Wynn Macau to benefit most from rising premium mass

Wynn Macau is likely to benefit more than other operators when it comes to the growth of the premium mass sector in Macau, according to analysts from Bernstein in a 160-page report on Wednesday. 

Year-to-date, VIP has declined mid-teens percentage as growth in mass has remained above 10 percent. 

Bernstein said it expects mass GGR will continue to be supported by overall visitation growth and hotel room expansion, while overall visitation will be helped by the opening of the HZMB bridge.

However, the real growth will come from the premium consuming class in China, said Bernstein. 

“We expect this to drive sustained, high-end demand growth and believe several intrinsically differentiated brands with strong consumer equity can capitalize on this growth and generate sustained superior returns.”

Wynn Macau, whilst often perceived as a VIP brand catering only to the highest-end consumers, only sees a 20 percent contribution from VIP to the company’s EBITDA. 

“In fact, Wynn has a strong positioning in the Mass sector and has shown stronger overall growth in its Mass tables business than the overall market in every quarter for two years since Wynn Palace opened. The Wynn Mass tables business has also shown table yields significantly higher than that for the overall Macau market,” said analysts. 

The cluster of properties in Cotai East, for which Wynn Palace is a part, will see critical mass developing, particularly in the premium segment. This will be a medium to long term benefit to Wynn Macau, said Bernstein.