Despite its reputation as a luxury brand, Wynn Macau is outperforming the market in the premium mass segment, delivering above average margins, Bernstein Research says in a note.
The research firm said it estimates that VIP only makes up about 25 percent of EBITDA.
“Wynn has shown stronger overall growth in its mass tables business than the overall market in every quarter since Palace opened and the mass tables business delivers superior table yields,” it said, referring to the group’s Cotai resort which opened in August 2016.
Wynn has one of the best operating efficiency models in Macau and both Macau properties deliver above average margins and generate some of the highest mass GGR per room, Bernstein added. It said its mass tables generate a win/unit/day of $25,000, some 60 percent above average in Macau, with VIP at $43,000, or 30 percent higher.
Wynn Macau and Wynn Palace properties also generate some of the highest mass GGR per room at US$1.0 million and US$0.7 million, respectively, compared to US$0.6 million on average for hotels with over 600 rooms.
Wynn Palace is likely to enjoy mass market revenue growth of over 10 percent in 2019, while its Peninsula property, Wynn Macau is likely to see gains of 8 percent, it estimates. Growth will be helped by property expansion, opening of the light rail transit system and increased foot traffic.
“Location is paramount and Wynn’s is a competitive advantage. Wynn Macau is arguably the best positioned peninsula property, while Wynn Palace will benefit from increased traffic to the east side of Cotai and the opening of the LRT later this year.”