Macau’s free fall taking Wynn Resorts with it
f you were to ask me, since we’re making forwardlooking statements, what will the second quarter look like in Las Vegas? Weak. Do you hear me? Weak. So I’m trying to lower expectations here. This notion of a big recovery is a complete dream. I don’t think Las Vegas is experiencing a great recovery.”
— Wynn Resorts Ltd. Chairman Steve Wynn, April 28, 2015
Maybe Steve Wynn confused Las Vegas with Macau.
After all, in 2010 Wynn talked about moving his corporate headquarters from Las Vegas to the Chinese special administrative region before abandoning the idea.
Today, Macau is in free fall and it’s taking Wynn Resorts along for the ride.
Gaming revenue in Macau has plunged more than 37 percent since last June. Wynn Resorts stock on Monday closed below $100 per share for the first time since December 2010 after Macau reported its 12th straight monthly dip. The stock bounced back to $100.10 on Tuesday. The Strip is not the issue. Las Vegas had its best April in eight years and expects to report robust tourism figures for May.
“Wynn stands out as the most controversial name within our gaming coverage universe,” Deutsche Bank gaming analyst Carlo Santarelli said. “While the stock underperformance, brand strength, and relative mediumterm growth prospects appeal to us, we acknowledge the challenges presented by the Macau market.”
In 2014, Wynn Resorts drew 70 percent of its revenue from its two Macau casinos. The company is spending $4 billion to build Wynn Palace on the Cotai Strip, which is expected to open in 2016. Wynn Resorts is also developing a $1.7 billion hotel-casino near Boston.
No one disagrees on Steve Wynn’s place in Las Vegas history. He created the Golden Nugget and developed Bellagio, Treasure Island and The Mirage before selling Mirage Resorts to MGM Grand in 1999.
Wynn’s two Strip resorts, Wynn Las Vegas and Encore, cater to a high-end market. MGM Resorts International and Caesars Entertainment
Strip revenue mostly non-gaming