Wynn Resorts Q4 2022 Earnings Results & Report

Wynn Resorts EPS Results

• Actual EPS: -$1.23
• Consensus EPS: -$1.17
• Beat/Miss: Missed by -$0.06
• One Year Ago EPS: -$1.37
• EPS Beat Rate: 3 of last 8 quarters

Wynn Resorts Revenue Results

• Actual Revenue: $1.00 billion
• Expected Revenue: $955.88 million
• Beat/Miss: Beat by +$49.06 million
• YoY Revenue Growth: -4.60%

Wynn Resorts (NASDAQ:WYNN), Ltd. is a developer and operator of luxury integrated resorts, with a focus on destination casinos, hotels, restaurants, entertainment venues, retail, and convention facilities. Its properties are designed to combine gaming with premium hospitality and leisure experiences.

The company operates Wynn Las Vegas and Encore Las Vegas in Nevada, Encore Boston Harbor in Massachusetts, and Wynn Macau and Wynn Palace in Macau. These resorts serve visitors in the United States and international markets, offering accommodations, casino gaming, dining, nightlife, retail, spas, entertainment, and meeting and convention services.

Wynn Resorts was founded in 2002 by casino executive Steve Wynn. The company is led by Craig Billings, who became chief executive officer in 2022. Wynn Resorts is also developing Wynn Al Marjan Island in Ras Al Khaimah, United Arab Emirates, in partnership with local entities; the project is intended to expand the company’s presence into the Middle East.

Wynn Resorts Q4 2022 Earnings Call Transcript

Key Takeaways

• Wynn Las Vegas set an all-time record with $816 million of normalized adjusted property EBITDA in 2022 and delivered a Q4 record EBITDA of $219 million, driven by broad-based strength across casino, hotel, F&B, entertainment and retail.
• Wynn secured a renewed Macau concession with a $2.2 billion commitment over 10 years and expects 2023 related CapEx of $50 million to $220 million, while post-COVID reopenings saw Chinese New Year mass table drop at 95% of 2019 levels and direct VIP turnover up 40%.
• Encore Boston Harbor generated a record $63.3 million of adjusted EBITDA in Q4 and launched retail sports betting, achieving an average handle of over $500,000 per day in its first week and signing 30% more Wynn Rewards members.
• Wynn Interactive’s EBITDA burn increased to $28.3 million in Q4 and continues to operate at a loss as it advances marketing efficiency; Massachusetts retail and expected online sports-betting launch are viewed as potential catalysts for profitability improvement.
• As of year-end, Wynn Resorts held approximately $4.5 billion of global liquidity (cash and revolver availability) and plans to repay a $500 million Las Vegas bond maturity in May 2023 from cash on hand, enhancing its leverage profile.

Presentation

[Operator]

Welcome to the Wynn Resorts fourth quarter 2022 earnings call. All participants are in a listen only mode until the question and answer session of today's conference. To ask a question, press star one on your touchtone phone, record your name and I will introduce you. Please limit yourself to one question and one follow-up question. This call is being recorded. If you have any objections, you may disconnect at this time. I will now turn the line over to Julie Cameron-Doe, Chief Financial Officer. Please go ahead.

[Julie Cameron-Doe, CFO at Wynn Resorts]

Thank you, operator. Good afternoon, everyone. On the call with me today are Craig Billings, Brian Gullbrants, and Steve Weitman in Las Vegas. Also on the line are Ian Coughlan, Linda Chen, Frederic Luvisutto, and Jenny Holaday. I want to remind you that we may make forward-looking statements under Safe Harbor federal securities laws, and those statements may or may not come true. I will now turn the call over to Craig Billings.

[Craig Billings, CEO at Wynn Resorts]

Thanks, Julie. Afternoon, everyone, thanks for joining us. As we prepared for this call, I looked at an old analyst note that was published after our Q4 2019 earnings. The expectation for 2022 EBITDA Wynn Las Vegas in that note was $482 million. Here we are, 3 years in a global pandemic later, Wynn Las Vegas just printed $816 million of normalized adjusted property EBITDA. $816 million. I'm confident that this is an all-time record for a standalone Las Vegas Strip property. Mind you, we did not deliver this result by nickel and diming on service standards and reducing staff to drive operating leverage. The team did it by focusing on what we do best: great products, great service, great programming. It showed in our market share and pricing power.

[Craig Billings, CEO at Wynn Resorts]

The Wynn Las Vegas team absolutely crushed it in 2022. Our business in Vegas is stronger and more relevant than it has ever been. I'll talk more about the fourth quarter in Vegas and our outlook in a moment. Turning to several other significant events, I'd like to touch on our concession renewal and the reopening of Macau. After going through the then required quarantine, I was fortunate to attend the signing ceremony for our new concession. I'm proud of the plan that we put forward as part of the concession renewal and believe that the CapEx and programming we proposed will be additive to our business there over the coming years.

[Craig Billings, CEO at Wynn Resorts]

I would like to thank the government of Macau for their faith in us, and importantly, I would like to thank the Wynn Macau team for their dedication to our business over the past three very difficult years. Fortunately, recent actions by both Macau and mainland authorities to reopen the market give us great confidence that the difficulties are behind us and the near-term future there much brighter. Over the past several weeks, we've welcomed back an increasing number of guests as the region has reopened to travel and tourism in a meaningful way. With our premium product and service levels, we are well-positioned to lead the post-COVID recovery in Macau, and our strengths were evident during the recent Chinese New Year holiday period.

[Craig Billings, CEO at Wynn Resorts]

In the casino, mass table drop reached 95% of 2019 Chinese New Year levels, with strong play across the spectrum from premium mass to core mass. In direct VIP, turnover was 40% above pre-COVID Chinese New Year levels. Importantly, we estimate that our hold normalized GGR market share during the month of January was consistent with 2019 levels, despite all the changes in the junket environment, defying the expectations of those who continue to incorrectly believe that we are solely a VIP-focused organization. On the non-gaming side, hotel occupancy was 96% and our tenant retail sales increased 34% compared to Chinese New Year 2019. Overall, during the Chinese New Year period, we delivered our strongest EBITDA performance since the onset of the pandemic, approximately $4 million of normalized EBITDA per day.

[Craig Billings, CEO at Wynn Resorts]

Turning back to Las Vegas, the team at Wynn Las Vegas turned in a fourth quarter record with $219 million of EBITDA. We saw broad-based strength across casino, hotel, F&B, entertainment, and retail, all well above Q4 2021 levels, despite the difficult year-over-year comps. Our investment in people, facilities, and programming, and our team's deep sense of personal ownership of our business continue to drive growth. We continue to monitor economic trends and forward bookings at Wynn Las Vegas. We're encouraged that the strength we have experienced over the past several quarters has continued into Q1. Similarly, our forward-looking indicators also remain quite strong despite well-known macro concerns, as room bookings are pacing at or above pre-COVID-19 levels on substantially higher ADRs. Turning to Boston, like Vegas, Encore had a strong quarter, generating $63 million of EBITDAR.

[Craig Billings, CEO at Wynn Resorts]

We saw strength across the casino with record gross gaming revenue and on the non-gaming side with strong hotel revenue driven by both ADR and occupancy. The strength has continued into the first quarter with EBITDA per day in January, largely consistent with trends we have experienced over the past few quarters. We were also pleased to launch retail sports betting at Encore Boston Harbor last week, averaging a little over a half a million a day in handle over the first six days, which is about 80% of the average daily handle at Wynn Las Vegas. During those 6 days, we also signed up about 30% more Wynn Rewards members than normal. We continue to expect the book to be a significant driver for new customer acquisition over time.

[Craig Billings, CEO at Wynn Resorts]

We also continue to advance our plans for our upcoming development project across the street from the property that will include incremental parking, food and beverage, and entertainment amenities. At Wynn Interactive, our overall EBITDA burn rate in the quarter ticked up sequentially to $28 million due to a well-publicized World Series bet that went against us. Adjusted for that single bet, burn was roughly flat. Our team continues to stay disciplined on cost while driving improved marketing efficiency. We're looking forward to the potential for a significant catalyst for WynnBET in Massachusetts with the combination of our recently launched retail book and the expected upcoming launch of online sports betting. Lastly, we are quickly advancing our planning for Wynn Al Marjan Island, our integrated resort in the UAE.

[Craig Billings, CEO at Wynn Resorts]

We're in the late stages of programming for the resort, and I expect we will be driving piles for the foundation of the property by the middle of the year. I also expect we will share renderings, programming, and plans publicly over the next few months. The more time we spend in that market, the more confident we are in the project. With that, I will now turn it over to Julie to run through some additional details on the quarter. Julie?

[Julie Cameron-Doe, CFO at Wynn Resorts]

Thank you, Craig. At Wynn Las Vegas, we generated a fourth quarter record of $219.3 million in adjusted property EBITDA on $585.5 million of operating revenue during the quarter. Lower than normal hold negatively impacted EBITDA by around $10.5 million in Q4. Our hotel occupancy was 89.9% in the quarter, up 350 basis points year-over-year, and up 50 basis points versus Q4, 2019. Importantly, we've stayed true to our luxury brand and continue to compete on quality of product and service experience with our overall ADR reaching a record $492 during Q4, 2022, up 11.8% versus Q4, 2021, and 53% above Q4, 2019 levels.

[Julie Cameron-Doe, CFO at Wynn Resorts]

Our other non-gaming businesses saw broad-based strength across F&B, entertainment, and retail, which were up nicely year-over-year and also well above pre-pandemic levels. In the casino, our Q4 2022 slot handle increased 20.9% year-over-year and was 69% above Q4 2019 levels. Similarly, our table drop was up 1.1% year-over-year and was 43% above Q4 2019 levels, despite still suppressed international play during the quarter due to COVID-related travel challenges. The team in Vegas has done a great job of controlling costs without negatively impacting the guest experience, delivering adjusted property EBITDA margin of 37.4% in the quarter. On a hold normalized basis, our EBITDA margin was up approximately 1,300 basis points compared to Q4 2019.

[Julie Cameron-Doe, CFO at Wynn Resorts]

OpEx, excluding gaming tax per day, was $3.8 million in Q4 2022, up 25% compared to Q4 2019 levels, well below the 59% increase in operating revenues. In Boston, before getting into the details, I'd like to point out that following the closing of the sale-leaseback transaction on December 1, we're now reporting adjusted property EBITDA for this business. In Q4 2022, we generated adjusted property EBITDA of $63.3 million with EBITDA margin of 29%. We saw broad-based strength across casino and non-gaming during the quarter. In the casino, we generated $190 million of GGR, a property record with strength in both tables and slots.

[Julie Cameron-Doe, CFO at Wynn Resorts]

Our non-gaming revenue grew 13% year-over-year to a record $56.8 million, with particular strength in the hotel, driven by 93.9% occupancy and a $404 ADR. We've stayed very disciplined on the cost side with OpEx excluding gaming tax per day of approximately $1.17 million in Q4 2022. This was a decrease of over 8% compared to $1.3 million per day in Q4 2019, and up modestly relative to Q3 2022. As we've discussed on prior calls, the year-over-year EBITDA and OpEx comps were impacted by a combination of contractual labor agreements, which added around $45,000 per day to our OpEx base beginning late in Q2 2022, along with a non-recurring benefit of $2 million in Q4 last year.

[Julie Cameron-Doe, CFO at Wynn Resorts]

We're well-positioned to drive strong operating leverage as we continue to grow the top line over time. Our Macau operations delivered an EBITDA loss of $59.1 million in the quarter on $190.3 million of operating revenues. Lower than normal holds negatively impacted EBITDA by around $25 million in Q4. While the COVID situation in the region was challenging during Q4, as Craig noted, we were encouraged by the meaningful uptick in visitation and demand we experienced during the recent Chinese holiday period. Our OpEx, excluding gaming tax, was approximately $2 million per day in Q4, a decrease compared to $2.4 million in Q4, 2021. The team has done a great job remaining disciplined on costs in a difficult operating environment. Longer term, we are well-positioned to drive strong operating leverage as the business recovers over time.

[Julie Cameron-Doe, CFO at Wynn Resorts]

In terms of the new concessions, we approach the tender process very prudently, carefully balancing our commitments to the government with our responsibilities to our shareholders and, of course, our liquidity position. We're currently advancing through the design and planning stages, but these projects require a number of government approvals, creating a wide range of potential CapEx in the very near term. As such, for 2023, we expect CapEx related to our concession commitments to range between $50 million -$220 million. On our future non-gaming investments include a new theater set to be home of a unique spectacle show, an innovative food hall, and an event and entertainment center.

[Julie Cameron-Doe, CFO at Wynn Resorts]

As Craig noted, we believe these investments play into our strength as we have a demonstrated track record of introducing innovative non-gaming investments that drive increased tourism and ultimately strong shareholder returns. Turning to Wynn Interactive, our EBITDA burn rate increased sequentially to $28.3 million in Q4 2022. Adjusting for the well-publicized World Series bet that Craig mentioned, it was roughly flat with our Q3 2022 burn rate of $17.7 million. The team continues to control costs while driving improved marketing efficiency. Moving on to the balance sheet. Our liquidity position remains very strong, with global cash and revolver availability of approximately $4.5 billion as of December 31. This was comprised of $952 million of total cash and available liquidity in Macau and $3.5 billion in the U.S.

[Julie Cameron-Doe, CFO at Wynn Resorts]

These numbers exclude the undrawn $500 million intercompany revolving credit facility Wynn Resorts entered into with Wynn Macau. We were pleased to close the sale-leaseback transaction for the real estate at Encore Boston Harbor on December 1, with gross proceeds of $1.7 billion, further bolstering our already strong liquidity position. Importantly, the combination of very strong performance in Las Vegas and Boston, with the properties generating $1.04 billion of adjusted property EBITDA during 2022, together with our robust liquidity, creates a very healthy leverage profile in the U.S. With our properties performing well in each of our markets and our robust liquidity, I'd like to note our intention to repay our upcoming May 2023 Wynn Las Vegas bond maturity with cash from the balance sheet, reducing our domestic growth leverage by $500 million.

[Julie Cameron-Doe, CFO at Wynn Resorts]

Finally, our CapEx in the quarter was $27 million, primarily related to normal course maintenance. With that, we'll now open up the call to Q&A.

[Operator]

Thank you. To ask a question, press star one on your touchtone phone. Unmute your phone, record your name clearly after the prompt, and I will introduce you for your question. Please limit yourself to one question and one follow-up question. To withdraw your question, press star two. Our first question comes from Carlo Santarelli with Deutsche Bank. You may go ahead.

[Carlo Santarelli, Managing Director of Gaming and Lodging Equity Research at Deutsche Bank]

Hey, thank you very much, Craig and Julie, for the comments. Craig, Julie, whoever wants to kind of take this one. Craig, I know you spoke a little bit about kind of what you guys saw in Wynn Macau during Chinese New Year. To the extent you're willing to kind of comment on what you've seen in the aftermath and kind of the weeks following the holiday, that would be great.

[Craig Billings, CEO at Wynn Resorts]

Sure. Thanks, Carlo. It's been pretty good, actually. Frederic, do you wanna take, do you wanna provide a little more color on that?

[Frederic Luvisutto, COO and Executive Director at Wynn Macau]

Sure, Craig. Thank you, Carlo. We have seen typically after post Chinese New Year in the past, the period has seen a slowdown, but we have been very encouraged to see the business remaining very, very strong. With mass gaming, direct VIP and retail sales better than previously similar periods in the past. We have seen the resilience of the business post-Chinese New Year and very encouraged with that.

[Carlo Santarelli, Managing Director of Gaming and Lodging Equity Research at Deutsche Bank]

Great. Thank you. That's helpful. Then, Craig, you talked a little bit about obviously what you saw on the VIP side. I believe you said direct VIP was 40% above or so. That was 2019 Chinese New Year levels.

[Craig Billings, CEO at Wynn Resorts]

Correct.

[Carlo Santarelli, Managing Director of Gaming and Lodging Equity Research at Deutsche Bank]

Can you comment at all as to what the experience has been with, you know, whatever junket VIP there is in the market today?

[Craig Billings, CEO at Wynn Resorts]

There was some junket activity over the course of Chinese New Year. Obviously, the situation has changed a lot from the pre-COVID period. I think it's actually a little bit too early to call out what role, you know, the gaming promoters and the junkets will play in the market, but there certainly was some activity.

[Carlo Santarelli, Managing Director of Gaming and Lodging Equity Research at Deutsche Bank]

Great. Thanks, everybody.

[Operator]

Thank you. Our next caller is Joe Greff with JPMorgan.

[Joe Greff, Managing Director and Senior Equity Research Analyst at JPMorgan]

Hello, everybody.

[Craig Billings, CEO at Wynn Resorts]

Go ahead.

[Joe Greff, Managing Director and Senior Equity Research Analyst at JPMorgan]

Sort of following, on Carlo's question, on what you saw in Chinese New Year and the period, since then, can you talk about the migration of the junket VIP business into the direct, and into the premium mass component of your mass business? How do you sort of you think what otherwise would have been the junket, you know, what percentage of that do you think is migrating versus maybe not coming back quite yet?

[Craig Billings, CEO at Wynn Resorts]

I think it's, Joe, I think it's way too early to be talking about %, given the market really just fully reopened on January 8, so really a month now. We certainly are seeing former junket customers migrate into both premium mass and into direct. Remember, direct is tricky because there you're talking about credit extension, and so you have to be quite prudent in how you manage the direct business. Unfortunately, it's just a little too early. What I would say is, volumes came back strong. The, you know, the narrative that we're VIP-focused, I think proved to be pretty false. We competed very strongly during the Chinese New Year period, and we're incredibly proud of the results that we had.

[Joe Greff, Managing Director and Senior Equity Research Analyst at JPMorgan]

When you look back in 2019, we always thought that the direct VIP component of was something around 10%-20% of the total VIP turnover. Are we fair in thinking that? Can you remind us of that?

[Craig Billings, CEO at Wynn Resorts]

You are.

[Joe Greff, Managing Director and Senior Equity Research Analyst at JPMorgan]

Okay. That's all for me. Thank you.

[Craig Billings, CEO at Wynn Resorts]

Thanks, Joe.

[Operator]

Thank you. Our next caller is Shaun Kelley with Bank of America.

[Shaun Kelley, Managing Director and Senior Research Analyst at Bank of America Merrill Lynch]

Hi, good afternoon, everyone. Thanks for taking my question. Just was hoping to get a little bit more color on maybe the cost and margin picture as things start to rebound in Macau. Julie, I think in the prepared remarks, you mentioned, you were down around $2 million a day in the fourth quarter in Macau, if I caught it correctly, down from $2.4 million back in 2019. Just as you're sort of reramping, I mean, yeah, I think we all

[Shaun Kelley, Managing Director and Senior Research Analyst at Bank of America Merrill Lynch]

Really underappreciated the amount of operating leverage that was gonna happen at, in certain markets in the United States, and kind of trying to put some of the tea leaves together around how this may play out for Macau. Just any kind of thoughts on expenses and margins, as the recovery begins here.

[Julie Cameron-Doe, CFO at Wynn Resorts]

Sure. Yeah, you're correct, Shaun. We, we did talk to our OpEx today in Q4 with $2 million, which was, you know, down from $2.4 million the year prior. We worked really hard last year to preserve cash and to manage OpEx down while we were closed. Obviously, that's not representative of how things will be necessarily moving forward, as you know, we're fully open now and staffing, you know, full-time in different F&B outlets and so on. You know, where that shakes out in terms of margin, it's really gonna depend on the mix of business that comes back in that market. It's pretty much the same answer we give when we're asked about margin in Vegas. It's very much mix dependent.

[Julie Cameron-Doe, CFO at Wynn Resorts]

You know, we don't, we don't manage our business on margin. That's really the outcome. You know, we manage to our brand, and we staff accordingly. We're very tight in terms of staffing. We're very focused on doing that appropriately. We're very focused on our service delivery standards as well.

[Craig Billings, CEO at Wynn Resorts]

I would just add, it's primarily a mass mix now. You're gonna have that's inherently higher margin and a portion of the cost savings that we implemented during the COVID period, which, thank God, is long behind us, we will maintain. You know, the margin profile should be healthy. Again, it's we're really talking about a couple weeks here, so it's a little bit early to start forecasting specific margins.

[Shaun Kelley, Managing Director and Senior Research Analyst at Bank of America Merrill Lynch]

Great. Understood. Then maybe it's just the follow-up. Another thing that kinda came up in the prepared remarks was the CapEx outlook in Macau, and I think you gave a pretty wide range. Could you just kinda talk about what would sorta dictate maybe the high versus the low? What are some of the different either projects that could get underway or things that, you know, could impact the outcome of the range that you discussed?

[Julie Cameron-Doe, CFO at Wynn Resorts]

Sure. So I think, you know, taking a step back, if you think about our total commitment when we put through our, you know, our concession proposal, you know, we've committed to $2.2 billion over 10 years. That's a, you know, obviously that's a mix of CapEx and OpEx, but we're very focused on getting the CapEx done as quickly as possible so that we can, you know, so that we can start to drive strong returns from it. The limiting factor is really the approvals that we need locally to break ground and build anything. It's really not in our hands.

[Julie Cameron-Doe, CFO at Wynn Resorts]

You know, that's why we've given such a wide range because, you know, from our perspective, we're pacing towards, you know, getting through our D&D and designing everything. We have to go through government approvals for anything that's construction related. The range we gave was $50 million-$220 million.

[Shaun Kelley, Managing Director and Senior Research Analyst at Bank of America Merrill Lynch]

Thank you very much.

[Operator]

Thank you. Our next caller is David Katz with Jefferies. You may go ahead.

[Cassandra Lee, Equity Associate at Jefferies]

Hi, this is Cassandra on behalf of David. You mentioned that digital was nearly breakeven in the fourth quarter, excluding the World Series result. Can you discuss the upcoming launches and whether we should expect the business to inflect to profit this year?

[Craig Billings, CEO at Wynn Resorts]

Sure. The most significant upcoming launch is Massachusetts, where obviously we have Encore Boston Harbor, and I would hope and expect that we will have a reasonable market share because of that, the presence of that property as our competitors have in other markets. We are driving the business as hard as we can while being prudent. I would expect some point of inflection in late 2023, dependent upon how much user money good user acquisition we do in Massachusetts. We have the burn at this point really, really well under control.

[Craig Billings, CEO at Wynn Resorts]

Again, as we talked about before, the long-term strategy is really focused on Massachusetts and positioning ourselves for iGaming, which would make the business accretive to our land-based resorts.

[Cassandra Lee, Equity Associate at Jefferies]

Great. Thank you. If I may follow up, can you talk about your upcoming maturity and any thoughts about tapping to the debt capital market now, since we have seen some activity in the last few weeks?

[Craig Billings, CEO at Wynn Resorts]

I think Julie just mentioned in the prepared remarks that we're gonna pay down our upcoming maturity with cash on the balance sheet.

[Cassandra Lee, Equity Associate at Jefferies]

Great. Thank you very much.

[Operator]

Thank you. Our next caller is Robin Farley with UBS.

[Robin Farley, Managing Director and Senior Equity Analyst at UBS]

Great. Thanks. I wonder, just circling back to how things are trending post Chinese New Year. Obviously, really strong numbers through the holiday. You know, there's been chatter that the drop-off in the market overall was a little bit more than seasonal. I wonder if you could sort of give your take on that. Is it, you know, reasonable to think that there'll just be kind of increased volatility, maybe around kind of shoulder periods? Or I guess how would you kind of frame that, you know, more than normal sort of seasonal drop-off post the holiday?

[Craig Billings, CEO at Wynn Resorts]

Hi, Robin. I, yeah, I'm not sure who you've been talking to. Frederic just mentioned that actually, we've been performing above what we would normally see during that drop-off period.

[Robin Farley, Managing Director and Senior Equity Analyst at UBS]

When you say performing above, I didn't know if that was a combination of you talked about your expenses being down, and so it could be overall EBITDA, but just wondering?

[Craig Billings, CEO at Wynn Resorts]

No, he was talking business volumes.

[Robin Farley, Managing Director and Senior Equity Analyst at UBS]

Would you then assume that that's a growth in market share? In other words, what's your take on sort of the overall market volatility that maybe you're gaining share, and it sounds like in that period, but just your take on that?

[Craig Billings, CEO at Wynn Resorts]

It's a week, right? In the grand scheme of things, it's a week. It's hard to read any tea leaves in a week. What I would say is that the market roared back. Macau was a rager on the mass side, on the direct VIP side, on the retail side, and on the occupancy side during Chinese New Year, and it outperformed our expectations for the lull period shortly thereafter. Anything beyond that, it's just too early to read.

[Robin Farley, Managing Director and Senior Equity Analyst at UBS]

Okay. Just to clarify, when you say it outperformed your expectations, you meant specifically that it was a better sequential drop-off than what you'd seen in 2019 or just better than what your expectations were for?

[Craig Billings, CEO at Wynn Resorts]

The former.

[Robin Farley, Managing Director and Senior Equity Analyst at UBS]

this year? Okay, great.

[Craig Billings, CEO at Wynn Resorts]

The former.

[Robin Farley, Managing Director and Senior Equity Analyst at UBS]

Thank you for. Great.

[Craig Billings, CEO at Wynn Resorts]

Sure.

[Robin Farley, Managing Director and Senior Equity Analyst at UBS]

Thank you. Thanks.

[Operator]

Thank you. Our next question is Daniel Politzer. You may go ahead from Wells Fargo.

[Daniel Politzer, Director and Senior Equity Research Analyst at Wells Fargo]

Hey, good afternoon, everyone. Thanks for taking my questions. I wanted to circle back on the $4 million EBITDA per day for Chinese New Year that you mentioned. Is there any way you could put that into historical context? You know, I don't know what it was in 2019 or during other Golden Week or Chinese New Year periods.

[Craig Billings, CEO at Wynn Resorts]

Yeah. It would've been... I don't remember if we've quoted it previously, so I wanna be careful in terms of prior disclosure. But it's substantial relative to prior periods. It's certainly not where we peaked, I'll put it to you that way, because the junket contribution wasn't there this year and that was, you know, call it $700 to $1 million EBITDA in a normal Chinese New Year.

[Daniel Politzer, Director and Senior Equity Research Analyst at Wells Fargo]

Got it.

[Craig Billings, CEO at Wynn Resorts]

I think the point is, it's a substantial number given that the market really opened at the beginning of January, and it gives us confidence in the remainder of 2023 and beyond.

[Daniel Politzer, Director and Senior Equity Research Analyst at Wells Fargo]

Understood. Just pivoting to Las Vegas. I mean, to what extent, since China's effectively reopened, have you seen that high-end Asia business kind of resurface, you know, like your Vegas property?

[Craig Billings, CEO at Wynn Resorts]

Too early to say. I mean, our BOC, our BOC drop in fourth quarter was pretty strong, so we've been doing pretty well on the back of domestic BOC business. In fact, those folks from the region that chose to sit it out, sit COVID out over here. Again, a little bit early to say. You have to go through the process of getting a visa, you have to arrange travel, et cetera, et cetera. Certainly, international travel is a tailwind that we hope to see in Vegas in 2023, given that really in 2022, the only real inbound visitation was some from Europe and from Latin America.

[Daniel Politzer, Director and Senior Equity Research Analyst at Wells Fargo]

Got it. Thanks.

[Julie Cameron-Doe, CFO at Wynn Resorts]

Thanks. Operator, the next question will be the last one. Thank you.

[Operator]

Thank you. Our last question comes from Stephen Grambling with Morgan Stanley. You may go ahead, sir.

[Stephen Grambling, Managing Director and Head of US Gaming, Lodging and Leisure Research at Morgan Stanley]

Hey, thanks. I may have missed this, but in Las Vegas, can you just provide any additional color on what you're seeing in terms of forward bookings, you know, not only in, I guess, the first quarter should be particularly strong, but even as we look out over the course of the year, what you're seeing and any expectations, as it relates to kind of convention mix? Thanks.

[Craig Billings, CEO at Wynn Resorts]

Sure. I'll start and then I'll ask Brian to comment. First and foremost, we have been really intentional over the past year in how we've approached our business in Las Vegas. Our business here is more relevant with the best customers than ever before. Even with the tailwinds, we've outperformed. We're keenly aware of the broader economic environment, from interest rates to gas prices to layoffs, and we have a 2023 playbook for any number of economic scenarios. Brian, do you wanna talk about your view on 2023 and then perhaps dig a little bit more into convention?

[Brian Gullbrants, President at Wynn Las Vegas]

Absolutely. As we look to 2023, not only were we pacing strong coming out of 2022, going into 2023, it's just accelerated. I'm so excited about what we've got coming in 2023. When you look at it, we've got the best teams in the business, we got the best assets in the business. In Vegas, we've got strong pace of group, particularly, as we look forward into 2023 and then even beyond. Q1 may be a record for us. It's just really done well. We have strong pricing power in every channel. We got a new show we just launched with Awakening. We've got several projects coming in 2023 that are really exciting. Then we kinda kick things at the end up a notch with F1 in November.

[Brian Gullbrants, President at Wynn Las Vegas]

Our outlook for the year, pending no other, macroeconomic impacts, looks pretty good. We're feeling pretty good about what we can see right now. On the group side, very strong.

[Craig Billings, CEO at Wynn Resorts]

We're doing really well on what we can control. We don't control the macroeconomy. That's a fact. You know, how that flows, don't know. We're feeling good about our business here.

[Stephen Grambling, Managing Director and Head of US Gaming, Lodging and Leisure Research at Morgan Stanley]

Fair enough. If I can just sneak in a quick follow-up on Macau? As you think about how to grow the direct VIP business or think about that as an opportunity, is one way to think through maybe some of the customers who used to bet both VIP and in the mass market segment as, you know, a target customer? Is there any way to frame, you know, how big that business could grow?

[Craig Billings, CEO at Wynn Resorts]

Every customer is unique, it's really difficult. If I had a broad strokes playbook, I probably wouldn't share it on a public call. Every customer is unique. The ecosystem now, which is comprised of junkets, but different promoters and us, it gives us the ability to address a sub-segment of those junket customers. Some of them, you know, it's gonna take years to figure out. Certainly a portion of those will migrate into our direct business. You saw it over Chinese New Year. Some of them will migrate into premium mass, but I don't think there's a broad swath playbook that we can talk about.

[Stephen Grambling, Managing Director and Head of US Gaming, Lodging and Leisure Research at Morgan Stanley]

Fair enough. Thanks so much.

[Craig Billings, CEO at Wynn Resorts]

Sure.

[Julie Cameron-Doe, CFO at Wynn Resorts]

Okay. Well, with that, we'll now close the call. Thank you all for your time today and your support for Wynn Resorts. We look forward to updating you very soon.

[Craig Billings, CEO at Wynn Resorts]

Thanks, everybody.

[Operator]

Thank you for participating on today's conference call.

Participants

Executives

• Craig Billings, CEO
• Julie Cameron-Doe, CFO

Analysts

• Brian Gullbrants, President at Wynn Las Vegas
• Carlo Santarelli, Managing Director of Gaming and Lodging Equity Research at Deutsche Bank
• Cassandra Lee, Equity Associate at Jefferies
• Daniel Politzer, Director and Senior Equity Research Analyst at Wells Fargo
• Frederic Luvisutto, COO and Executive Director at Wynn Macau
• Joe Greff, Managing Director and Senior Equity Research Analyst at JPMorgan
• Robin Farley, Managing Director and Senior Equity Analyst at UBS
• Shaun Kelley, Managing Director and Senior Research Analyst at Bank of America Merrill Lynch
• Stephen Grambling, Managing Director and Head of US Gaming, Lodging and Leisure Research at Morgan Stanley