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Wynn Resorts expects big F1 weekend, not dropping room rates

Updated November 9, 2023 - 5:39 pm

Wynn Resorts Ltd. expects to generate the most revenue for a three-day period in its history next week when the Formula One Las Vegas Grand Prix rolls into town.

Wynn CEO Craig Billings and Wynn Las Vegas President Brian Gullbrants said Thursday that unlike some of the company’s rivals, Wynn has seen no decline in room rates or interest in the inaugural race scheduled Nov. 16-18.

Executives made their remarks during the company’s third-quarter earnings call with investors.

Company officials made no references to labor negotiations with the Culinary union during the call. Talks reportedly were ongoing between Culinary and Wynn bargaining teams earlier in the day.

Caesars Entertainment Inc. and MGM Resorts International reached tentative settlement agreements with the union Tuesday and Wednesday, respectively, and it was widely expected that Wynn would be next on Thursday.

Instead, Wynn executives discussed the company’s successes in Macao and what is expected to be one of the most financially successful special events in city history.

In response to an analyst’s question about whether demand had fallen off as other resorts have reported, Billings said it hasn’t because the anticipated market is right in the company’s wheelhouse.

“I’ve heard on a couple of our competitors’ calls commentary around expectations coming down within the market,” Billings said. “I will tell you that our expectations for F1 haven’t changed one bit because, as you rightly pointed out, we knew that it was our customer base that would be at that event from the beginning.

“We have more front money and credit lined up for this event than any event in the history of Wynn Las Vegas,” he said, “and we’ve had some doozies before. So this is shaping up to be a great event for us. We’re incredibly excited. We’re not talking (specific details) about (cash flow) uplift. But it’s going to be good.”

Gullbrants, a member of the Las Vegas Convention and Visitors Authority board of directors which helped bring the race to Las Vegas, added that revenue records could fall.

“I’d say F1’s really coming in nicely right now for all areas of our business,” he said. “We should exceed actually our all-time hotel revenue as well, our hotel revenue record by about 50 percent for the three-day period. And as Craig mentioned, the gaming revenue and credits are looking quite promising, some of the best we’ve ever seen. So I think we’re looking forward to an exciting and exceptional race week here. We barely even put any rooms on public sale. I mean, we’ve had robust demand.”

Revenue at Wynn soared as a result of increases in Macao and Las Vegas. Revenue from the company’s Wynn and Encore Macao and Wynn Palace in Macao climbed 630.2 percent to $524.8 million as a result of the strong rebound from COVID-19 restrictions that were in place a year ago.

The company’s North American properties had record third-quarter cash flow and in Las Vegas, the company’s third-quarter table game hold was at the top its expected range of 26 percent.

Net losses posted were the result of one-time expenses, including changes in valuations.

Billings also said construction is continuing at Ras Al Khaimah in the United Arab Emirates and he said the company will have a distinct advantage at being first to that market with a casino.

“We believe it’s highly unlikely that every emirate will ultimately avail themselves of the right to host an integrated resort,” Billings said. “There’s a whole bunch of reasons for this, ranging from cultural nuances to population density to varying degrees of need for the additional visitation.

“Our view is that it will likely be us and us alone for a multiyear period, given that we are well underway on construction now. And of course, we all know the advantages of being first, as we have seen in other markets,” he said.

Wynn shares, traded on the Nasdaq exchange, closed down $2.25, 2.4 percent, to $90.65 a share on volume nearly three times the daily average. After hours, shares continued to drop, ending near $85.50 a share.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.

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