Forced to temporarily shutter due to the coronavirus crisis, Wynn Resorts’ Macao business is currently burning through $2.4 million to $2.6 million in operating expenses each day, according to Wynn Resorts CEO Matt Maddox.

Maddox gave analysts color on the situation in Macao during Wynn Resorts’ 2019 year-end earnings call last week, commending Macao officials for their decision to mandate a two-week shutdown of the city’s casinos earlier this month. Macao’s casino operators ceased operations at midnight on Feb. 5. 

“We’re in daily conversations with the government, they’ve been extremely transparent, and they’ve been terrific partners with us as we focus on the safety of everyone in Macao,” said Maddox. Wynn Resorts’ Macao holdings comprise the Wynn Macau, the adjacent Wynn Encore tower and the Wynn Palace. 

Maddox added that the majority of the group’s Macao costs are currently tied to roughly $1.8 million to $1.9 million a day in payroll, and he asserted that the company has no plans to curb that spending. 

“We are not looking at cutting that at all,” he explained. “Now is the time you invest in your people, and you don’t do something short-term that will hurt the culture. We know this will be temporary, and we think it is the right long-term investment.”

Wynn Resorts president and CFO Craig Billings was confident that Wynn Resorts would be able to weather a potential extension of the casino shutdown.

“Business interruption insurance must relate to a physical event that caused the business interruption -- a storm or some other kind of damage -- and that obviously isn’t the case here, so we don’t expect material business-interruption coverage proceeds,” said Billings. “But we have a ton of liquidity. We have a couple billion dollars of availability ... that’s more than sufficient to last for really any period of closure.”

Operating revenues at the Wynn Macau were down 5.1%, to $525.4 million, for the three months through Dec. 31, while operating revenues at the Wynn Palace fell 20.3%, to $590 million, during the same period. 

Companywide, Wynn Resorts recorded a $72.9 million net loss for the fourth quarter, versus a net income of $464.8 million during the same quarter in 2018. For the full year, net income was down more than 78%, to $122.9 million.

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