GGRAsia – Wynn Macau Ltd Labour Day hols mass, direct VIP beat 2019

Wynn Macau Ltd Labour Day hols mass, direct VIP beat 2019

May 10, 2023 Newsdesk Latest News, Macau, Top of the deck

Casino operator Wynn Macau Ltd achieved mass table drop and VIP turnover levels during the recent Labour Day holiday period that were above those recorded in 2019, prior to the onset of the Covid-19 pandemic. The information was disclosed by the company’s chief executive, Craig Billings: he added that the firm had also achieved strong April results, with average daily earnings before interest, taxation, depreciation and amortisation (EBITDA) surpassing those recorded in the first three months of the year.

“The May Golden Week holiday period was particularly strong, outperforming Golden Week 2019 in several key areas,” said Mr Billings in comments during a conference call with investment analysts on Tuesday, following Wynn Resorts Ltd’s first-quarter results announcement.

United States-based Wynn Resorts is the parent of Wynn Macau Ltd. Wynn Macau Ltd runs the Wynn Macau gaming resort on the city’s peninsula, and Wynn Palace (pictured), in the Cotai district. Mr Billings is also CEO of Wynn Resorts.

He added in his Tuesday comments, referring to the Wynn group’s Macau operations: “Our overall mass table drop during the holiday period was nearly 10 percent above 2019 Golden Week levels. Our direct VIP turnover was more than double 2019 levels… Our tenant retail sales increased 36 percent compared to Golden Week 2019 and our hotel occupancy was 95 percent.”

During the conference call, Mr Billings stated that marketwide GGR momentum in Macau had “been very impressive” in recent months, “accelerating into April”.

He added: “In April, our mass drop per day increased versus the first quarter; our direct VIP turnover per day increased meaningfully versus the first quarter; and occupancy and retail sales were very healthy.”

The Wynn group executive observed that the Macau market was “coming back much more quickly than anybody would have thought of certainly six, nine months ago”. He added that “the next couple of months, the next quarter, quarter and a half… will be telling to see what the pace and size of the recovery is.”

Wynn Palace leading, Wynn Macau under renovation

Wynn Resorts’ management pointed out during Tuesday’s conference call that results for its Macau operations had been encouraging during the first three months of 2023. “Mass table drop reached 82 percent of first quarter 2019 levels” and Wynn Macau Ltd had a GGR market share of 14 percent, said Mr Billings.

He highlighted that performance in Macau during and after the first quarter was “skewed” towards the Wynn Palace property, due to the “mix of customers that have returned to Macau in the initial reopening wave” after the city dropped most of its Covid-19-related travel restrictions in January. In addition, renovation works at the Wynn Macau property negatively impacted its performance, according to management, disrupting “significant numbers of pits” on the gaming floor.

Mr Billings added that work at Wynn Macau had started in the first three months of this year and would in likelihood still impact the Wynn Macau property’s operations in the current quarter. “There’s a number of other things that will have a longer tail, but it shouldn’t impact revenue the same way”, he said.

Questioned about the performance of direct VIP operations in the current market, Mr Billings admitted it was “a little bit too early to forecast the overall trajectory of VIP, both direct and junket”. He added that the Wynn group had “developed some incremental relationships, [and] player referral relationships outside of the traditional markets,” which had benefited direct VIP numbers, but the executive highlighted that the firm would remain cautious in extending credit to high rollers.

“What we won’t do is underwrite players that we’re not comfortable with from an asset perspective”, Mr Billings stressed.

Capex for 2023 affirmed

Management at Wynn Resorts also reaffirmed the group planned to spend between US$50 million and US$220 million in capital expenditure (capex) in Macau during the current year. The range had been announced in February: the actual amount to be spent will depend on the timing of the required approvals from the Macau authorities, said Julie Cameron-Doe, Wynn Resorts’ chief financial officer.

The investment is part of the minimum MOP17.7-billion (US$2.21-billion) spending that the group has pledged to pour into Macau over the next 10 years, as a condition of getting a fresh gaming concession. The new concession period began on January 1 and runs to the end of 2032.

“We are deep into design and planning for our concession-related capex”, said Mr Billings during the conference call, without providing further details.

Non-gaming projects for Macau previously mentioned by Wynn Resorts’ management include a new theatre with a resident show, a food hall, and a centre for events and entertainment shows.

The six Macau operators have pledged to the Macau government to spend in aggregate a minimum of MOP108.7 billion on non-gaming and exploring overseas-customer markets during the fresh concessions.

Regarding Wynn Resorts’ plan to develop a casino resort in the United Arab Emirates, in the Middle East, Mr Billings said during the conference call with analysts that financing for the “US$4-billion project” would likely be “50-percent equity, 50-percent construction-related financing, with the exact percentage to be defined”.

The scheme, to be located in Ras Al Khaimah, was announced in January last year.