Wynn Resorts CEO Matt Maddox says he expects Macau’s mass and premium mass segments to return stronger than ever before once recent setbacks from COVID-19 outbreaks across mainland China ease.
Maddox was asked about Macau’s status during the company’s 2Q21 earnings call on Thursday morning (Asia time) in light of mass COVID testing blitzes currently underway in both Macau and Zhuhai. While the SAR has reacted strongly to the news that four locals have this week tested positive – the first community transmissions in 18 months – the Wynn boss said strong volumes experienced in April and May indicate particularly strong pent-up demand within the region.
“Macau has been continuously two steps forward, one step back,” he said.
“On our 1Q earnings call we spoke about the strength we had just experienced in Golden Week, where we achieved US$3 million in EBITDA each day during that period. That indicates there is real pent-up demand in the region to go to Macau.
“Clearly there has been another outbreak that we’ve all been reading about and the restrictions have stepped up quite significantly in the past few days.”
Asked what recovery might look like, Maddox said, “It’s hard to predict but when we witnessed what happened with Golden Week in May, it just shows that the pent-up demand is very real and I think everywhere around the world the demand for what we do is stronger than it’s ever been.
“Clearly [the VIP segment] won’t come roaring back to what it was but I fully anticipate that what you’ll see on the premium mass and mass side will be stronger than it’s ever been.”
Maddox noted that VIP is likely to remain subdued amid various headwinds facing the sector, although many of those customers are converting to direct customers. As such, “the overall market and high-end customers I think will be quite robust as the green light comes on.”
Such confidence is reflected, he added, in retail revenues that have grown by between 50% and 70% at Wynn Palace, with Wynn management revealing the LVMH Group (Louis Vuitton Moët Hennessy) was currently outfitting nine new luxury outlets at Wynn’s Macau properties.
Maddox said he was encouraged by the ability of Macau and mainland China to react to recent outbreaks.
“The good thing is that the Macau government acts decisively and quickly and has been able to remedy these things within a matter of weeks,” he said.
“While we don’t know how long this is going to last, the experience thus far with the decisive actions and ability to test millions of people in a matter of days gives us great hope that this will continue to pass.
“What we’re really focused on is the accelerating vaccination rate in the region and we’re quite hopeful that the rate will continue to accelerate so by the end of this year we will start to see a more stabilized operating environment.”
RelatedPosts
