Macao revenue decline results in more losses for Wynn Resorts
Executives with Wynn Resorts Ltd. on Tuesday said the company’s three Macao resorts are burning through $1 million in cash a day as the company continues to struggle through shutdowns and border closures in the Chinese special administrative region.
Wynn reported a second-quarter loss of $213.4 million, even after record quarterly results in Las Vegas and the best second-quarter performance ever at Encore Boston Harbor.
Health restrictions and border closures resulting from the COVID-19 pandemic in Macao have negatively affected all 41 casinos operating there for more than a year.
Revenue for the quarter was down 8.2 percent from a year ago. The company reported a loss of $185.3 million, $1.14 a share, on revenue of $908.8 million for the quarter that ended June 30. In the same quarter a year ago, Wynn reported a loss of $173.4 million, $1.15 a share, on revenue of $990.1 million.
In a call with investors, Wynn executives said they are still confident in the Macao market and are in the last stages of preparing for relicensing there. The company must respond to a request for proposals by Sept. 14 before entering a negotiation process to secure a 10-year license that would take effect Jan. 1.
Wynn CEO Craig Billings said Wynn and Encore Las Vegas continue to perform at high levels and Wynn Las Vegas President Brian Gullbrants said international arrivals are rebounding.
“We’ve definitely seen a pickup in the international clientele, both in the gaming and nongaming side of our business,” Gullbrants said in response to a question from an investor.
“Obviously Canada and Mexico were the first ones to pop up. We’re seeing great traction in the U.K. right now and the lift out of London is about 106 percent of what it was in 2019 pre-COVID levels,” he said. “It means the U.K. is back. The biggest opportunity for us moving forward is obviously China. It’s anemic at this point. We are seeing other Asian business coming back, but not to the extent we’d like. I’m optimistic about the future and we have a lot of upside.”
Wynn officials said Las Vegas was able to maintain an average daily room rate of $460 a night, well above the Las Vegas average.
The company also is optimistic about getting a revenue boost in Boston, where the Massachusetts Legislature has approved sports wagering and the company already has a sportsbook built at Encore Boston Harbor. The Massachusetts Gaming Commission is in the process of drafting sports-wagering regulations.
Still. Macao continues to be blemish to Wynn’s bottom line, but Billings is confident the company will be relicensed and that crowds will return there.
“We understand and appreciate what Macao is trying to achieve, diversifying the market in terms of the geographic origin of visitors and their motivations to visit,” Billings told investors. “It’s not a process that happens overnight. In Vegas, it took many years and it was a concerted effort by both government and business. We were instrumental in leading that change here in Vegas and we will, of course, play our part in Macao’s journey to do the same.”
Wynn Resorts shares, traded on the Nasdaq exchange, closed up 14 cents, 0.2 percent, to $66.03 a share in below-average volume on Tuesday. Those gains were retreating in after-hours trading.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.