Turmoil in Hong Kong is starting to affect visitation to Macao, but executives with Wynn Resorts Ltd. believe it probably will be a short-term impact on the world’s busiest casino market.
Since April, protesters have taken to the streets of Hong Kong to demonstrate against an extradition bill ordered by the Chinese central government. Four people have died in the protests.
“Clearly in July, there has been some softness in VIP (business), and when you have hundreds of flights canceled out of Hong Kong and some reluctance to travel, I do think that is impacting the premium end of the business,” Wynn Resorts CEO Matt Maddox told analysts on a conference call to discuss the company’s second-quarter earnings.
“However, that, to me, feels very temporary and has really nothing to do with our business and everything to do with what’s going on in the region,” Maddox said.
Ian Coughlan, president of Wynn Macau, said he expects disruptions to continue.
“There’s been disruption to people movement between Hong Kong and Macao, and that looks like it’s going to continue for the next few weeks at least.”
Maddox said he viewed fluctuating revenue in Macao “as a data point and not a trend.”
Domestically, Wynn Resorts reported favorable results for the quarter thanks to the June 23 opening of Encore Boston Harbor.
“We’ve targeted a 12-month ramp-up, and what we’re doing is making sure we’re not going to get into a promotional war with our competitors who are quite nervous about Encore Boston Harbor,” Maddox said. “So we’re reacting to what our slot customers are telling us, we’re looking at understanding what promotions work and how points translate to comp dollars and what prizes and gifts are working.”
Encore Boston Harbor President Robert DeSalvio said his team is working to sign up as many people as possible to the company’s loyalty program to boost the company’s database.
Maddox also said the company is evaluating several proposals for 11 acres near the property to determine what would be the best nongaming amenity to enhance visitation and play at the Encore casino. The company is considering third-party partnerships for an entertainment venue, an arena or outdoor retail district, or possibly lower-tier hotel rooms.
Wynn Resorts Ltd.
Second-quarter revenue and earnings for Las Vegas-based Wynn Resorts Ltd., which operates Wynn Las Vegas and Encore Las Vegas, three properties in Macau, and Encore Boston Harbor. (Nasdaq: WYNN)
2Q 2019: $1.658 billion
2Q 2018: $1.605 billion
2Q 2019: $142.2 million
2Q 2018: $205.3 million
Earnings per share
2Q 2019: 88 cents
2Q 2018: $1.44