Wynn blames group business shift for Q1 revenue drop

Wynn Las Vegas
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Revenue and occupancy decreased at Wynn Resorts' Las Vegas hotels in the first quarter, which the company attributed to a fluctuation in group business and not any market softness.

"A large group shift from Q1 to Q2 this year negatively impacted RevPAR growth and food and beverage revenues in the quarter," CFO Craig Billings said during Wynn's first quarter earnings call.

Billings said he expects to see an "offsetting outperformance in RevPAR" for Las Vegas hotels in second-quarter results. 

Revenue per available room (RevPAR) at the Wynn Las Vegas and Encore hotel-casinos fell 2.1% to $279. Average daily rate (ADR) slipped 0.6% to $338, while occupancy decreased from 83.9% to 82.6%. 

Total Las Vegas revenue was down 7.1% to $401 million, attributed to the group bookings shift and a decline in baccarat volume.

In Macau, Wynn saw mixed results. The Wynn Macau's revenue dropped 15.3% to $523.9 million, with RevPAR and ADR flat and occupancy increasing modestly. 

The Wynn Palace, however, had a revenue increase of 9.1% to $726.6 million, bolstered by 8.2% RevPAR growth and a 7.7% ADR increase. Occupancy at the Wynn Palace grew from 96.8% to 97.2%.

Wynn Resorts CEO Matthew Maddox addressed investor concerns over increased competition from emerging gaming markets in Asia.

"I just don't believe that Macau and Las Vegas are going to be cannibalized by those small, tertiary jurisdictions," said Maddox. "What always happens is that customers will try out the new product, they'll go to a place where they're getting free money and big discounts, but that never lasts. Customers with money and choice always go back to the place that they enjoy the most, and you cannot replicate Las Vegas and Macau anywhere else on the planet. I'm a big believer ... that Macau's and Las Vegas' best days are ahead of them."

Maddox also touched on a ruling made last month by the Massachusetts Gaming Commission allowing Wynn Resorts to retain its gaming license in the state after investigations into the company's concealment of sexual misconduct claims made by multiple women against its founder, Steve Wynn. That decision included a fine against the company of $35 million, and Maddox said that Wynn Resorts is currently weighing whether to file an appeal.

"We're still reviewing the decision as it relates to some of the secondary and tertiary conditions imposed by the commission," he said. "We are ready to move forward with the opening of Boston Harbor. We do not believe, if we choose to appeal, that it will impact our ability to open the project at the end of June."

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