Construction in United Arab Emirates (UAE) to Commence in Coming Weeks; Wynn Remains Optimistic About Macau
Wynn Resorts (NASDAQ: WYNN), in a forthcoming development, plans to begin construction on its casino resort situated on Al-Marjan Island in the United Arab Emirates (UAE) within weeks, aiming for a 2027 unveiling.
Julie Cameron Doe, Wynn's CFO, made these comments during the J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum, held recently in Las Vegas. Wynn, being an equity investor and operator, will oversee the first Las Vegas-style gambling hub within the Arab world.
Last year, Wynn announced its partnership with local hotel developer RAK Hospitality Holding LLC for this project, the inaugural gaming venue in the UAE. Estimates suggest that the casino resort on the artificial island will cost at least $2 billion, with Wynn's stake in the deal rumored to be approximately one-third.
Earlier this month, it emerged that Wynn had registered trademarks for "Arabian Strip" and "Marjan Strip" for use with the UAE property.
Wynn's Comeback in Macau Impressive
Statistics indicate that Wynn is one of the concessionaires capturing market share in Macau. This impressive revival comes after a three-year slump in the Chinese territory, which was attributed to the coronavirus pandemic and the ensuing measures deployed by the Chinese Communist Party (CCP).
At the conference, Doe informed J.P. Morgan analyst Joseph Greff that Wynn will continuing to thrive due to the resurgence in Macau, as Wynn Palace—one of its two Macau properties—is one of the newest venues in the region. Greff acknowledged that Wynn Macau's decision to maintain its workforce during the coronavirus downturn was astute, ensuring the company avoids potential labor shortages.
According to Greff, while there might be a rise in operating expenses to accommodate increased demand, higher revenues will lead to a more significant EBITDA boom for Wynn.
Nonetheless, the progress of the UAE project is crucial for Wynn's long-term plans, as its current portfolio primarily relies on its two Macau venues and three properties in the US, with the Macau properties accounting for most of the profits.
Wynn's US Outlook
At the J.P. Morgan conference, Doe expressed optimism about Wynn's US operations, including in Las Vegas and at Encore Boston Harbor.
Greff observed that enhanced midweek occupancy can boost Wynn's profit margins, while high-profile 2023 events, such as the November F1 race in Las Vegas, provide Wynn with the flexibility to increase room fees.
At Encore Boston Harbor, a top-grossing domestic casino hotel outside of Las Vegas, Doe highlighted additional parking, expanding the property, and the recent introduction of sports betting in Massachusetts as potential catalysts for market growth in that region.
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