The CEO of Wynn Resorts and Wynn Macau Ltd, Craig Billings, says the company is reassessing its future Macau development opportunities as the market shifts away from VIP to a more leisure-focussed customer base.
The update, offered during Wynn’s 1Q22 earnings call on Wednesday morning (Asia time), comes with the Phase 2 expansion of Wynn Palace currently on hold as a result of the COVID-19 pandemic. However, the combined headwinds of the pandemic and the collapse of Macau’s VIP industry – once a stronghold of the Wynn brand – has forced a rethink with the company eying a more mass-centric focus in the future.
“We’ve seen, throughout the course of COVID, new customers coming to Macau with different customer motivations than perhaps historically we’ve seen – shopping motivation, leisure motivation and things like that,” Billings told analysts during Wednesday’s earnings call.
“Part of the reason that’s the case is because Hong Kong hasn’t been accessible but that really piques our interest when we think about what the future development of Macau might be from a non-gaming perspective. Now, we are under no illusion that we are talking about a Las Vegas style non-gaming market – it’s just a very, very different dynamic [in Macau] – but the ability to adapt and change our business as the market adapts is a very interesting incremental investment opportunity.”
Wynn Macau President and Executive Director, Ian Michael Coughlan, noted that the company still has two undeveloped land parcels at Wynn Palace covering 11 acres, plus another 1.5 acres on the existing property, that offer “very meaningful” development opportunities for the future although exactly what those might be remains to be seen. The company had previously described its vision for Wynn Palace Phase 2 as “a unique world-class cultural destination, incorporating an array of non-gaming amenities such as event space, interactive entertainment installations, food and beverage offerings, and additional hotel rooms.”
Coughlan said Wynn is “in the process right now of determining exactly what will benefit Macau for the long term. We are awaiting the tender documentation to see how the government feels about what’s right for the future and we will blend our own needs with that, but there is great opportunity for us to expand our business considerably in Macau.”
In the short-term, Billings said the company would start by reimagining former junket rooms at peninsula property Wynn Macau as mass or premium mass space.
“We anticipate that the core customer motivation [at Wynn Macau] will be gaming over the longer term and we have some prime real estate in the form of former junket space that we think will be incredibly competitive in mass,” he said.
“Wynn Palace is a bit of a different story because we may have the opportunity to do some more unique things, some longer-term, blue sky thinking. We are obviously not making that investment right now but we have the real estate to do it and we’ll take advantage of that when the time comes.”
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