Wynn Macau Ltd is better placed than many of its competitors to enjoy a relatively fast rebound once border restrictions between Macau and mainland China start to ease due to its premium leanings, according to CEO Matt Maddox.
The topic of Macau’s borders was a common theme during Wynn Resorts’ 1Q20 earnings call on Thursday (Macau time) after the company fell to a US$402 million loss for the quarter, primarily on a lack of business at its Macau IRs, Wynn Palace and Wynn Macau.
But with growing signs that the Macau government is preparing to partially open its borders with mainland China and predictions by industry commentators that high-end play is likely to return faster than mass market, Maddox told analysts that Wynn is well placed to enjoy solid ramp in the coming months.
“Based on our limited experience between 20 February and 20 March (when Macau’s casinos reopened following a 15-day closure period), we definitely saw the VIP and premium segments come back faster,” Maddox said.
“There is clearly pent-up demand for activity … I do believe there will be demand for Macau without a doubt. I am also very happy that we’re in the business of the premium and high-end, which requires less people and more revenue.
“At Wynn, we’re not looking for 100,000 people a day to be going through our properties. That’s never been our business. We’ve always been focused on the premium end and I believe that will definitely be the segment that comes back first in Macau.”
Wynn Resorts President, CFO and Treasurer Craig Billings said daily cash burn in Macau was currently between US$2 million and US$2.5 million per day and would remain so until the reimplementation of visa schemes and transport routes to Hong Kong.
However, the company remains confident that it can at least reach the 45% of 4Q19 volumes it needs for breakeven EBITDA sooner rather than later.
“When we reopened in February and into March, we got back to 25% to 30% of our 4Q19 gaming volumes,” Billings said.
“Whether it’s VIP or premium mass led, we feel like the snap back will be pretty quick and that will obviously help our cash flow position there.”
