Wynn Sees UAE Construction Starting in Weeks, Bullish on Macau

Posted on: March 16, 2023, 04:52h. 

Last updated on: March 17, 2023, 01:10h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Wynn Resorts (NASDAQ: WYNN) expects that construction on its casino resort on Al-Marjan Island in the United Arab Emirates (UAE) will commence in a matter of weeks, forecasting a 2027 debut.

Wynn Resorts
Wynn and Encore on the Las Vegas Strip. Wynn CFO Julie Cameron Doe said construction on the operator’s UAE project will soon start. (Image: Vegas Means Business)

Wynn CFO Julie Cameron Doe made related remarks at the J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum, which was held this week in Las Vegas. The Encore operator is an equity investor in, and the operator of, what will be the first Las Vegas-style gaming venue in the Arab world.

Last year, Wynn announced it’s partnering with local hotel developer RAK Hospitality Holding LLC on the project, the first gaming venue in the UAE. It’s believed the casino resort on the man-made island will cost at least $2 billion, and that the Las Vegas-based company’s interest in the venture will work out to be a third.

Earlier this month, it was reported that Wynn registered trademarks for “Arabian Strip” and “Marjan Strip” for use with the UAE property.

Wynn Macau Rebound Impressive

Data confirm that Wynn is among the concessionaires gaining market share in Macau. That’s as the Chinese territory sharply rebounds from what was a gloomy three-year stretch caused by the coronavirus pandemic and ensuing restrictions deployed by the Chinese Communist Party (CCP).

At the conference, Doe told J.P. Morgan analyst Joseph Greff that Wynn is well-positioned to continue benefiting from the Macau resurgence, because Wynn Palace — one of the operator’s two properties there — is one of the newest venues in the special administrative region (SAR). Greff noted Wynn Macau’s decision to not lay off workers during coronavirus lethargy was a smart move, because the operator isn’t vulnerable to labor squeezes.

As such, while there will be some ramp in [operating expenses] to correspond with higher demand,” observed the analyst. “WYNN should see a more meaningful EBITDA inflection as revenues step up.”

Still, the advancement of the UAE project is vital for Wynn’s long-term trajectory, because as its portfolio currently stands, it runs two Macau venues and three in the US, with the Macau duo doing much of the heavy lifting.

Wynn’s US Outlook

At the J.P. Morgan conference, Doe sounded a bullish tone on Wynn’s US operations, including on the Las Vegas Strip and at Encore Boston Harbor.

Greff noted that elevated midweek occupancy can help Wynn boost margins, while marquee 2023 events, such as the November F1 race in Las Vegas, give the operator leeway to increase room prices.

At Encore Boston Harbor, which is already one of the highest-grossing domestic casino hotels outside of Las Vegas, Doe said additional parking, expansion of the property, and the recent launch of sports wagering in Massachusetts are potential catalysts for adding share in that market.