Wynn’s CEO seeing reopening hope
Employees to get pay through end of month
Wynn Resorts Ltd.’s CEO said it’s likely the company’s two Las Vegas properties could open later this month.
With the first phase of the state’s reopening plan set to start next week, CEO Matt Maddox said he believes Wynn Las Vegas and Encore could reopen as part of phase two, assuming the environment is safe for customers and employees. He previously had said he hoped to reopen by Memorial Day.
“Given all the occupancy limitations that we will have self-imposed, it could very likely be both of the assets open, but with occupancy restrictions,” Maddox said on an earnings call Wednesday. “We do anticipate, as we get closer to an opening weeks from now, that there will be pent-up demand in the leisure segment.”
The casino operator, which operates resort-casinos in Las Vegas, Massachusetts and the Chinese territory of Macao, reported
$953.7 million in revenue for the first quarter of 2020, down 42 percent from the same period last year.
Extending employee pay
Wynn’s Las Vegas properties, have been closed since March 17. Encore Boston Harbor has been shut down since March 15. And all casinos in Macao, including Wynn’s, were forced
to shut down for 15 days in February.
The company had $2.89 billion in cash and cash equivalent as of March 31. Under current conditions — no revenue and full pay for employees in the U.S. — Wynn should have enough liquidity to last until at least the third quarter of 2021. Under “worse-case” conditions, the company is burning about $7.8 million globally every day.
Despite the large volumes of cash burn, Maddox revealed Wednesday that Wynn would continue paying all salaried, hourly and part-time
U.S. employees through the end of the month, including tip compliance rate or distributed tips or tokes for tipped employees. The company previously had said it would pay the more than 15,000 Wynn and Encore employees through May 15.
A Wednesday statement said
Wynn is investing close to $250 million
Revenue
2020:
2019:
Change: ▼
Net income/(loss)
2020:
2019:
Change:
Earnings/(loss) per share Q1 2020:
Q1 2019:
Change:
in payroll expense.
Reopening plans
When Wynn’s Las Vegas properties do reopen their doors, guests can expect operations to look different.
Last month, the company laid out an updated health and sanitation plan, which includes the use of thermal cameras, altered floor layouts and masks worn by all employees.
Maddox added Wednesday that
“large mass gathering places,” such as nightclubs, convention areas and shows, will not be opening immediately, but he does want to open “most” of the properties’ restaurants.
While the company usually focuses on the premium market, Maddox warned that Wynn’s base is going to be nearly “nonexistent in the first few months after we reopen.” Instead, they expect to see pent-up demand from the leisure market, particularly from the drive-in markets and value-oriented casino customers.
Demand will be low, but he said he also expects to see low supply among operators.
“I don’t know how many resorts are going to reopen (early on), but it’s certainly not even close to the entire Las Vegas Strip,” Maddox said. “It’ll be a slow ramp.”
Wynn shares closed down 0.5 percent Wednesday, to $79.25 a share.
Contact Bailey Schulz or bschulz@ reviewjournal.com or 702-383-0233. Follow @bailey_schulz on Twitter.