Wynn Resorts could reopen the Wynn and
Encore hotels in Las Vegas as soon as late May.
“We’re still working through what our opening plan is going
to look like,” CEO Matt Maddox told investors during the group’s first-quarter earnings
call May 6. “It’s unclear if it will just be one of the two assets. Given all
of the occupancy limitations that we will have self-imposed, it could very
likely be both of the assets open, but with occupancy restrictions.”
Wynn Resorts president and CFO Craig Billings said how much
of the Wynn and Encore open will depend on both “public health considerations
and our view of demand.” He estimated that the properties’ breakeven level is
at about 50% to 60% occupancy.
Maddox emphasized that any Las Vegas opening plans will
hinge entirely on protocols dictated by Nevada’s phased reopening strategy as well
as the assumption that Covid-19’s spread within the state remains below certain
“We won’t be opening nightclubs or convention areas or
shows, but we will be opening most of our restaurants and working with our
retail partners to have an experience that will be safe and fun,” said Maddox. “We
do anticipate as we get closer to an opening, that there will be pent-up demand
in the leisure segment.”
In the U.S., Wynn Resorts reported that its current daily cash-burn
rate is approximately $3.6 million. In the U.S., Wynn Resorts also operates the
Encore Boston Harbor, which is also temporarily closed.
In Macau, the company’s Wynn Macau and Wynn Palace hotels
have been open since a two-week closure in February. Travel restrictions in the
region have led to “limited business volumes,” however. Wynn Resorts’ daily cash-burn
rate is in the $2 million to $2.5 million range in Macau.
Taking into consideration an additional $1.7 million daily
burn in cash interest and capital expenses, Billings said the group’s “global
worst case, all-in daily cash burn rate” is approximately $7.8 million. He said
the company has enough of a liquidity cushion to last until the third quarter
of 2021 at minimum.
The company has committed to covering salary, tips and
benefits for its 15,000 U.S. employees through the end of May. Wynn reported
that U.S. payroll expenses for the period of April 1 to May 15 totaled $75.7
For the first quarter, Wynn Resorts’ revenue dropped 42.3%,
to $953.7 million.