While a number of analysts have made observations on the impact of new properties, Wells Fargo says it’s too early to make any definitive calls.
“We definitely don’t agree with the (recent) view that the new properties haven’t shown any major cannibalization, and therefore ‘supply growth’ can be ruled out as a ‘risk’. While we all have channel checks and made observations of and heard anecdotes around the new properties, we think it’s too early to definitely call.”
Las Vegas Sands’ Parisian opened on September 13, Wynn Palace opened on August 22, while Studio City opened on October 25, 2015.
Other than the observation that room rates are being pressured by the latest openings (including Studio City) – with room rates down 13 percent year-on-year in September, there hasn’t been any firm evidence of the impact on market share; margins; and non-gaming EBITDA as a result of new openings, says the brokerage.
Wells Fargo says they wouldn’t be in a position to reliable call the impact on market share until Q3 earnings in late October.