Former Wynn Resorts Ltd. Chairman and CEO Steve Wynn said the rebound of airline service to Las Vegas will be critical to the city once casinos reopen and that companies with properties in Macao will have an edge on their competitors.
Wynn, in what’s believed to be his first public comments about the gaming industry since he left Wynn Resorts in early 2018, spoke with Fox Business anchor Maria Bartiromo on Tuesday.
“For Las Vegas, the first hurdle is the airlines,” Wynn said in a 10-minute interview. “We’ve got to make sure the service that has supported those (150,000) rooms on the Strip that the airport is up to speed. Otherwise, people will only be able to drive from California.
“Assuming that we get lift from the airlines, I know that they’re (the resorts) planning to have separation at the tables, even having some (clear plastic) barricades. They’ll be using gloves, they’ll be using masks. They’re going to take people’s temperatures. They’re going to be using all the common-sense defenses that have been promulgated to the public by the government. And I know they’ve got the staff to do that.”
Wynn said companies that have operations in Macao — Wynn Resorts, Las Vegas Sands Corp. and MGM Resorts International — should have an advantage over their Las Vegas competitors because he expects Macao to rebound faster than Las Vegas. The problem in Macao now, he said, is that border crossings have been closed, prohibiting Chinese gamblers from visiting.
Brendan Bussmann, director of government affairs for Las Vegas-based Global Market Advisors, LLC, also noted the challenges faced in Macao.
“While Macao may be open and their rate of COVID occurrences have been at or near zero for 30-plus days, until that border opens up, Macao will still be struggling along,” Bussmann added in a separate interview with the Review-Journal on Wednesday.
“I think we’ll see really depressing May numbers next month, but there is pent-up demand over in China and once you’re able to go over from Guangdong and even Hong Kong when those restrictions are lifted, I’ll think you’ll see Macao come back fairly quickly.”
Wynn noted that transportation is not a problem because 50 million people live within easy driving distance of Macao. He said that “within 300 meters of Macao” in Guangzhou is an amusement park where 20,000 people arrived when it reopened unhindered because it was on the Chinese side of the border.
Advantage of Macao
“During the recession between ’08 and ’10, we used Chinese money to build 2,000 rooms and we never laid off one human being,” Wynn said. “Because of China, we never had a layoff at Wynn. As a matter of fact, during my time, we never had a layoff, period. But this time, opening China, which I think is going to happen, Macao will bounce back very rapidly, which will benefit the Nevada hotels that have operations there.”
Wynn referred to the Las Vegas-based company that bears his name as “my company,” even though he stepped down as chairman and CEO in February 2018 and divested his financial interests in the company a month later. He left after media reports alleging sexual harassment of several female Wynn employees. Wynn has denied ever harassing anyone, blaming the reports on his former wife, Elaine Wynn, who has denied any connection to the reports.
Several top Wynn executives also eventually stepped down and a major transformation of the company’s board of directors brought in three women and well-respected industry leader Phil Satre as chairman.
Representatives of Wynn Resorts had no comment on Steve Wynn’s comments in the interview. Efforts to reach Steve Wynn directly were unsuccessful.
Wynn, now living in Palm Beach, Florida, with his wife, Andrea, said he has seen pictures of Las Vegas on television and has spoken with friends there in telephone conversations who say it is “eerie and depressing and completely knocking them out.”
Challenge of reopening
Wynn said the reopening process will be challenging, not because resort workers won’t know what to do but because it’s difficult to gauge how much demand there will be.
“How to take care of them is not a mystery,” he said. “I think all of us in business, large ones and small ones, have enough guidelines on masks and separation and testing yourself and if you’re exposed to stay home. That’s not the hard part. What we’re facing now is the complicated logistics, the choreography of reopening, for any business with a large employment base. I think that’s going to be the challenge in Nevada. A lot of smart people are working on it. I know at Wynn Resorts, the leadership is outstanding and they’re providing the leadership for the Strip to figure out how to do this properly.
“If you open part of the hotel, which employees do you bring back to work? If you open the hotel, how many of the restaurants do you open? Do you cater to the conventions? And incidentally, when you have this huge employment base and you open enough restaurants to serve at least part of your occupancy, if you don’t fill those rooms, these hotels can lose millions of dollars a day.”
Some won’t survive
Wynn expects some casinos not to survive the financial hit they’re taking after being closed for more than two months.
“When you look at their financial situations, the balance sheets of some of the companies, you realize that this kind of a hit could be permanent,” he said. “Hopefully, that won’t happen and they’ll get back open and they’ll get enough business to survive. It’s a very inside question and you have to take a very technical look at each operation. We’ll know a lot more when we see what happens. June 1 is the targeted beginning of the opening of the hotels. By June 15, if you ask these questions again, we’ll get really good clarity on that. It’s a little early now.”
Wynn indicated he doesn’t think casino customers will put up with social distancing measures for long, illustrating his point with how after three months of air-raid sirens going off in London during the German blitzkrieg, Londoners eventually began ignoring them.
“They would stay in the pubs, drink their beer, eat their sandwiches,” Wynn said of the World War II reactions of the public. “They would hear the sirens, not move an inch and listen for the motors of the buzz bombs. If the motors stopped overhead, which meant the bombs were going to fall, they dove under the tables. If the buzz bombs kept going, they kept drinking their beer and socializing. That is to say, there is an overwhelming impulse for people to return to their normal, habitual behavior.
“We’re seeing that in America now,” he said. “People are just not going to accept being under house arrest, no matter what some governor says to them, they’re going to go out and try to return to normal behavior.”
Wynn said he isn’t sure how the relationship between the United States and China is going to play out and whether it will affect tourism. Many high rollers in Las Vegas casinos are from China.
“I think that the tension between the government of China and our government, exacerbated by the virus, is a very interesting question that has been raised,” he said. “In the history of China, they haven’t interfered with foreign business per se that way. But everything is new these days, so you’re raising a point I’m not able to answer.”
The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson. Las Vegas Sands operates six properties in Macao and one in Singapore.