Premium mass key to Wynn Macau’s growth as company shifts gears
The last quarter of 2020 brought some good news for Wynn Resorts, despite having to continue to deal with COVID-19. The company’s Wynn Macau operations saw an improvement in adjusted property EBITDA (earnings before interest, taxes, depreciation and amortization) that saw it land back on the right side of zero. The figure was in the red in the third quarter, coming in at -$112.1 million, but Wynn turned things around and posted a positive adjusted property EBITDA of $39.4 million for the final quarter of the year. This was due, in part, to a greater focus on the premium mass gambling segment, a move that is likely to continue for the foreseeable future. The latest figures were made available through a company filing this week, in which Wynn Resorts CEO Matt Maddox pointed out that improved travel and reduced COVID-19 restrictions helped with the recovery process. In addition, the premium mass segment gave the rebound “particular strength,” while VIP and mass-market gaming improved, as well. The quarter’s mass-market table drop was $1.29 billion, six times higher than the previous quarter, and VIP turnover from table games improved almost at the same rate, coming in at $4.58 billion. Still, both figures were nowhere near the number Wynn Macau had seen a year earlier, before the coronavirus upended Macau.The improvement in premium mass action was possible due to a shift in operations across the last six months of 2020. Wynn realized what was going to drive its growth and began implementing changes that would allow it to focus better on the premium mass segment. Maddox explained in the company filing, “It’s crystal clear that the growth drivers for Macau are really the sweet spot for our company, and that’s the premium segment, premium mass in particular.” He added, “The premium segment did better than the core mass segment – it was not down 50 percent as the overall mass was. We do not need 50,000 people a day walking through our facilities to get back to our EBITDA target. We require significantly less people because we cater to the higher-end customer … We are targeting that segment. We think we are going to get more market share in the premium-mass segment than we have in the past.”Wynn had predicted last year that VIP gambling was likely to take a hit as it began to shift gears. However, the changes don’t reflect a complete move away from the segment. The company knows that it still needs to give its high rollers a lot of attention and has indicated that it already has a number of whales ready to descend on its Macau properties during the Chinese New Year (CNY) holiday period next week.It wasn’t clear how full Wynn’s properties will be for CNY, but there are still plenty of rooms available across the city. GGRAsia investigated the occupancy rates for area hotels and found that, of the 22 five-star hotels available, 21 had plenty of vacancy. The media outlet relied on booking availability that could be gleaned from company websites reception desks, and found that only Banyan Tree Macau in Cotai was completely full for the holiday.
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