Wynn Resorts CEO Matt Maddox has described the impact of junket operations on the company’s Macau recovery over the last month as “very real” with turnover already back to 30% of pre-COVID levels.
Rejecting suggestions that the junket business is on its last legs due to a recent crackdown by mainland China on underground banking channels, Maddox told analysts during the company’s 3Q20 earnings call Friday morning (Macau time) that volumes have been stronger than expected through October.
“From a revenue standpoint in October, mass drop on the table game side was 40% of pre-COVID levels and on the junket side, which everyone is talking about, we saw between 25% and 30% of turnover compared to pre-COVID levels in the junket space,” Maddox said, noting that Wynn Macau Ltd had returned to EBITDA positive over the past month.
“Clearly [the junket industry] is changing and it will be smaller than it was before, but it’s still very real. That business is not dead as some people like to say.
“The industry will continue to consolidate into the larger operators and we will continue to participate in it.”
According to Maddox, Wynn recorded EBITDA of around US$6 million in October, having seen an EBITDA loss of US$40 million as recently as August, following the resumption of the Individual Visit Scheme across mainland China.
Likewise, customer traffic has continued to grow with Wynn Palace welcoming around 6,000 visitors per day between 2 and 4 November versus pre-COVID levels of around 18,000 visitors per day. The Cotai property had previously struggled to gain any traction during the third quarter with operating revenues of just US$15.7 million – less than a third of its sister property on the Macau peninsula.
Maddox also noted that retail sales in Macau were flat year-on-year in October with its top five stores enjoying 25% more business than during the same month in 2019.
“There is real pent-up consumer demand,” Maddox said.
“We’re feeling very good about what we’re seeing out of premium segments in Macau and we are optimistic about the way [the pandemic] has been handled there. It doesn’t appear to be one step forward then one step back, it’s been a very deliberate approach, very thoughtful, and it feels like the market is going to continue to get better.
“I don’t know at what pace, but the overall mood and trajectory is quite good.”
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