Operator News
China – Huge increase at Wynn Palace offsets domestic declines for Wynn
By Phil - 24 January 2018
A huge improvement at Wynn Palace in Macau where GGR has surged by 65.6 per cent to US$693.4m has helped Wynn Resorts to revenues of $1.69bn for the fourth quarter of 2017, an increase of 29.9 per cent.
The $274.7m increase at Wynn Palace and an increase of $120.2m from Wynn Macau, was partially offset by a decrease of $6.2m from the company’s Las Vegas operations.
For the full year, net revenues were $6.31bnin 2017, an increase of 41.2 per cent, or $1.84 billion, from $4.47 billion for the same period of 2016.
Casino revenues from Wynn Palace in the fourth quarter were US$648.6m, a 73.8 per cent increase from the US$373.2m last fourth quarter. In the VIP segment, table games turnover grew 57.1 per cent to US$16.23bn, with table game win aiding the company’s bottom line at 3.02 per cent. Table revenue for mass gaming was US$1.12bn, marking a 55.1 per cent increase year-on-year. Slot revenue was up by 72.3 per cent to US$920.6m.
Wynn Resorts Chairman Steve Wynn said: “We have said for the past two years that as the Macau market experienced some vicissitude that the fundamentals in China, as in terms of its business opportunity for our company, were profoundly simple and uncomplicated. I stress to people who were interested in our company and who invest in gaming that the Macau market is still only touching a tiny percentage of the potential market that’s there.
“We are seeing midweek business in the mass casino in the $3mand $4m a day level during the midweek periods,” he added. “So the depth and the foundational strength of that market is real. We’ve always been bullish about Macau. The Wall Street and the investment community has had different moods about this.
“We’re told that MGM, our neighbour, is going to finally commence operations in the next week or two, at least partially, which will remove some of the obstacles that separate them from us,” he added. “Unfortunately, our neighbour on the other side, SJM is still months away, but the Monorail is coming along.”
Morgan Stanley analysts added: “Wynn’s ability to continue to ramp its Wynn Palace property is impressive. 1Q18 EBITDA is tracking above 4Q17 and Chinese New Year outlook seems strong. Wynn is working on a plan to develop Phase 2 of Cotai with 11 acres of available land, which should continue to drive future growth.”
“Mass table productivity rose significantly. We believe Palace mass and slot revenue/unit/day, at US$14,600 and US$608 respectively, were probably the highest among all casinos in Macau in 4Q17.”
Casino revenues from our Las Vegas Operations were $142.7m for the fourth quarter of 2017, a 14.1 per cent decrease from $166m for the same period of 2016.
Mr Wynn added that the company would be adding an extra 2,000 to 3,000 rooms in Las Vegas by building a new hotel tower on the former Alon site across the street from the Wynn and Encore properties. Wynn bought the land for $336m, last December, at the old side of the Frontier Hotel.
It will be linked to both hotels by an ‘air-conditioned umbilical hallway,’ Wynn said.
The new development is a completely separate project from Paradise Lake, comprising a hotel, convention center and lake resort, behind its current properties.
“We’re creating a new kind of experience that is representing the modern era,” Mr Wynn explained. “I’ve been thinking about it for a long time and sketching with it. I don’t think the design development period is going to be very long on the Wynn West Property. We’re going to attempt in the next four to five months to have renderings that show the entire development.
