Wynn Resorts CEO Matt Maddox has revealed that a multi-million dollar refurbishment of its original Macau IR Wynn Macau, due for completion in late 2019, is aimed at reducing reliance on junkets and focusing on premium mass.
The company announced last year that it would spend US$100 million on upgrades at Wynn Macau, including a remodeling of its Encore Hotel rooms more non-gaming facilities.
Expanding on those plans during Wynn Resorts’ 4Q18 earnings call on Thursday, Maddox explained that it wanted its Macau peninsula property to become better aligned to capitalize on the lucrative premium mass segment, reducing its reliance on more volatile VIP.
“We realized in 2018 … that Wynn Macau is doing very well, but it was making a disproportionate share of its money from second-tier junket operators – and that’s not a place where we wanted to invest for the long term,” Maddox said.
“So we began redesigning Wynn Macau, the entire original casino and also remodeling some of the nicest suites in Macau, the Encore Tower Suites. We started that construction in July and in the fourth quarter of this year we’ll be re-launching an entirely new premium mass casino experience that’s open to the water, three new restaurants, 10,000 square feet of additional retail and a new hotel tower that wasn’t just a soft refurb of the Encore tower, but is completely redone like it’s new property.
“We’ll be effectively launching a new property at the end of this year for Wynn Macau, this focus squarely on the business that we believe in for the long term and that’s the premium mass segment.”
Disruption to normal operations caused by construction work at Wynn Macau saw the property suffer a 5.2% fall in revenue in 4Q18 to US$553 million on the back of an 18.2% decline in VIP turnover.
But Maddox said such short-term pain was all about repositioning the property for the future.
“Clearly the premium mass business is more profitable than the mid-tier junket business,” he said. “How do we position ourselves for the future and how we do that as we focus on their premium customer? It’s making the decisions about where they want to go and where they want to stay, and that’s what we’re doing at Wynn Macau.”
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