So not running Macau at full capacity? Mass push really paying off. Wynn beat our Street high EBITDA and EPS estimates with luck a factor in LV.
CONF CALL
- Want to launch Wynn Palace in 22-23 months; all-suite hotel will be the conversation piece of Asia
- Phase 2 will almost double Wynn Palace capacity
- Do not want Wynn Encore hotel to be a 'stepchild'
Q & A
- 1Q/2Q 2013 lagged in mass marketing in Macau. Until they saw an opportunity or when they lagged too much, they didn't change. They made changes in 4Q, which helped them outperform.
- Wynn Macau Slot win > Venetian slot win even though WYNN's smaller
- Macau: opened new slot room and new premium mass area (15 tables) in Oct 2013; more expansions coming
- LV: saw uptick in retail, convention bookings, and hotel rate and occupancy; hold % a little better than last year
- 2014 LV will equal or exceed 2013 LV
- But still cautious on LV
- Wynn Peninsula capex:
- Additional mass space and high-end gaming will be at a level that equals or exceeds Wynn Palace
- 2013 capex was $60MM: Wynn Tower $35MM; $10MM new junket room; $1.5MM renovated spa
- 2014 capex will be a little more than 2013
- Cotai: Phase 1 and 2 will cost $10bn all together; 95%-97% will be non-gaming
- MA: $1.5-1.6 billion investment (borrow $900MM and invest $500MM). Can make $300MM in equity in Boston
- No casino player in the USA does not know the Wynn brand
- Japan: will only be a study bill that may be passed this year; in 2016, a decision could be made
- New junket room accounted for the rise in number of tables in Q4.
- Cash: little less than $1 billion onshore, rest is offshore
- Adelson said if Japanese partners with an American company, it will be under American scrutiny which could be onerous. Wynn says that could be the case but it's not automatically a problem.
- If WYNN partners with a local company in Tokyo, company would not have to qualify for suitability in Las Vegas.
- Thinks NJ will find MGM suitable again
- MA: Foxwoods may apply on a commercial level for a third license and agree to pay 25%, not with the compact with the state but simply as a a competitive operators like MGM and WYNN.
- High hold affected LV by ~$20MM
- Macau is not supply constrained; the market will absorb the new properties on Cotai nicely
- Added new junket area 3 days ago
- Table/slot count does not matter much; it's the person gambling that matters
- Wynn Palace Phase 2: Two towers/ two buildings; 1,500 additional rooms - all suites (1,400 ft per room)
- May open two years after Phase 1