US – Wynn enjoys its best ever third quarter results in Las Vegas and BostonBy Phil - 10 November 2022
With travel restrictions still hampering the Macau casino sector, Wynn Resorts saw its results propped up by record breaking third quarters at both Wynn Las Vegas and Encore Boston Harbor.
Whilst overall operating revenues were $889.7m, down $104.9m, from $994.6 million for the third quarter of 2021, operating revenues at Wynn’s Las Vegas operations and Encore Boston Harbor increased by $68.4m and $19.6m respectively. Decreases in Macau saw Wynn Palace down by $106.1m and Wynn Macau down $90.3m.
Craig Billings, CEO of Wynn Resorts, said: “Our teams at Wynn Las Vegas and Encore Boston Harbor delivered a new third-quarter record for Adjusted Property EBITDA at our combined North American properties. Their relentless focus on five-star hospitality, combined with our market-leading facilities, continue to elevate our properties above our peers as the destinations of choice for luxury guests in both Las Vegas and Massachusetts. In Macau, while COVID-related travel restrictions continued to negatively impact our results, we were pleased to experience encouraging pockets of demand during the recent October holiday period. We remain confident that the market will benefit from the return of visitation over time.”
Las Vegas also saw third quarter record EBIDTA at a $196m.
Mr Billings said: “We saw broad-based strength across casino, hotel, food and beverage and retail, all well above third quarter 2021 levels despite the difficult year-over-year comps. The comparison to third quarter 2019 is even more impressive with our EBITDA more than doubling on a 36 per cent increase in revenue.
“Our EBITDA during October was an all-time monthly record for the property. Similarly, our forward-looking indicators also remain quite strong despite well-known macro concerns as room bookings are pacing at or above pre-COVID levels on substantially higher ADRs. Near term, we expect the normal seasonal pattern to hold during the remainder of Q4, with some of the usual softness surrounding Thanksgiving, followed by a strong close to the year in the latter half of December.”
Wynn CFO Julie Cameron-Doe added of the Las Vegas business: “Q3 2022 slot handle increased 31.6 per cent year-over-year and was 72.2 per cent above Q3 2019 levels. Similarly, our table drop were up 12.5 per cent year-over-year, and was 32.4 per cent above Q3 2019 levels despite still suppressed international play during the quarter due to COVID-related travel challenges.”
In Boston Encore also had a strong quarter, generating $61m of EBITDA.
Mr Billings explained: “We saw strength across the casino with record gross gaming revenue and on the non-gaming side with record hotel revenue driven by strength in both ADR and occupancy. These trends have continued into Q4, with EBITDA per day in October, consistent with the third quarter levels. Looking ahead, we remain excited about sports betting in the Commonwealth, which is expected to kick off early next year.”
In Macau, the market continues to be challenging with market-wide GGR in the third quarter, only reaching approximately eight per cent of the third quarter of 2019 levels.
Operations at Wynn Palace and Wynn Macau were closed for a 12-day period in July 2022, in response to an outbreak of COVID-19 in Macau.
Mr Billings added: The results of operations of our Macau Operations for the third quarter of 2022 continued to be negatively impacted by certain travel-related restrictions and conditions, including COVID-19 testing and other mitigation procedures, related to the COVID-19 pandemic.. Our team has done a fantastic job controlling costs in a very challenging operating environment through a combination of decreases in payroll and fixed OpEx. As a result, despite the nearly two-week closure of casinos in the market in July, our overall EBITDA loss in the third quarter was $66m, which was a meaningful improvement from a loss of $90m in the second quarter even after adjusting for a $7m bad debt credit that benefited the results in the third quarter.
“More recently, we did see some encouraging pockets of demand during the October holiday period, particularly in our direct VIP business, where turnover was actually slightly above the comparable 2019 holiday period; and in our retail business, where tenant sales reached 74% of 2019 levels. This once again highlights the strong demand for Macau’s unique tourism offering during periods when the market is accessible,” he added. In terms of Wynn Marjan, the future integrated resort in the UAE, Mr Billings detailed: “We’re in the late stages of programming for the resort. Given the pristine beach setting and the somewhat nature of a man-made island, we have an incredible canvas with which to work and design something truly unique. I expect we will share renderings, programming and plans more publicly in early 2023. I also expect we will be driving piles for the foundation of the property by the middle of next year. We look forward to sharing more details with you about this exciting project in due course.”