Major IR operators scramble to Yokohama

Thursday 22nd of August 2019

The official announcement by Mayor Fumiko Hayashi that Yokohama would enter the IR race in earnest has set off a scramble among major IR operators, with Las Vegas Sands announcing that it was completely abandoning its efforts to partner with the Osaka government and Melco announcing its intention to open a Yokohama office with a new executive in charge.

Mayor Hayashi’s afternoon press conference was a national media event. She explained her decision as follows: “There are fewer guests staying overnight in our city as compared to other municipalities, and I feel a strong sense of crisis for the future. For Yokohama to leap forward, an IR is necessary.”

Las Vegas Sands Chairman and CEO Sheldon Adelson immediately released a press statement indicating that his firm was abandoning its effort to partner with Osaka and would instead aim for “Tokyo or Yokohama.”

“Consistent with our long-held strategy and our track record of success in achieving it, our company will organic growth by strongly reinvesting in our existing portfolio of properties in Macao, Singapore, and Las Vegas, reward our shareholders through our dividend and share repurchase programs and target new development opportunities that allow us to maintain our industry-leading returns on invested capital – and we think an investment in Tokyo or Yokohama gives us the best opportunity to do exactly that,” Adelson said.

Since Tokyo is not expected to join the IR race, this appears to be a de facto declaration that Sands will focus on its Yokohama bid exclusively.

Meanwhile, Melco Resorts & Entertainment Chairman and CEO Lawrence Ho also released a statement: “We are very excited to hear the news that Yokohama has announced its intention to attract an IR in the city. Yokohama is an exciting location, possessed of full range of communication systems, vitality, and a pioneering spirit. It is a very attractive venue for large, high-profile development, and Melco will placing an experienced and dedicated team in a new Yokohama office to further communicate with the region.”

It was further specified that Naoto Saito had been appointed to lead Melco’s efforts in Yokohama. Saito has entered the company at the rank of senior vice-president of Melco Japan. His background includes stints at the Industrial Bank of Japan, the Boston Consulting Group, McDonalds Japan, and Amuse, Inc., an entertainment company.

However, MGM Resorts used the opportunity to reaffirm their commitment to pursuing an integrated resort in Osaka.

"MGM Resorts remains deeply committed to pursuing an integrated resort in Osaka, Japan. We announced our 'Osaka First' strategy and have not wavered from that plan. We have always had confidence in our position, as what we will bring to Osaka is something only MGM Resorts can deliver,” said Jim Murren, chairman and CEO of MGM Resorts.

"We are also excited about our partnership with Orix, a highly respected Japanese company with a strong presence in Osaka, as we jointly pursue this venture. Together, we are working to submit our response to the 'request for concept,' and look forward to the next steps in the process."