Wynn Resorts saw its Macau operations roar back to profit in Q1, with the recovery primarily driven by a significant uptick in volume at its flagship Cotai property Wynn Palace.
Addressing investors during the company’s earnings call on Wednesday morning (Asia time), Wynn Resorts CEO Craig Billings noted the “disproportionate” volume of play returning to Wynn Palace as compared with Wynn Macau over the past few months – a trend he expects to continue at least in the short-term.
This, he explained, was largely driven by the current player mix, with rated players returning faster than non-rated and tour groups, although ongoing capex work at Wynn Macau during the March quarter also impacted those results. Wynn reported casinos revenues of US$270.7 million at Wynn Palace in Q1 compared with US$176.4 on the peninsula.
“Wynn Palace is certainly leading the charge between our two properties as the market comes back and there are two factors at play,” Billings explained.
“Everyone who follows Macau closely knows that GGR and visitation were somewhat disconnected in the initial wave (post re-opening on 8 January) in that you had a lot of dedicated players come back. Most were rated players and they weren’t coming with tour groups, they were coming as individual visitors and they disproportionately, in our business at least, ended up at Cotai. Wynn Macau historically has been more exposed to the tour group business and general unrated business, so I’m not surprised that Wynn Palace led Wynn Macau.
“The second point is that there are a number of changes we are making to Wynn Macau. The property needs to be refreshed and we are making those changes now. We started those in Q1 including some pretty significant refreshment to the east casino, which interrupted a significant numbers of pits which were effectively closed during the quarter. That also had an impact.
“As the mass market continues to recover, as more unrated play comes back to the market and more tour groups, then we’ll get the natural benefit downtown but in the interim I would expect Palace to lead Wynn Macau.”
While Billings said the impact of upgrade works on Wynn Macau, which have now moved to the property’s premium gaming salons, would be finished within the current quarter, he revealed that group-wide numbers for Wynn Macau Ltd were already showing particular strength through April and into May.
This, he said, included mass table drop during the recent May Day Golden Week holiday increasing 10% over the same holiday period in 2019, direct VIP turnover more than doubling 2019 levels – albeit aided by the move away from junkets – and tenant retail sales rising 36% over the same period four years ago.
Asked about the company’s commitment to spend MOP$16.5 billion on non-gaming investments as part of its new 10-year concession, Billings said, “We are deep into design and planning for our concession related capex commitments which we believe will help support Macau’s long-term diversification goals and be additive to our business.”
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