Great quarter but call wasn't as entertaining as recent earnings conference calls.
Q&A:
- Cotai timing/positioning: Wynn Encore Macau--has " extended space" as biggest asset; we will build on Cotai "if we are encouraged to do so... and we will be encouraged..... won't happen until early 2014"
- LV room rates trends in 2Q: not really seeing any improvement...very stable; growing capacity impacting rates
- comps in LV was tough; beach club construction closed down the front of Encore; construction will finish in 4 weeks.
- Wynn Macau strong 1Q: higher mix of direct vip; non-gaming revs up significantly; hold % was "a little below normal" (historical hold is 2.85%)
- Thinks government deficits will continue to adversely impact US economy
- Sustainability of high growth rates in Macau/China: Chinese people's "good life is going through Macau"--not just gambling, but also shopping and dining.
- Asian markets are very aware of "top brands". Wynn needs to meet that demand
- Government pulled back on visas to discourage people who can't afford to gamble.
- "We increased Chinese ownership in our company by listing on HK Exchange"
- Steve believes market share should be derived from fair share ratio
- Cost of living in Macau is not improving. Wynn increased Macau workers' wages by 10%. Infrastructure contribution is 4% of revenues
- Macau government limiting of licenses/construction activity in Cotai; construction will be done at a slower pace for resorts.
- While checking out regional casinos, Steve impressed by River City Casino (PNK);
- Next project will be in China unless there is a Massachusetts opportunity.
- Reception on Macau Encore: "Nicest property in Macau. Good supply in the market helps everyone"
- Wynn Encore: wants to attract customers who are willing to dish out $350 per night for hotel luxury living.
- Encore fulfills "non-gaming" customer requests, learning from customers--Steve calls it "organic growth."
- Zero impact from MBS's opening.
- "It is appropriate for us to spend more time and focus on Macau"
- Philly renewal license: yes, Steve would be interested if opportunity pops up.
- LV Baccarat trends: YOY change should be up but not at levels seen during peak of US economy.
