Wynn Resorts’ second-quarter earnings call was all about records set in Las Vegas and Boston, with CEO Craig Billings insisting that the company’s Q2 strength continued to start the third quarter and he expects a strong fall.
The good news about the U.S. contrasted with the dismal showing in Macau, where the pandemic has perpetuated a a stop-and-start response, with shutdowns that have vastly curtailed revenue. Despite that gloomy news, Wynn touted the planning process for its casino-resort project in the UAE.
Wynn Las Vegas reported an all-time quarterly record of $227 million in adjusted earnings, with broad-based strength across the casino, hotel, food and beverage, and retail, all well above second-quarter 2019 levels, Billings told Wall Street analysts.
The adjusted earnings were more than 40% higher than its previous Strip record set in 2014.
Wynn Las Vegas reported records in adjusted earning margins, slot handle, non-baccarat table win, hotel revenue, and revenue at restaurants and bars.
“Our performance in Las Vegas speaks for itself,” Billings said. “Looking ahead, while we’re keenly aware of the macro environment and uncertainty facing the economy, we’ve been encouraged by the strength we’ve experienced over the past several quarters that has continued into the third quarter. Our forward bookings continue to pace at pre-COVID levels on a substantially higher average daily rate.”
Billings said the start of the third quarter was strong with 91% hotel occupancy in July. That’s expected to decline to the mid-to-high 80s in August, the normal pattern before rising back into the low 90s in September as groups return in large numbers, he said.
“While we haven’t seen any noticeable sign of weakness in our current operations or outlook, we’re watching this closely,” Billings said.
Encore Boston reported $64 million in adjusted earnings, a second-quarter record. Billings said the strength was seen across the casino with records in gaming revenue and non-gaming hotel revenue and strong occupancy.
“That continued into the third quarter similar to Las Vegas and we’ve yet to see signs of a slowdown,” Billings said.
He also expressed excitement for sports betting being enacted in Massachusetts. A bill is before Gov. Charlie Baker for his signature. The bill imposes a 20% tax on mobile wagering and 15% on in-person sports wagering.
Encore is finalizing plans for a development across the street that would create additional parking, along with food and beverage and entertainment offerings.
Macau continues to be difficult, with gross gaming revenue in July for the marketplace only 2% of July 2019 levels, Billings said.
Wynn had a $90 million loss in adjusted earnings in the second quarter as reflected in a reduction in drop, hotel occupancy, and adjusted earnings. The adjusted-earnings loss was $900,000 a day.
With a two-week closure in July, it’s comparable to a $1 million loss per day, Billings said.
Despite that outlook, he said they expect a comeback when restrictions are eased and travel returns, thanks to a lot of pent-up demand in Asia.
In January, Wynn announced plans for an integrated resort with gaming facilities on Al Marjan Island in Ras Al Khaimah, a popular tourist destination in the United Arab Emirates. It’s a move that will extend the brand to the Middle East and Europe.
The resort, in addition to a casino, includes a 1,000-plus-room hotel, high-end shopping mall, state-of-the-art meeting and convention facility, spa, several restaurants and lounges, and entertainment.
“Our design and programming for the project in the are coming along,” Billings said. “The project along a beautiful white-sand beach will contain a 200,000-square-foot casino, extensive food and beverage, and a number of forms of entertainment. The more time I spend on this project, the more I’m convinced of our ability to build a robust gaming and non-gaming business.”
