Wynn Resorts Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 6, 2024

There are 13 speakers on the call.

Operator

Welcome to the Wynn Resorts Second Quarter 20 24 Earnings Call. All participants are on a listen only mode until the question and answer session of today's conference. 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 Do, Chief Financial Officer.

Operator

Please go ahead.

Speaker 1

Thank you, operator, and good afternoon, everyone. On the call with me today are Craig Billings and Brian Gilbrands in Las Vegas. Also on the line are Linda Chen, Frederic Luvisutto and Jenny Holliday. 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.

Speaker 2

Thanks, Julie. Good afternoon, and as always, thank you for joining us today. I want to start by saying thank you to my nearly 28,000 colleagues here at Wynn Resorts for delivering yet another record quarter, in this case the best second quarter EBITDAR in the history of the company at $572,000,000 Record quarters like this one further strengthened our conviction when deploying capital whether through CapEx or share repurchases like those we executed in the Q2 and into the Q3. Wynn Las Vegas delivered $230,000,000 of adjusted property EBITDA, a second quarter record and up 3% year on year on yet another very difficult comp, taking trailing 12 month EBITDA to nearly $970,000,000 The quarter was led by continues to have the top performing team here in Vegas. More recently, demand has remained healthy in 3Q with RevPAR up and slot handle broadly in line year on year during July, despite this year having 2 fewer weekend days.

Speaker 2

Turning to Boston, Encore generated $62,000,000 of EBITDAR during the quarter. Lower than normal table hold masked what was actually a strong quarter across the property with record slot handle, strong table drop and record RevPAR in the hotel. More recently, demand has remained healthy through July with table drop, slot handle and RevPAR all up on a tough year on year comp. Turning to Macau, we generated $280,000,000 of EBITDA in the second quarter on slightly lower market share than we have experienced over the previous several quarters and slightly lower mass hold quarter over quarter. There has been a lot of chatter in the market about the elevated promotional environment in Macau with concessionaires jockey for market share.

Speaker 2

Of course, while we are active every day in the hand to hand combat for market share, you can't take market share to the bank and thus we have continued to remain disciplined in our OpEx and player reinvestment levels, highlighted by our strong EBITDA margin in the quarter, which was 250 basis points above 2Q 2019. We've seen this dynamic before and we were encouraged that our G we were encouraged that our GGR market share moved back to our expected range in July supported by strong mass table drop and 99 occupancy during the month. Wynn Macau's long term outlook remains very bright. On the development front, we continue to elevate our product offering in Macau through new and innovative food and beverage concepts and unique programming. We also continue to advance construction work on our 2nd major concession related project, our Destination Food Hall, which we expect to open in 2025.

Speaker 2

Turning to our Wynn Al Marjan Island development in the UAE. I just returned from several weeks in Dubai and Ras al Khaimah. Construction is rapidly progressing on the project with work now approaching the 15th floor of the hotel. The building now stands just over 90 meters, which is already the tallest building in the Emirates. During the second quarter, we Emirates.

Speaker 2

During the Q2, we contributed $357,000,000 of equity to our UAE joint venture. This transaction included the purchase of our 40% pro rata share of all 155 acres of Island 3, the island on which Wynn Almarjan sits. As a result, our joint venture now owns not only the land under Wynn El Marjan, but also 70 plus acres of land for potential future development on the island. Of course, we have banked land before in the U. S.

Speaker 2

In Macau and we are confident that acquiring this sizable Marjan land bank will prove valuable over the long term. As I have noted before, I believe the UAE is the most exciting new market for our industry in decades and our confidence in the demand and EBITDA potential of Wynn Almargeon continues to grow. We also made meaningful progress during the quarter on the debt financing the project and expect that we will finalize that financing later in 2024. I remain incredibly bullish about the future of our company. We have the best assets in the world's premier gaming markets.

Speaker 2

We also have an exciting high ROI development project in the UAE well underway, a development opportunity that is unique in our industry. And we are exploring potential greenfield opportunities in attractive gateway cities like New York and Bangkok. Meanwhile, our leverage profile continues to improve as free cash flow grows, allowing us to increase the return of capital to shareholders through the recurring dividend and opportunistic share repurchases. Our best days lie ahead. With that, I will now turn it over to Julie to run through some additional details on the quarter.

Speaker 2

Julie?

Speaker 1

Thank you, Craig. At Wynn Las Vegas, we generated $230,300,000 in adjusted property EBITDA on $628,700,000 of operating revenue during the quarter, delivering an EBITDA margin of 36.6%. Lower than normal table games hold negatively impacted EBITDA by around $5,000,000 in Q2. OpEx excluding gaming tax per day was $4,200,000 in Q2 compared to $3,700,000 in the prior year period. The increase was primarily due to union related payroll increases along with higher variable costs due to increased volumes across the business.

Speaker 1

We generated adjusted property EBITDA of $62,100,000 on revenue of 212.6 $1,000,000 with an EBITDA margin of 29.2%. As Craig alluded to, our table gains hold was below normal during the quarter. And if we normalize hold in both periods, EBITDA would have increased approximately 2% year on year. We've stayed very disciplined on the cost side with OpEx per day of $1,150,000 flat year on year and down sequentially. The team has done a great job mitigating union related payroll increases with cost efficiencies in areas of the business that do not impact the guest experience.

Speaker 1

Our Macau operations delivered adjusted property EBITDA of $280,400,000 in the quarter on 885 point $3,000,000 of operating revenue. Hold was a mixed bag in the quarter as higher than normal hold at Palace was more than offset by lower than normal hold at Wynn Macau, particularly in our mass table business. All in, we estimate hold negatively impacted EBITDA at the combined properties by around $3,000,000 during the quarter. EBITDA margin was 31.7% in the quarter, an increase of 250 basis points relative to Q2 2019. Our OpEx, excluding gaming tax, was approximately $2,500,000 per day in Q2, a decrease of 19% compared to $3,200,000 in Q2 2019 and down 3% on a sequential basis.

Speaker 1

The team has done a great job of staying disciplined on costs, and we remain well positioned to drive strong operating leverage as the market continues to recover. In terms of CapEx in Macau, we're currently advancing through the design and planning stages on several of our concession commitments. And as we noted the past few quarters, these projects require a number of government approvals, creating a wide range of potential CapEx outcomes in the near term. As such, we continue to expect CapEx related to our concession commitments to range between $350,000,000 500,000,000 position remains position remains very strong with global cash and revolver availability of over $3,900,000,000 as of June 30. This was comprised of $2,200,000,000 of total cash and available liquidity in Macau and $1,700,000,000 in the U.

Speaker 1

S. During the quarter, we continued to reduce gross debt, repaying approximately $170,000,000 on our bank facilities, and we have now reduced company wide gross debt by more than $1,100,000,000 over the past year. The combination of strong performance in each of our markets globally with our properties generating nearly $2,400,000,000 of trailing 12 month property EBITDA, together with our robust cash position, creates a very healthy consolidated net leverage in both the U. S. And Macau.

Speaker 1

To that end, the Wynn Resorts Board approved a cash dividend of $0.25 per share payable on August 30, 2024 to stockholders of record as of August 19, 2024. We also opportunistically repurchased approximately 741,000 shares for $68,000,000 during the quarter. Similarly, in June, Wynn Macau paid a dividend of $0.075 per share or US50 $1,000,000 highlighting our commitment to prudently returning capital to shareholders. Finally, our CapEx in the quarter was $94,000,000 primarily related to the Villa renovations and food and beverage enhancements at Wynn Las Vegas, concession related CapEx in Macau and normal cost maintenance across the business. Additionally, as Craig noted, we contributed $356,500,000 of equity to the Wynn El Marjan Island project during the quarter, bringing our total equity contribution to date to $514,400,000 split approximately 300,000,000 dollars for Wynn Al Marjan and a little over $200,000,000 for the Marjan Land Bank and related infrastructure.

Speaker 1

We estimate our remaining 40% pro rata share of the required equity is approximately $900,000,000 fully loaded for capitalized interest fees and certain improvements on the island. Importantly, as Craig noted, we've also made meaningful progress on the debt financing for the project with significant interest from a diverse group of banks, both locally in the region as well as internationally. We expect the financing will be completed later this year, and we will update you in due course. With that, we will now open up the call to Q and A.

Operator

Thank Our first question comes from Carlo Santarelli with Deutsche Bank. You may go ahead.

Speaker 3

Hey, thank you. Good afternoon, everybody. Craig, you spoke a little bit about Las Vegas, the comfort you're seeing in the trends in July, acknowledging obviously August booking window is short, September some group on the books and Q4 probably very limited visibility at this point outside of the group bookings. How would you characterize kind of the back half of the year? And could you talk a little bit about kind of that group footprint that's already in

Speaker 2

place? Sure, Carlo. I'll start and then I'll ask Brian to talk a bit about group in Q3, Q4. Yes, I noticed subsequent to one of our peers reporting the other day that there was some thoughts around Q4, some concerns around Q4. As you said, actually, the booking window is relatively short other than for group and then certain special events, F1 in particular.

Speaker 2

And so we don't we're not seeing anything of concern per se with respect to Q4. F1 specifically, which I know was mentioned extensively again on a peer's call, F1, they're really top notch operators. And unlike last year when they heavily marketed throughout the year, they just started their big marketing push for the race this month, August. So I'm sure the race will be well executed. Our experience during last year's F1 and more recently during the Super Bowl tells us that we will be the place to see and be seen during the race.

Speaker 2

And so group in Q3 and Q4 and any other thoughts on the back half

Speaker 4

of the year? Sure. Thanks, Greg.

Speaker 2

Carlo, Q3

Speaker 4

continues to pace very well. It's solid. August September look even better than July. And we look to Q4, pacing well for the year, will be the best year we've ever had in group and convention. And 25 seems to be pacing actually ahead of that, all with strong ADR growth.

Speaker 4

So the sales team has done a phenomenal job and our yield management team and revenue management continues to yield of that strong base. So it helps all segments. So I think we're in solid shape, but more encouraged by what we're seeing.

Speaker 3

Great. Thanks, Brian. And then Craig, if I could ask a follow-up, you guys have repurchased year to date as of sixthirty, it looks like about $80,000,000 of stock. I think Julie said $68,000,000 in the quarter in the release. When you look at kind of current valuation, looked at many different ways, but obviously just about any way you cut it, the embedded implied valuation for the domestic assets at the very least is seemingly compelling from a buyback perspective, acknowledging there is significant capital going out the door related to UAE.

Speaker 3

How do you think about kind of perhaps accelerating some of the buyback activity?

Speaker 2

Thanks, Carlo. Well, as you know, you've followed the So you're right. To that end, we did purchase in the quarter, and we continue to purchase into July and actually the 1st few days of August actually. We still have some $365,000,000 of capacity under the Board authorization. We're really balancing all of our liquidity needs between capital deployment for growth, the UAE, potentially other greenfield markets, delevering slightly and returning capital to shareholders through dividends and share repurchases.

Speaker 2

Fortunately, we're in a position to do all of that. And so as you rightly note, it's really a question of quantum and we'll continue to be opportunistic about it.

Speaker 3

Thanks everybody.

Operator

Thank you. Our next question is from Joe Greff with JPMorgan. You may go ahead.

Speaker 5

Hey, Craig. Earlier you had mentioned that you saw a nice rebound in market share in July. That was more of a directional comment than one with any specific numbers associated with that. Would you say that the share is back to the GGR share that you saw in the 1Q? Or is it really more approaching that level?

Speaker 5

And then related to that, Craig, are you seeing in July August to date as you're seeing GGR share improve, are you seeing an

Speaker 2

Well, to your second question first, there's always a relationship given the way that GAAP requires you to book rooms revenue associated with the casino. There's always a relationship between casino volumes, quality of customers and room rates. With respect to retail, the retail component of non gaming, I think the situation with respect to luxury retail in China is hopefully well understood. I think you've seen a lot of the large luxury retailers come out and make commentary on the topic. And of course, Macau and Hong Kong are not immune.

Speaker 2

I think what we've experienced is pretty consistent with our peers who have comparable retail footprints. To the first question that you raised, we're not going to provide specific numbers, but we were pleased with the bounce back in July. And as you know, market share can bounce around here and there over the course of any given year or any given quarter. And as I said in my prepared remarks, you can't take market share to the bank. So what we don't want to do is completely blow out our reinvestment levels in pursuit of market share that doesn't drive meaningful flow through.

Speaker 2

So we are being disciplined with respect to reinvestment and being aggressive in terms of going out and getting business.

Speaker 5

Great. And then with respect to your UAE project, heard all the things that you said, including the timeline for completing the debt financing. When do you think we'll actually have specific regulations out there and specifically when you get a license? I know it's been a while now.

Speaker 2

Sure. Thanks, Joe. Well, first of all, we were delighted with the public announcement of the GCGRA, the federal regulatory body for gaming. If you for, I guess, you and everybody else in the call, if you haven't taken a look at their website, we encourage you to do that. The members of that body are some of the luminaries of the industry and very, very experienced regulators.

Speaker 2

The establishment of the GCGRA creates I think hopefully creates incremental clarity for investors and financing sources. It certainly has on the bank financing side. And then you'll also note that they awarded a lottery license for the UAE, and I think that, that hopefully again gives folks comfort. I assume that they will be moving forward next to the next step in our licensure. I don't have a specific time line for you, but you can see all the momentum that's happening

Speaker 5

there. Thank you.

Operator

Thank you. Our next question is from Shaun Kelley with Bank of America. You may go ahead.

Speaker 6

Hi, good afternoon everyone. Thanks for taking my questions. Craig or for who it's right for, one thing we've been watching in the data is on the visitation front into Macau. In the Q2 in particular, these are market wide stats. It looks like it sort of fell a little bit below trend line and a little bit below the pace of recovery we had been seeing in prior quarters.

Speaker 6

I'm curious, do you see something similar in volumes to the property? Perhaps you probably see it maybe would be a little more acute at the Peninsula. Appreciate base mass isn't really necessarily the pond that you swim in, but just kind of what are you seeing on that visitation front? And have some of those stresses or factors improved at all in July so far or early August or vice versa? Has it deteriorated at all?

Speaker 6

Thank you.

Speaker 2

Hi, Sean. Yes, I'm sure you saw the news flow with respect to it was merely a single day, but with respect to the recent visitation record, you're right. We don't really swim in that pond. It's not about the number of bodies, it's about the quality of the bodies. You're also correct that if we had to pick up 1 of the 2 properties that was more exposed to that, it would be downtown.

Speaker 2

And I can't say that was a meaningful impact that had a meaningful impact rather during the Q2. It was really about share. We have to fight for share every day. That's what we need to do. So I don't we don't really watch visitation numbers and think about the broader impact on our business because again for us it's about who's there not how many are there.

Speaker 6

Great. And then just maybe as a follow-up just on the spend per visit, have you seen any changes in patterns again outside maybe the luxury piece which you called out earlier? Just anything sort of else of note behaviorally for the customers that did come? And obviously they're maybe they're looking forward demanding a little bit more on the promotional reinvestment front. But just anything behaviorally or across different status levels base mass versus premium mass of note?

Speaker 2

No. There's a lot of crosscurrents happening in the economy there. So we watch that very closely. And as we've seen in this cycle and in previous cycles, the gaming business has been pretty resilient. You'll note the comment that I made to the previous caller with respect to retail and I think you see that in the retail revenue and the retail revenue trends.

Speaker 2

But with respect to gaming, we don't see that. What we see is a pretty competitive environment for market share. And so we have to be competitive and get our fair share.

Speaker 6

Thank you.

Operator

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

Speaker 7

Hey, good afternoon, everyone, and thanks for taking my questions. First on Macau, up until this quarter, your share has been pretty stable. I mean, is your sense that as GGR has slowed in or decelerated in Macau that the promotional environment has maybe stepped up a notch? And is it if so, is it multiple operators, a single operator, Cotai, Peninsula? Any additional color would be helpful.

Speaker 2

Sure. Well, with the caveat that Macau has always been and always will be an extremely competitive market, I'm not going to comment on specific promotional activity by others in the market, but I can tell you that our reinvestment in any given quarter could move up or down 50 basis points, 75 basis points, something like that based on what we're trying to achieve. But the core of our competitive strength will always be product and service.

Speaker 7

Got it. And then in terms of Las Vegas, it seems like the Sphere calendar of events has really started to fill out nicely. To what extent are you seeing an uplift there from that customer base just given your proximity to that venue?

Speaker 2

Well, I would say anecdotally, it is impactful. I say anecdotally because we have so much going on both in terms of internally generated events and programming that we're doing here and citywide events that are happening or events that are happening at other properties. So I mentioned in my prepared remarks, we've done some $970,000,000 in EBITDA out of Wynn Las Vegas over the trailing 12 months. That's a real credit to the team here. So every little bit counts.

Speaker 2

I can't isolate any particular event short of, of course, the major events like F1, Super Bowl, things like that. And as I said on a previous call, we're delighted to have the Sphere and their team as neighbors. We love innovators. We love people that do things at cutting edge and drive high quality visitation.

Speaker 7

Great. Thanks so much.

Speaker 4

Sure.

Operator

Thank you. Our next question is from Stephen Grambling with Morgan Stanley. You may go ahead.

Speaker 8

Thank you. I guess sticking with Vegas, Craig, you've been in and around the industry for and seen multiple cycles. I guess with all the concerns mounting over the consumer, what are you on watch for in your business as perhaps a leading indicator? And how do you think about the operating leverage of the business now versus history in terms of being able to flex if the market changes?

Speaker 2

Yes, good question. Thank you. What do you look for? High end wine sales, club sales? I mean, we can go all day.

Speaker 2

I mean, we can look at the we can get into the weeds and talk about individual unit metrics that you would be looking at if you were on the inside of our business. We haven't seen that yet. As we've been saying now for I think we've been answering questions around the impending performance of the business for over 2 years. So we haven't seen that yet, but we're watching very, very closely to see how the consumer is behaving both in the moment and as they book, to stay with us. What can we do to the extent that the consumer was to soften a little bit?

Speaker 2

And we've talked about this on calls previously as well. I mean, we lived through a 0 revenue environment for several months and a seriously compressed revenue environment for many months after that as we went through COVID and the aftermath of COVID. That team is still here, still doing a tremendous job and we have every playbook under the sun. We've learned how to run this business far differently than we were able to pre COVID, which is part of the reason that we have been running such incredibly healthy margins and we're able to fade things like the union increases the way that we act. So we have a playbook for every possible situation, but we haven't seen any of those situations emerge yet.

Speaker 8

And perhaps as an unrelated follow-up, you mentioned the progress made in the UAE. There also looks like there's been some progress in Thailand. I guess, what are your latest thoughts on that market? Would that be something that you'd pursue? Or do you more likely to be pursued out of the Hong Kong entity?

Speaker 8

Thanks.

Speaker 2

Yes, we would pursue it out of Wynn Resorts, out of the U. S. Listed entity. It's still early days. You're right, there has been progress and it's encouraging to see and it seems as though the legislators in Thailand really want to get this moving, which is great.

Speaker 2

We need to see more pending again a deeper understanding of the regulatory and licensing structures. But the market is an attractive market and it's probably conducive to meaningful investment, pending again a deeper understanding of the regulatory and licensing structure. You have amazing tourism infrastructure. You have a really strong service culture and a favorable operating expense structure available in that market. So we're continuing to monitor the process very, very closely and we're active on the ground there.

Speaker 8

Great. Thank you. Sure.

Operator

Thank you. The next question is from David Katz with Jefferies. You may go ahead.

Speaker 9

Hi, afternoon. Thanks for taking my question. I wanted to go back to the capital allocation discussion, specifically the buyback, if I may. Obviously, it's wide ranging views about how to execute those. But with you getting your company getting to that 4 times leverage, do you think about a target leverage range separate apart from projects?

Speaker 9

And if you could go just a little farther on the philosophy around opportunistic versus programmatic in terms of the buybacks for some insight, because I think the arguments are valid that your stock may be cheap at 100 dollars right or $76 or wherever it may be? Just curious. Thanks.

Speaker 2

Sure. The second portion of your question first, we don't target we don't have target leverage levels because we will lever in place EBITDA to develop new projects. But we feel very good with where we are now. There's a WACC minimization question that needs to be answered and we're probably in that zone at the leverage level that we're at today. With respect to buybacks, it's a little bit like capital deployment.

Speaker 2

We think about these things in 5 10 year increments. So and over 5 or 10 years, increments. So, and over 5 or 10 years, there's going to be times when the stock is expensive, there's going to be times when the stock is fairly priced and there's going to be times when the stock is cheap. And so what we need to do is continuously decapitalize in an appropriate manner. And of course, we will consider whatever the implied valuation is in the equity at any given point in time, and we will act accordingly.

Speaker 2

But if we're growing the company by putting capital on the ground, we're returning to capital dividend and we are decapitalizing the business and we're doing the right thing for those who have a long term view on our business and those are the people that we care about.

Speaker 9

That's perfect. Thank you very much.

Speaker 10

Sure.

Operator

Thank you. Our next question is from Robin Farley with UBS. You may go ahead.

Speaker 11

Great, thanks. Macau question and a Vegas question. For Macau, it seems like the use of smart tables has impacted market share in Macau pretty meaningfully. If you could kind of remind us where you are with implementing those and maybe a timeframe for if there's kind of a learning curve for several quarters or something and kind of where you are with that? And then I have a Vegas question.

Speaker 11

Thanks.

Speaker 2

Sure, Robin. Yes, Smart Tables have a few they've been around for a long time, but they've really just now reached a point from a technical soundness and capability perspective where they could be really impactful. So of course, they have implications on positive implications on game security. They have some implications on OpEx. But the important aspect of them is in fact the data and the ability to ingest and act on the data, which can drive better reinvestment decisions, which I think is at the core of what you mentioned when you say that it impacts market share.

Speaker 2

We've had a test bank of Smart Tables for a while now and we're now moving to full rollout. We've made a ton of investments in the areas of analytics and data science over the course of the past several years. And I think we'll be in a position relatively quickly to both ingest and interpret and act on that data subsequent to rollout.

Speaker 11

Okay, great. Thank you. And then just on Vegas, you talked about some of the expenses of wage hikes have kind of hurt some of the EBITDA flow through. If you could just remind us when that will sort of be fully anniversaried? And then I don't know if there's anything you'd call out about comping the Super Bowl in Q1, anything you'd call out there?

Speaker 11

Thanks.

Speaker 2

Sure. We lapped the union increases a couple of days ago. So July was the last month that we were still dealing with difficult year over year comparables on those. And with respect to Q1, I don't have a view for you yet, to be perfectly honest. I mean, we how we operate, we aggressively manage revenue and we aggressively manage expenses and we'll do that throughout Q1.

Speaker 2

But what the impact of not having the Super Bowl this year will be and what that will mean to the numbers, I don't have any guidance for you yet.

Speaker 11

Okay. Thank you very much. Thanks.

Operator

Sure. Thank you. Our next question is from Brandt Montour with Barclays. You may go ahead.

Speaker 10

Thank you for the question. Good afternoon and good evening everybody. So first one on UAE. I know it's a little early maybe to start talking about or fleshing out a go to market strategy. I'm curious, just given that the location of the property, I know that your database, I'm sure, is global in nature, but I'm assuming that Europe would probably be the largest source market where you're the least exposed from a physical footprint standpoint.

Speaker 10

Maybe you could just flesh out where you think your customers are going to come from mainly out of the gate and where you plan to market the most out of the gate?

Speaker 2

Sure. Try to figure out how to condense an hour's worth of content into a response. But so the way I think about it is like this. There is not a proper integrated resort on really that half of the planet, okay? So the closest is going to be in Asia, right?

Speaker 2

Singapore or Macau. So we have this unique asset. We have a very, very robust population that is within an 8 hour flight of that asset. This is a part of the world where people are accustomed to flying longer distances in order to holiday and to visit. You have 86,000,000 airlifts coming into the Dubai airport.

Speaker 2

We're about 55 minutes via 1 of 3, 6 lane highways from the Dubai Airport. In fact, because of traffic, it's shorter to get to us than it is to get to the major areas within Dubai. And then you have 10,000,000 people locally, 9,000,000 of whom are not Emirati and therefore are able to play. So and if you compare that to Boston, if you compare that to New York City, you can see that that's a pretty favorable number. So we have a very robust go to market plan.

Speaker 2

We're not going to talk about it publicly, but we will be ready when the doors open. And I would say to your comment on Europe, yes, Europe an important market for the UAE in general. But don't forget India. India is a huge market for this part of the world. Is a lot of folks there.

Speaker 2

There is a lot of wealth in India and that's going to be an important market. And there are other parts of Asia that are big markets for the UAE as well. So it's an exciting project. I think the Cashman area is probably larger than any other project that we have done, maybe akin to Vegas. If you take into account the fact that Europe's population is pretty substantial and the international airlift is incredibly strong.

Speaker 10

Thanks for that. That was a lot of information in a short amount of time. I appreciate that. And then my second question is just on Macau and apologies for the short term question. But when your comments on July bouncing back and market share, is that do you think that's more because the competitive environment may have stabilized a little bit sequentially?

Speaker 10

Or is it just more related to the July visitation coming back and allowing sort of everything to cool off a little bit from the competitive standpoint?

Speaker 2

No. Well, 1st of all, market share can bounce in 3 people can come in and change your market share on any given day. That's the nature of the business, right? And particularly when you're operating at the high end. So market share can bounce around.

Speaker 2

I think we are in a constant process of evaluating and reevaluating not just the quantum of reinvestment that we will provide, but the form of that reinvestment and we are targeting that reinvestment at very specific segments and subsegments of the market. And so we recognized what we needed to tweak from Q2 and from June in particular, and we corrected it and we went to market with it. And we like I said, we bounced back in July, which was good to see.

Speaker 10

Perfect. Thanks, everyone.

Speaker 1

Thank you, Brent. And operator, the next question will be our last. Thank you.

Operator

Thank you. The last question is from Chad Beynon with Macquarie. You may go ahead.

Speaker 12

Afternoon. Thanks for taking my question. Greg, you highlighted just kind of the overall strength in Vegas, the $970,000,000 You guys are always out punching your weight in that market and you still have additional space to expand the property or build something differently. So kind of going back to the capital allocation question, how are you thinking about Vegas long term as a market to grow your footprint and the returns in that market versus some of the other things that you've talked about on this call? Thanks.

Speaker 2

Sure. We will grow in Vegas. It's really a question of when, not if. And we will take advantage of the land bank that we have in Las Vegas. In terms of relative returns, I think the highest relative return that we can quantify now is absolutely in the UAE on Al Marjan Island.

Speaker 2

And as I mentioned, we just took down a land bank there as well. You can look at the history of gaming markets, Macau in particular, and you can see the power of a land bank and the power of using that land bank and going to market relatively quickly. So that's top of mind for us. The other development opportunities that we have, most notably, the potential in New York and the potential in Thailand, it's too early to say what the returns will be because we don't know what the tax rate will be. And obviously, that heavily inversely correlates to what the return on the project will be.

Speaker 2

And we won't do projects, vanity projects, if those vanity projects don't deliver appropriate returns relative to everything else that we have on our plate.

Speaker 12

Thanks. And then secondly, just in terms of the different customers in your database, focusing on the U. S, I guess, mainly still in Vegas, are you seeing any change in trends with your, I guess, your high end versus your ultra high end? Anything you're able to talk about? I know retail you talked about in Macau is kind of moving with the market, but anything that you're seeing differently in the U.

Speaker 12

S. With the different levels of upper end customers in your database?

Speaker 2

Sure. Not really. So I talked about this a little bit on the last call. There is a bright side to the fact that purchasing power the purchasing power of a dollar today is the same as about $0.80 in June of 2019. We reprice our rooms every day.

Speaker 2

Our gaming customers' bankrolls are in current dollars. Of course, our invested capital and our debt is in yesterday's dollars, which is a great setup. If you look at that $970,000,000 of EBITDA on our invested capital here, it's a very, very healthy return. That being said, we don't see it and I wouldn't say that there's wide differentiation across the customer database. So again, and you referenced this, we focus on a very specific customer.

Speaker 2

Brian, anything you would add there?

Speaker 4

Yes. I'd say that the highest end of the market continues to grow for us on the name con gaming side, and the team has done a phenomenal job in capturing that business. And it's perfect for our brand, and that's where we sit and operate and do a great job. So it continues to grow.

Speaker 12

That's great. Thank you very much.

Speaker 1

Sure. Well, thank you, Chad, and thank you, everyone. We'll now close the call. Thank you for your interest in Wynn Resorts, and we look forward to updating you again next quarter.

Speaker 2

Thanks everybody.

Operator

Thank you. That does conclude today's conference. You may disconnect at this time.

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Earnings Conference Call
Wynn Resorts Q2 2024
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