Casino operator Wynn Macau Ltd has seen strong market comeback extend into the fourth quarter, with October mass-market table games drop 124 percent that of pre-pandemic trading in October 2019. That is according to Craig Billings, group chief executive of Wynn Resorts Ltd, the parent of Wynn Macau Ltd.
“The strength in our business has continued in the fourth quarter with mass drop in October, 24 percent above October 2019, 98 percent hotel occupancy, and healthy tenant retail sales,” said the group CEO on the parent’s earnings call following the third-quarter results on Thursday.
The first six days of October included the major portion of this year’s autumn Golden Week, an important holiday in mainland China, the main feeder market for Macau operators.
Wynn Macau Ltd runs Wynn Macau on the city’s peninsula, and Wynn Palace (pictured) in the newer Cotai resort district.
Even during the third quarter, Wynn Macau Ltd saw “broad-based strength” across its properties, “with several key areas of the business trending well-above 2019 levels,” stated Mr Billings on Thursday’s call.
“In the casino, mass table drop increased 19 percent versus third quarter 2019, and direct VIP turnover was 13 percent above third quarter 2019,” he added.
The CEO also mentioned one of the Macau business’s initial “concession-related capital” projects.
Mr Billings said it was a “collaboration” with the team behind Illuminarium – a 4K laser-based entertainment offering already present in markets including Las Vegas, Nevada, home base of Wynn Resorts.
The CEO said the offering in Macau would involve a “mesmerising, multimedia exhibit space,” and would “open before the end of the year”.
He added: “We’re also deep into design and planning for our other concession-related capital expenditure commitments, including our destination food hall, the new event and entertainment centre and a unique spectacle show”.
Wynn Macau Ltd is pledged to spend at least MOP17.7 billion (US$2.20 billion) over the course of a decade-long Macau concession that began on January 1. Of that, MOP16.5 billion – or about 93.2 percent – is to be for expanding international markets and non-gaming investments.
Macau 4Q, progress in UAE
Mr Billings was asked on Thursday’s call about some detail of early fourth-quarter operations. He observed that Wynn Palace’s October adjusted earnings before interest, taxation, depreciation, and amortisation (EBITDA) per day had exceeded October 2019. The Wynn Macau property had “healthy results but lower market share in October versus 2019”.
That was linked to some previously-discussed remodelling work at the Wynn Macau property, the CEO noted.
“Disruption did tail off in the early portion of this quarter. There were some trailing works, including some work that was done in some of the high-end salon areas that took a little bit longer,” he added.
Mr Billings was also asked about a recurring theme of Macau-operator third quarter earnings calls: the cost of doing casino business in terms of “player reinvestment” rates.
He stated: “Reinvestment in that market can bounce around for us anyway. I can’t really speak to the rest of the market, but it can bounce around 50 basis points, 60 basis points, 70 basis points in any given point in time, but I haven’t seen anything that is irrational or substantive.”
The group CEO also spoke on the call about its United Arab Emirates project, Wynn Al Marjan Island, in Ras Al Khaimah.
“Much of the hotel tower foundation is complete, with nearly all of the piles supporting the 1,500 room tower in the ground,” he stated.
While there has been public discussion of legalising casino business across the whole of the UAE, a federal nation, Mr Billings said he thought it “highly unlikely that every Emirate will ultimately avail themselves of the right to host an integrated resort.”
He said reasons included “cultural nuances”, “population density”, and “varying degrees of need for the additional visitation”.
The CEO stated that the necessary regulations relating to gaming were currently “in draft form”.
“We expect the regulations will be passed. And then… the licensing process is a two-step process. The issuance of a provisional licence; and then a final licence, and I would expect that that would happen soon,” he added.
Mr Billings added referring to the wider UAE market, where MGM Resorts International also has hopes of adding a casino to a Dubai hotel scheme: “We all know the advantages of being first as we have seen in other markets. After that, it may be a duopoly or an oligopoly of three.”
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