Steve Wynn says urban hotels will focus on luxury over gaming
A record quarter for revenue in Macau and a 6.6 percent increase in Las Vegas lifted Wynn Resorts to a 44.4 percent increase in first-quarter earnings for the Las Vegas-based casino company.
But Chairman Steve Wynn preferred to talk about what’s on the company’s horizon, with construction underway on Macau’s Cotai Strip and proposals in place for “Urban Wynn” hotels in Boston, Philadelphia and Toronto.
The company reported earnings of $203 million, $2 per share, on revenue of $1.38 billion for the quarter that ended March 31. For the same quarter a year earlier, the company reported earnings of $140.6 million, $1.23 a share, on revenue of $1.31 billion.
Wynn told analysts in a conference call that his company is building a model of a property under construction on Macau’s Cotai Strip “because we want to experience our hotels before our guests do and if we make a mistake, we can fix it before it’s cast in concrete.”
He offered more details of the entrance to the Cotai property, which will be located on a light-rail stop and include an aerial tram with smoke-breathing dragon gondolas to transport guests over a lake to the hotel.
“The game is being played on a very high level, and the competition is keeping us on our toes,” Wynn said of the new Macau development, which the company is hoping will be open for Chinese New Year in 2016. “They’re triple-smart people.”
Wynn’s team also is in a competitive process to build urban hotels in Boston and Philadelphia. The company is expected to learn early next month whether Toronto will seek competitive bids to build an integrated resort there.
Wynn said he wanted to emphasize that the Urban Wynn concept would be luxury hotels and nothing like some of the urban casinos that populate the region.
“Slot machines and blackjack tables have no power at all,” Wynn told analysts. “What we are not building is a box of slots. We’re building a beautiful hotel that just happens to have a gaming room in the back.”
Wynn is among six developers competing to build in Philadelphia. Last month, Wynn unveiled plans for a $1 billion resort in Everett, Mass., on the shores of the Mystic River.
Wynn said he envisions his properties will focus on dining, shopping and convention amenities. But he added the level of quality he envisions doesn’t make economic sense without an attached casino.
Casinos and luxury amenities were the difference-makers for Macau and Las Vegas in the first quarter.
Wynn’s two Macau properties — like in Las Vegas, there’s a Wynn and an Encore — generated $992.1 million in the quarter. Table win per day in Macau was $25,550, a 5 percent increase over the 2012 quarter, while slot machine win averaged $809 a day, a 7.1 percent decline from last year.
The average daily room rate in Macau was $315 a night, down from $324 last year, and the properties had a 93.8 percent occupancy rate, up 2.5 percentage points from last year.
By comparison, Wynn Las Vegas generated net revenue of $386.6 million for the quarter. Table win per day in Las Vegas was $8,519, up 14.6 percent from a year ago. Slot machine win averaged $215 a day, 8.6 percent higher than last year.
The average daily room rate in Las Vegas was $258 a night, up from $255 a year ago, and the properties had an 82.9 percent occupancy rate, up 3.6 percentage points from last year.
Wynn said he is more comfortable designing hotels than websites, and he believes opportunities for online gaming are “murky.”
“I’ve often thought this whole subject of online gaming was getting everybody jazzed up, but it’s difficult to distinguish yourself online,” Wynn said. “We’ll have our oar in the water, but I don’t know how to make an experience on a computer screen as unforgettable as an experience in a luxury hotel.”