• Navigate This Market Turbulence: All Hedgeye Research → 3 Months 66% Off

    Preserve. Protect. Grow. Former hedge fund manager and CEO Keith McCullough has successfully navigated the Dot Com Bust, Great Financial Crisis and Crash of 2020. Get 66% off the smartest investing insights money can buy.

WYNN 1Q09 Earnings call:


Vegas commentary:

"I'm still going to be a little reticent... I'm not sure if the stimulus package is in effect yet"

  • "I am cautiously optimistic that we have reached the bottom"
  • "Booking window used to be 60-90, then collapsed, then in April they saw it begin to widen"
  • Back in the 90s occupancy
  • Avoided the rampant layoffs that competitors have done, instead WYNN has adopted a shared pain approach that was more gradual to take out 75-100MM of expenses, and we're seeing it in the results
  • How long will this downturn last? He thinks that people will want to go back to their normal behavior and that things need to get worse from here for things not to get better
  • Job creation / unemployment is the #1 driver of Vegas visitation once that stabilizes and starts getting better, Vegas will rebound
  • In January they were really focused on launching Encore and once they got that done they focused on cost savings and operations in Feb & March
  • In March they focused on business mix and trialed a bunch of different strategies to see what works and are evaluating that. But think that if you look at March as a normalized level - they would have reported approx 70MM of EBITDA
  • Things have been stable for the last six weeks
  • Hotel booking window is still a lot shorter than last year, so they still have very limited visibility

General Commentary:

  • Seeing very strong weekends in both Macau & Vegas - this past weekend. In general weekends aren't bad for them


  • Holding in better than the US
  • Junket operators are being more conservative in their lending
  • Things are trending up in terms of volume
  • Slot programs are going from strength to strength
  • May should be strong from a calendar standpoint
  • Overall things have been steady there
  • Think that the first quarter was also hurt by a pullback in credit extension (also in Vegas)
  • The customers in China are still coming and spending - just being more careful with their spend
  • Macau Encore - will receive the building permit in April 30, 2010 - wants to open everything at once, so plan a grand opening in May. 405 all suite rooms - smallest room is 1000 SQFT - completely contained space with casino, hotel, restaurants, retail.


  • Think that a normalized March would amount to 72MM EBITDA for the quarter
  • Macau hold impact on EBITDA - just apply the junket margin at 3% to get a normalized EBITDA
  • Wouldn't describe themselves as aggressive shoppers unless there is a transaction that is clearly attractive to shareholders (right price & right fit or totally not competitive with their current product)
    • Thinks that the whole Bellagio article from the Milken conference was exaggerate
    • There is no transaction in the works now
  • Was Encore positive cash flow on its own this quarter?
    • Decided to treat Nevada as a group - same as for Macau
  • No change in the April rate, more focused on getting people to spend money at the hotel once they are there
  • Once the weekends start selling out it is a sign that things are getting better but the convention side is still weak and don't expect it to change until the end of the year
  • Affect of stimulus in China - It hits way faster in China
    • Lower tier of Guandong were out of work and now they are getting better
    • Visitors / Visa - no formal visa change - but signs of relaxation. No shortage of people coming - line takes hours to get through
    • There has been a formal relaxation from Shenguen and Hong Kong
  • Raised equity to make sure that they can focus their efforts on everything but the balance sheet
  • Effect of CityCenter: Aria
    • Isn't worried about what goes on outside his building