Wynn Resorts President and CEO Matt Maddox says the company won’t be turning away from its traditional high-end focus in favor of Macau’s growing mass market, despite significant declines in the VIP and premium mass segments in 2Q19.
Instead, Maddox revealed the recently announced Phase I expansion of flagship Macau integrated resort, Wynn Palace, was firmly targeted at the premium mass segment – one he insists is “not going away.”
As reported by Inside Asian Gaming this week, VIP turnover at Wynn Palace declined 4.6% year-on-year in 2Q19 while a 5.8% increase in mass was lighter than expected, according to Bernstein analysts, “due to softness in the higher-end of the premium mass segment, which is highly correlated to VIP.
“High end players are showing up, but spending less time at the tables and have lower effective buy-in amounts,“ Bernstein explained. “The ramp-up and marketing effort of Melco at City of Dreams/Morpheus has also likely taken some premium mass share from Wynn Palace.”
Speaking during Wynn’s 2Q19 earnings call early Wednesday, Maddox said, “I’d just like to again remind everybody, the premium business is not going away. We’ve all seen this over many, many years, in 2016, in 2012, when it artificially contracts for a very short period of time and people focus on core and then it expands quite rapidly.
“So what we’re not going to do is change who we are. We are the premium operator and we will continue to be the premium operator.”
While the Wynn Palace expansion will include a number of non-gaming features aimed at appealing to Macau’s growing mass market, Maddox said its primary purpose was to boost the property’s premium mass exposure.
“Wynn Palace needs more than 1,700 hotel rooms,” he said. “I think you can see from some of our competitors that have just ramped up their new quite nice hotel product, what that has done to their bottom line. Our hotel is full and on the weekends we’re turning away customers that we do not want to be turning away and we know that they will spend more time and more money with us if they’re staying with us.
“The Crystal Pavilion (part of the Wynn Palace expansion plan) is going to attract lots of customers, but also as we see out of Cotai, families travel with customers.
“We think the Crystal Pavilion project will be attractive to a much broader audience … the premium mass will be in the hotel and we think we will get significant incremental visitation from the core mass with the project.”
RelatedPosts
