In its latest investment note, Deutsche Bank points out that Wynn Resorts’ management believes the gaming operator will be the first to market in the UAE for a few years. They note that it’s highly unlikely for every Emirate to have an integrated resort, citing reasons ranging from cultural nuances to population density and visitation.
In this context, Wynn believes that ‘the market will most likely be a duopoly or oligopoly, and (Wynn) will have a first-mover advantage with a database.’
Deutsche Bank notes that construction on Al Marjan Island has continued, with much of the foundation for the hotel tower complete.
‘Wynn expects to receive their provisional license, followed by the final license, in the near term,’ note the analysts.
The US-based gaming operator announced its joint venture development with RAK Hospitality in January 2022. The integrated resort will be located on Al Marjan Island, a man-made island in Ras Al Khaimah, UAE.
‘We note that the property will have two years of exclusivity in the Ras Al Khaimah Emirate post-opening. We believe the project is likely to open in early 2027,’ it stated.
Wynn Macau mass table drop exceeds pre-COVID levels
Deutsche Bank analysts note the weakness in Wynn’s stock price after the announcement of the 3Q23 earnings results. ‘Macau came in lighter than expected on a headline EBITDA basis, and operating expenses crept up a bit, in conjunction with programming and non-gaming elements. Wynn’s management also noted the lag in the recovery on the Peninsula was not well-received.’
Meanwhile, Macau mass drop in October was up 24 percent, relative to October 2019, a month in which Wynn saw $4 million per day in property EBITDA.
According to CBRE Securities, Wynn Macau recorded adjusted property EBITDA of $255 million in 3Q23. The figure represents 85 percent of pre-COVID levels.
At the same time, the company’s mass table drop has exceeded 3Q19 levels by 19 percent, and direct VIP turnover was 13 percent ahead of the same quarter in 2019.
Regarding the non-gaming side, the investment research firm notes that tenant retail sales were 24 percent above 3Q19, and hotel revenue was up 20 percent. Looking into 4Q23, ‘mass market hold normalized in October, and volumes accelerated, with mass drop 24 percent above October 2019.’ Property EBITDA in the month was slightly below October 2019.
