless you count CityCenter as one property). But it gets better. The $743 million Sands Bethlehem project, in Pennsylvania, is going to do a 17% return on investment, according to Adelson.
Let's hope he's right, because that'll mean we're busting out of this recession something fierce. Of course, Sands saved itself a pile of money in Pennsylvania by simply deferring its contracted retail mall and hotel until an unspecified future date. But if $743 million represents not the total cost of the project but what Sands has spent on the casino alone, that $800 million Don Barden/Neil Bluhm behemoth in Pittsburgh may start to look like a paragon of frugality.
