Wynn Macau Ltd will have to face the facts, and the facts are that the long-term revenue has been impacted by the spate of regulatory changes introduced in the special administrative region. While the company has been more than happy to comply with all existing regulatory prerequisites, the return to profitability will be a somewhat challenging one. The company reported losses to the tune of $98.3 million for the first quarter of the year, going up to the period ending on March 31, 2022.
Wynn Macau’s Properties Still Struggling with Regional Challenges
This is up 31% on the losses posted over the same period last year, and part of that is attributed to the lack of VIP customers. The VIP segment was hit around the same time that the Suncity Group CEO Alvin Chau was arrested and his junket company faced unprecedented scrutiny. Months after, junket operations have not been the same with fewer than 40 licenses issued in the country and a myriad of “restrictive” rules introduced.
The occasional COVID-19 outbreaks did not help with border traffic between Macau and China is fairly restricted as well. Wynn Macau’s properties in the SAR, to name Wynn Macau and Wynn Palace, posted a combined adjusted EBITDA of $5.5 million loss.
This was in stark contrast to the adjusted EBITDA posted in Q1 2021 when the properties recorded a positive EBITDA of $43.9 million. Operating revenues suffered at Wynn Palace which saw a decline of 31.2% in its revenue, to $163.3 million.
The Cotai integrated resort was one of the most seriously impacted by the disappearance of junket operators and the flow of high-value customers. Table games went down to $531.9 million, and the win was 15.6% down to $111.2 million. Everything else suffered as well, including slots handle which was down 30.1% to $250 million. Win from slots was also down another 11.2% to $12.6 million.
Las Vegas and the US Prove a Buoy for Financial Performances
Commenting on these results, Wynn Resorts CEO Craig Billings remained cautiously optimistic and reiterated the combined strength of the group. He said:
Our first quarter results reflect continued strength at both Wynn Las Vegas and Encore Boston Harbor where our teams’ unrelenting focus on five star hospitality and world class experiences combined with very strong customer demand to deliver a new first quarter record for Adjusted Property EBITDA at both properties.Wynn Resorts CEO Craig Billings
Regardless, the group-wide revenues for Wynn Resorts remained fairly strong. In fact, the company announced a 29.4% year-over-year improvement in revenues, to $953.3 million. This was occasioned by the strong performance registered across the Pacific Ocean in Las Vegas, Nevada. While Wynn Macau and Wynn Interactive posted significant losses, the company saw the retail verticals in the United States cushion this and elevate the company’s operations.