Wynn Resorts CEO Craig Billings told Wall Street analysts Tuesday that the company’s planned resort in the United Arab Emirates is more like its Las Vegas resorts, with the importance of non-gaming amenities, than its properties in Macau and Boston.
In late April, Wynn announced the name Wynn Al Marjan Island for the $3.9 billion integrated resort in Ras Al Khaimah in the UAE. It also unveiled the vision of the beachfront resort under development by local partners Marjan LLC and RAK Hospitality Holding. The project will be funded with debt and partner equity contributions with 40% from Wynn Resorts and 60% from partners.
Foundation construction work began on site earlier this year, with plans to open in early 2027.
“The resort will generate between $450 million and $600 million of steady-state EBITDAR,” Billings said during a first-quarter earnings call. “The combination of our 40% equity ownership in the project, along with our management and license fees, will drive a healthy ROI for Wynn Resorts shareholders.”
Wynn projects $300,000 to $400,000 of annual EBITDAR per room for the 1,500-room resort.
The resort will be similar in size to Wynn Palace in Macau, featuring 5.6 million total square feet, 120,000 square feet of luxury retail space, 100,000 square feet of meeting space, a casino, 24 dining outlets and lounges, spa, events center, theater hosting a unique production show, and other amenities, all on a 115-acre site that provides optionality on long-term development.
This will mark the first gaming property in the UAE.
“The market in Dubai from a non-gaming perspective is incredibly healthy,” Billings said. “If you look at (average daily room rate) and spend on food, beverage, and retail, it’s tremendous. The more time we spend there, the more the business looks like Las Vegas business than Macau or Boston, which are primarily gaming-centric. We think this will be a healthy balance of gaming and non-gaming that will allow us to provide a full and high-quality experience and generate very healthy returns.”
Billings said when it comes to international travel to Las Vegas, Wynn properties haven’t returned to a pre-COVID level of visitation. He called it a geography-by-geography question.
“Latin America started to return early,” Billings said. “Europe has started to come back. There’re certainly opportunities internationally. As for China and mainland Chinese guests, we don’t know yet, because it’s very early there. We’ll see how that plays out. International is starting to trickle back and that will be a tailwind as we move through 2023.”
Brian Gullbrants, chief operating officer of Wynn North America, said group business has returned to Wynn Las Vegas by surpassing 2019 levels. During the first quarter, Wynn had the best convention revenue in history, which helped drive a record quarter for adjusted earnings.
“Looking forward, the group business is solid,” Gullbrants. “We’re pacing toward record group room nights for this year with very strong ADRs. Right now, 2024 is actually pacing ahead of what we think will be a record 2023. We don’t see any signs of softening yet, but we’ll react if we have to.”
Billings said people keep waiting “for the shoe to drop in Vegas,” but it hasn’t to date.
In discussing Macau, Billings said there “was a tremendous amount of notice about the market” during the first quarter. Wynn had competitors with rooms out of commission and there was hold volatility. The market is growing month over month, and that creates noise, he said.
“The market is coming back much more quickly than anybody would have thought of six to nine months ago,” Billings said. “It’s incredible to see. The margin profile of the businesses across Macau looks pretty strong, which would indicate reinvestment rates are relatively disciplined. Overall, the behavior in the market is quite rational. The next quarter and quarter and a half will be telling to see the pace and size of the recovery. Who could imagine that we’re run-rating $22 billion of gross gaming revenue? For us, if you roll the business forward and do your modeling, what you’ll see is at $26.5 billion of GGR, our combined properties start to produce EBITDAR close to what they produced in 2019, which is unbelievable. If you see the market continue to gain momentum, I think you’ll see the concessionaires behave relatively rationally.”
