Steve Wynn said on Tuesday that Las Vegas casinos and hotels, including his Wynn Resorts Ltd properties, are affected by the soft U.S. economy but are also protected by an increase in European customers.
The casino and hotel magnate is going through the sixth recession in his nearly four decades in the business, Wynn said at the Milken Institute Global Conference. „I think there is a recession and we’re certainly feeling a slowdown in Las Vegas,“ he said. „We tend to feel it less because we’re sort of a niche operator, but I am noticing it. We’re never immune; we are buffered.“
International customers, mainly Europeans, are helping buoy the casinos on the Las Vegas Strip, he said. „With the dollar being where it is against the euro and the (British pound), our European customers are playing and visiting and spending money with gusto because they think we’re pesos,“ Wynn said.
The euro was trading at about USD 1.56 on Tuesday and the pound was near USD 1.97. Wynn said the average room rate at the three-year-old, 2,700-room Wynn Las Vegas has fallen to USD 301 from USD 309, and occupancy has dipped to 95.9 percent from 97 percent.
Those figures are from Wynn Resorts’ recent quarterly report, he said. First-quarter results, to be released on Thursday, will be more indicative of whether hotels on the Strip are greatly affected by the U.S. slowdown, he said. Wynn’s company, MGM Mirage and Las Vegas Sands „are in a position to ride out softening of the market in Las Vegas,“ he said.
The weak U.S. economy has not caused Wynn to delay any expansion plans, he said. His newest venture, the USD 2.25 billion, 2,000-room Encore, will open on schedule in December, he said. All rooms will be suites. „What a ridiculous amount of money for a place to sleep,“ he said.
But the cost will be worth it, he said, and he’s convinced high-end customers will spend to stay there. „The entire casino is ringed with glass walls and gardens. Natural light will flood the whole place constantly,“ Wynn said. „That’s never been done before.“
And the Encore won’t be his finale, he said, reiterating plans for expansion in Asia, including building a non-casino hotel in Beijing.