Wynn Las Vegas 2nd Quarter Earnings Are Shocking
Over the past couple of weeks we have gotten a peak into just how bad it is in Vegas and for gaming companies in general. I have previously covered the billion dollar losses for Las Vegas Sands and MGM Resorts and now it’s time for a couple of more gaming companies to post shocking earnings.
Las Vegas is facing huge pressures with room rates at very low levels and occupancy to match. If you’re interested in seeing more of what Las Vegas is like right now check out our Vegas tours on the MtM YouTube channel, but now let’s talk Wynn.
Wynn Las Vegas 2nd Quarter Earnings
Yesterday Wynn Resorts announced their 2nd quarter earnings and they were ugly. Net revenue was only $85.7 million which was down 94.8% from the second quarter of 2019 where it was $1.66 billion. Those numbers are insane, but there is even more to share in regards to the Wynn 2nd quarter earnings report.
So how much did Wynn lose? Between their properties in Macau and Vegas plus their casino in Boston, Wynn lost a total of $637.6 million in the 2nd quarter. “Our leadership team continues to work closely with our host communities, fellow industry leaders and world-class medical experts to implement and advance strategies to mitigate the impact of the virus on our team members, our guests and our broader communities,” said Matt Maddox, CEO of Wynn Resorts, Limited.
Wynn Macau Open But Doing Terrible
Since the Vegas and Boston properties were mostly closed during the 2nd quarter these earnings aren’t a huge surprise, but what might shock some people is how terrible their Macau casinos are doing. Similar to Las Vegas Sands, Wynn’s Macau properties have taken a giant hit despite being closed for only a short period.
Wynn Palace in Macau is a stunning property. I have been there 3 times and I think it is the nicest casino I have ever been into. With that said, its revenue decreased 98.6%(!) year over year from $628.9 million to just $8.7 million. Wynn Macau (a separate property) had a similar 97.8% decrease. Wynn’s Macau properties are currently burning through $1.5-$2 million per day to stay open.
What Is the Future for Wynn?
While a lot of uncertainty surrounds every gaming company, Wynn seemed to indicate times are getting tougher in Vegas. On their earnings call they said demand was decent going into July 4th but has slowed since then. Currently Wynn Las Vegas is running at about 30% occupancy during the week and 50% on the weekends. They also said non-gaming spend is down 60%. That’s pretty rough.
You can find more info about the Wynn Resorts 2nd quarter earnings here.
Red Rock Resorts (Station Casinos) 2nd Quarter Earnings
Another huge gaming company tied to Las Vegas announced their earnings as well. Red Rock Resorts is the largest local casino owner in the Vegas area and they are hurting. In my shuttered casinos of Vegas video I showed several of their properties which have yet to reopen. Despite having many casinos now operating, this company has four casinos still mothballed.
As for earnings, it isn’t good. Their net revenues were down 77.5% year over year and they lost a total of $118.4 million in the quarter. This company is rumored to be trying to sell many of their still closed casinos, so we’ll see if they are able to accomplish that. “Despite the severe impact of the COVID-19 pandemic on our operating results for the three and six months ended June 30, 2020, our Las Vegas properties showed strong performance for the post-reopening period from June 4 through June 30, 2020.”
Let’s hope their 3rd quarter earnings are better. You can find more details of the 2nd quarter earnings report here.
What Does This Mean?
Red Rock Resorts is an interesting company in that they rely heavily on locals for their revenues. As you can see locals seem to be visiting their casinos more than tourists are visiting the Strip. That said, revenues are still down quite a bit and the company has 4 huge casinos they currently have no plans to open. That says a lot.
As for Wynn, I think the Macau numbers have to be troubling. Casinos in Macau only closed for a couple of weeks back in January to implement health procedures. Even with those casinos being open, it’s clear that travel restrictions and other political realities have hurt Macau tremendously. For a property as elaborate and expensive as Wynn Palace to only take in $8.7 million over three months is mind blowing.
Time will tell how these gaming companies do, but it’s clear that none of them are immune to the devastation that has come from COVID-19. While Red Rock Resorts seems to be having more success at their locals casinos, they still have closed properties they have to deal with. Wynn on the other hand is in deep trouble, but they do have plenty of cash on hand and a reputation that hopefully will guide them through.
What do you think about these latest earnings reports? Is the worst behind us?