Wynn Resorts Q1 2023 Earnings Call Transcript

Presentation

[Operator]

Welcome to the Wynn Resorts First Quarter 2023 Earnings Call. All participants are in a listen-only mode until the question-and-answer session of today's conference.

[Operator Instructions]

This call is being recorded. If you have any objections, you may disconnect at this time.

I will now turn the line over to Cameron -- I'm sorry, to Julie Cameron-Doe, Chief Financial Officer. Please go ahead.

[Julie Cameron-Doe, Chief Financial Officer at Wynn Resorts]

Thank you, operator. And good afternoon, everyone. On the call with me today are Craig Billings and Brian Gullbrants in Las Vegas. Also on the line are 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, Chief Executive Officer at Wynn Resorts]

Thanks, Julie. Afternoon, everyone. And thanks for joining us today. Before we get into the specifics of the quarter, I'm pleased to say that after three years of suspension, today, we announced that we are resuming payment of quarterly dividend, initially $0.25 per share.

We have a number of growth projects in flight that require capital and will ultimately add meaningful EBITDA to our business. But with Macau returning to profitability and North America continuing to perform well above historical levels, we have sufficient financial flexibility to also return capital to shareholders.

I also want to express appreciation to our 27,000-plus team, who were once again recently recognized by Forbes Travel Guide with 24 Five Star awards, the most of any independent hotel company in the world. Thank you for all that you do.

Turning to Las Vegas. I have to tell you, it's a fascinating time in our business. Despite the confluence of high inflation, high interest rates, bank failures and increasingly difficult year-over-year comps, Wynn Las Vegas delivered an all-time record in Q1 with $232 million of adjusted property EBITDAR, supported by a consumer that continues to feel flush. We also subsequently delivered the best April in the history of the property. We continue to invest heavily in people, programming and the building to further distance ourselves as the clear leader in luxury in Vegas.

Looking ahead, we currently have a strong pipeline of forward group demand, continued rooms pricing power, healthy drop in handle and a robust programming calendar, particularly in the back half of the year. Yet I continue to watch the macro factors that I mentioned earlier. And I will note that, with Q2 2023, we will begin comping against some very strong prior year quarters.

Lastly, just as I have the past several quarters, I will continue to tell you exactly what we're seeing. And right now, things feel good around here.

Turning to Boston. Like Vegas, Encore had a strong quarter, generating $63 million of EBITDA. We saw strength across the casino in terms of table drop, slot handle and overall GGR. On the non-gaming side, we delivered strong hotel revenue, driven by both ADR and occupancy. The strength has continued into Q2 with EBITDA per day in April largely consistent with trends we have experienced over the past few quarters.

We also launched retail sports betting at Encore Boston Harbor in Q1, which helped drive a 20% increase in sign-ups to our Wynn Rewards loyalty program year-to-date. I expect the book will continue to be a significant driver for new customer acquisition over time.

On the development front in Boston, we finalized the interiors and began to buy out structural materials for our upcoming projects across the street from the property that will add incremental parking, food and beverage and entertainment amenities.

Turning to Macau. We generated $156 million of EBITDA in the quarter with lower-than-normal VIP hold negatively impacting EBITDA by about $10 million. In the casino, mass table drop reached 82% of Q1 2019 levels, and our VIP hold normalized market share was over 14% during the quarter despite unusually low hold in our mass business at Wynn Macau and the fact that significant portions of Wynn Macau's east casino were closed for renovation during the quarter. Encouragingly, that market share was consistent with full year 2019 levels.

On the non-gaming side, our retail business was incredibly strong with tenant retail sales increasing 60% compared to the first quarter of 2019, once again highlighting the strength of our premium consumer.

Looking forward, as you have seen, market-wide GGR momentum in Macau has been very impressive, building through the first quarter and accelerating into April. Who would have thought even six months ago that the market would be run rating north of $22 billion of annual GGR. In April, our mass drop per day increased versus Q1, our direct VIP turnover per day increased meaningfully versus Q1, and occupancy and retail sales were very healthy.

More recently, the May Golden Week holiday period was particularly strong, outperforming Golden Week 2019 in several key areas. In the casino, our overall mass table drop during the holiday period was nearly 10% above 2019 Golden Week levels, and our direct VIP turnover was more than double 2019 levels.

Outside of gaming, our tenant retail sales increased 36% compared to Golden Week 2019, and our hotel occupancy was 95%.

Performance during and after the quarter was skewed towards Wynn Palace, driven both by the mix of customers that have returned to Macau in the initial reopening wave and the renovation-related closures at Wynn Macau that I mentioned earlier. We are making a number of changes and improvements to Wynn Macau that I expect will drive longer-term market share gain. In the meantime, I expect that Wynn Palace will continue to pace ahead of Wynn Macau in the recovery.

On the development front in Macau, we are deep into design and planning for our concession related capex commitments, which we believe will help support Macau's long-term diversification goals and be additive to our business over the coming years. We look forward to telling you more in due course.

Lastly, I hope that you were all able to review the information we provided a couple of weeks ago on Wynn Al Marjan Island, our planned integrated resort in the UAE. If you haven't listened to the presentation or read through the slide deck, you can find both on our IR website.

I'm incredibly proud of the program and design elements we have put together thus far. And as we noted in the presentation, we think the resort will generate between $450 million and $600 million of steady-state EBITDA. The combination of our 40% equity ownership in the project along with our management and license fees will drive a very healthy ROI for Wynn Resorts shareholders.

With that, I'll now turn it back to Julie to run through some additional details on the quarter.

[Julie Cameron-Doe, Chief Financial Officer at Wynn Resorts]

Thank you, Craig. At Wynn Las Vegas, we generated an all-time record of $231.6 million in adjusted property EBITDA on $586.8 million of operating revenue during the quarter. Higher-than-normal hold positively impacted EBITDA by around $4 million in Q1. Our hotel occupancy was 88.8% in the quarter, up 1,190 basis points year-over-year and up 620 basis points versus Q1 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 $493 during Q1 2023, up 14.1% versus Q1 2022 and 46% above Q1 2019 levels. Our other non-gaming businesses saw broad-based strength across food and beverage, entertainment and retail, which were up nicely year-over-year and also well above pre-pandemic levels.

In the casino, our Q1 2023 slot handle increased 33.5% year-over-year and was 99% of our Q1 2019 levels. Similarly, our table drop was up 9.6% year-over-year and was 49% of our Q1 2019 levels. The team in Vegas has done a great job of controlling costs without negatively impacting the guest experience, delivering adjusted property EBITDA margin of 39.5% in the quarter.

On a hold-normalized basis, our EBITDA margin was up approximately 300 basis points year-over-year at approximately 1,400 basis points compared to Q1 2019. Opex excluding gaming tax per day was $3.7 million in Q1 2023, which was flat sequentially and up 20% compared to Q1 2019 levels, but well below the 46% increase in operating revenues.

Turning to Boston. We generated adjusted property EBITDA of $63.4 million, with EBITDA margin of 29.3%. We saw broad-based strength across casino and non-gaming during the quarter. In the casino, we generated $191 million of GGR, a property record, with strength in both tables and slots.

Our non-gaming revenue grew 21% year-over-year to $50.9 million, with particular strength in hotel and food and beverage. We've stayed very disciplined on the cost side with opex excluding gaming tax per day of approximately $1.17 million in Q1 2023. This is up relative to Q1 2022 on increased business volumes and flat sequentially.

As we've discussed on prior calls, the year-over-year EBITDA and opex comps were impacted by contractual labor agreements, which added around $45,000 per day to our opex base beginning late in Q2 2022. We're well positioned to drive strong operating leverage as we continue to grow the top line over time.

Our Macau operations delivered adjusted property EBITDA of $155.8 million in the quarter on $600.1 million of operating revenues. Lower-than-normal VIP hold negatively impacted EBITDA by around $10 million in Q1. As Craig noted, we were encouraged by the meaningful uptick in visitation and demand we experienced during the quarter, with particular strength in mass casino and luxury retail sales.

Our opex excluding gaming tax was approximately $2.3 million per day in Q1, a decrease compared to $3.2 million in Q1 2019 and up modestly from Q4 despite the meaningful sequential increase in business volumes. The team has done a great job remaining disciplined on costs, and we're well positioned to drive strong operating leverage as the business recovers over time.

In terms of capex, we're currently advancing through the design and planning stages on our concession commitments. And as we noted last quarter, 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 continue to expect capex related to our concession commitments to range between $50 million to $220 million.

Turning to Wynn Interactive. Our EBITDA burn rate decreased both sequentially and year-over-year to $21.1 million in Q1 2023. Our team continues to stay disciplined on cost, while driving improved marketing efficiencies.

Moving on to the balance sheet. Our liquidity position remains very strong with global cash and revolver availability of approximately $4.7 billion as of March 31. This was comprised of $1.6 billion of total cash and available liquidity in Macau and $3.1 billion in the US.

Importantly, the combination of very strong performance in Las Vegas and Boston, with the properties generating over $1.1 billion of adjusted property EBITDA in the 12 months through March 31, together with our robust liquidity, creates a very healthy leverage profile in the US.

As Craig noted, with our properties performing well in each of our markets and our robust liquidity, we're pleased to announce that the board approved the resumption of our quarterly dividend with a cash dividend of $0.25 per share payable on June 6, 2023, to stockholders of record as of May 23, 2023, highlighting our commitment to prudently returning capital to shareholders.

Finally, our capex in the quarter was $124 million, primarily related to the spa and villa renovations and F&B enhancements at Wynn Las Vegas and normal course maintenance across the business.

With that, we will now open up the call to Q&A.

Questions and Answers

[Operator]

Thank you.

[Operator Instructions].

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

[Carlo Santarelli, Analyst at Deutsche Bank Aktiengesellschaft]

Hey, everyone. Thanks for taking my question. Craig, as you -- you talked about some of the work you guys are doing on the Peninsula at that asset. How much of the, I guess, trailings of that asset relative to Cotai is related to the work versus how much of the overall recovery that you've experienced or the market has experienced in Cotai, how much does the peninsula lag that? And what do you think -- or what do you think it takes to narrow that gap in the resumption of attempting to attain 2019 levels in both geographies?

[Craig Billings, Chief Executive Officer at Wynn Resorts]

Sure. No problem. Carlo, thanks for the question. So first, it's important to note, we don't normalize for mass hold. And so, when we talk about normalized numbers, they don't include any unusually low hold in that. And we did hold low in mass at Wynn Macau in the quarter. But, certainly, and I called it out for a reason, Wynn Palace is leading the charge amongst our two properties as the market comes back.

There's really a few factors at play. I think everybody who follows Macau closely knows that GGR and visitation were somewhat disconnected in the initial waves, in that you had a lot of dedicated players come back. A lot of those players -- most of those players are rated players. And they weren't coming with tour groups. They were coming as individual visitors and they disproportionately, at least within our business, ended up at Wynn Palace on Cotai. Wynn Macau historically has been more exposed to tour group business, general unrated business, et cetera, et cetera. So I'm not surprised from that perspective that Wynn Palace led Wynn Macau. That's the first point.

The second point is that there are a number of changes that we're making to Wynn Macau. The property needs to be refreshed, and we're making those changes now. We did start those in Q1, including some pretty significant refreshment of the east casino there, which disrupted significant numbers of pits concurrently. They were effectively closed during the quarter. So that also had an impact.

So I think as the market continues to recover, as more unrated play comes back to the market, as more tour groups come back to the market, then we'll get the natural benefit downtown. And then, of course, we're trying to make the property the best that it can be to take as much market share as we possibly can. But in the interim, as I said, I would expect Palace to lead Wynn Macau.

[Carlo Santarelli, Analyst at Deutsche Bank Aktiengesellschaft]

Thank you. That's helpful. And then as a follow-up, obviously, there's plenty of development activity. There's obviously some spend on Cotai and your contributions down the road for the UAE development. What was the primary thought process and driving factors and the decision to reinstitute the dividend?

[Craig Billings, Chief Executive Officer at Wynn Resorts]

Thanks, Carlo. Yes, the dividend, as we always talk about with our investors, the dividend is the cornerstone of our capital return strategy. And the US business is getting plenty of cash flow, Macau is coming back quickly and so now we are doing exactly what you just alluded to. We're balancing these high-ROI development projects in Boston and the UAE. We're preserving a bit of capital related to New York City to the extent that that advances. And on the other side, our desire to re-implement that dividend and return capital. So we felt like this initial dividend was a great place to start. And from there, stay tuned. We'll see how we grow it over time.

[Carlo Santarelli, Analyst at Deutsche Bank Aktiengesellschaft]

Great. Thank you, Craig.

[Craig Billings, Chief Executive Officer at Wynn Resorts]

Thanks.

[Operator]

Thank you. Our next caller is Joe Greff with J.P. Morgan.

[Joseph Greff, Analyst at J.P. Morgan]

Good afternoon, everybody.

[Craig Billings, Chief Executive Officer at Wynn Resorts]

Hi, Joe.

[Joseph Greff, Analyst at J.P. Morgan]

Craig, it looks like EBITDA margins on net revenues in Macau in March were about 30%. I just want to make sure my math is right on that. And then when I just look at overall opex growth versus net or gross revenue growth, it looks like opex growth is approximately half of revenue growth. Do you think that can continue or do you think opex growth is lagging because of labor constraints and maybe other nuanced things in the Macau marketplace?

[Craig Billings, Chief Executive Officer at Wynn Resorts]

Thanks, Joe. The market is structurally different than it was in 2019 and before for a few reasons. I think the change in the junket environment and the shift to mass is well understood. On the opex side, the concessionaires were encouraged to, and generally did, maintain labor throughout the course of the shutdown. There are components of the labor pool where I think all of us were able to -- particularly with respect to some foreign labor, where we were able to trim. And so, I think I've heard comments from some of our competitors that they were bringing labor back on, particularly on the housekeeping side, et cetera, et cetera.

I think that's generally true for us. We have been operating at full capacity since the day the market reopened. We're probably light in a couple of labor categories, not high-dollar labor categories. So I don't think we're in a situation where certainly our fixed costs are going to meaningfully accelerate as the market accelerates. And I would expect some pretty healthy operating leverage coming out of the business over the course of the next couple of years.

If you look at where Palace printed this quarter, you can look at that relative to 2019 and you can see that there was distinct margin improvement. Our service levels certainly haven't degraded versus 2019. So I'm pretty bullish.

[Joseph Greff, Analyst at J.P. Morgan]

Great. And I was hoping you can maybe put a little bit more meat on the bones with respect to your comments about April and Macau in terms of an EBITDA run rate. I don't know if you want to look at it as a percentage growth rate in relation to March or for the full quarter, but any additional details would be appreciated.

[Craig Billings, Chief Executive Officer at Wynn Resorts]

Well, I would just say our average EBITDA per day in April was up over our average EBITDA per day in Q1. You saw what the market did. The market grew quite healthy from both February to March and then March to April. And we had 14% share in the first quarter. So I think you can probably do the math from there.

[Joseph Greff, Analyst at J.P. Morgan]

Great. Thanks so much guys.

[Craig Billings, Chief Executive Officer at Wynn Resorts]

Sure.

[Operator]

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

[Shaun Kelley, Analyst at Bank of America Securities]

Hi. Good afternoon, everyone. Thank you for taking my question. Just was hoping we could get a little bit more color on the recovery you're seeing maybe in the VIP segment. So, obviously, I think you called out direct being, I think, double over the Golden Week holiday. But maybe just in general, how you're serving that higher-end customer, where you see them playing on the floor? Just kind of behaviorally, how has the market kind of adapted and adjusted to that and how your direct program has evolved as well?

[Craig Billings, Chief Executive Officer at Wynn Resorts]

Sure. I think, it's -- Shaun, I think it's honestly a little bit too early to forecast the overall trajectory of VIP, both direct and junket. But certainly, we were pleased with turnover in both the quarter and subsequent to, including Golden Week. I think it's a testament to how much Macau in general and we, in particular, have to offer those customers, including those from broader Asia. So we're watching the situation closely. Stay tuned.

I don't think there's been a lot of, frankly, changes in terms of how we execute in direct. We certainly have developed some incremental relationships, player referral relationships outside of the traditional markets, and that's part of the broader mandate to improve international visitation to Macau. But the way that we underwrite credit, the way we think about extending credit, none of that has changed. So we'll see how it develops over the course of the next couple of quarters. But overall, I think we've been pleasantly surprised.

[Shaun Kelley, Analyst at Bank of America Securities]

Thank you for that. And then as my follow-up, could you just -- going back to the renovations for a second on the Peninsula, your expectations for when those should conclude or if they don't conclude entirely sort of become materially less of a headwind from here, how long that program is expected to last?

[Craig Billings, Chief Executive Officer at Wynn Resorts]

The material impact will subside this quarter. So we had the portions of the main floor on the east side closed at various points throughout Q1. That's complete. Now we're doing some work in some of our adjacent salons, and that will complete this quarter. There's a number of other things that will have a longer tail, but it shouldn't impact revenue the same way.

[Shaun Kelley, Analyst at Bank of America Securities]

Thank you very much.

[Operator]

Thank you.

[Operator Instructions].

Our next caller is Dan Politzer with Wells Fargo. You may go ahead, sir.

[Daniel Politzer, Analyst at Wells Fargo Securities]

Hey, good afternoon, everyone. Thanks for taking my questions. I wanted to actually pivot to Wynn Al Marjan. Can you maybe talk about how we should think about this property evolving over time in terms of the timing of your capital commitment, maybe the financing breakdown versus the equity contributions versus debt, gaming versus non-gaming? Just any additional color. And I appreciate that the presentation was pretty thorough. But just as we think about this going forward and over the next few years, that would be helpful. Thank you.

[Craig Billings, Chief Executive Officer at Wynn Resorts]

Yeah, sure. Think about it as a $4 billion project for now. Think about it as 50% equity, 50% construction-related financing with the exact percentage TBD. Think about the equity going in pro rata with the construction cost, that's always a debate you have with the financing sources. So we'll see how that goes, but that's the way that I would model it for now.

I've talked a bit about this on prior calls. The market in Dubai from a non-gaming perspective is incredibly healthy. If you look at ADRs, if you look at spend on food and beverage, if you look at spend on luxury retail, it's tremendous. And so, we think that this -- the more time we spend there, we think that this business is much more akin to our Las Vegas business than it is, say, Macau or Boston, which are primarily gaming-centric markets. So we think that this will be a healthy balance of gaming, non-gaming and that that will allow us to provide a very full and high-quality experience and generate very healthy returns.

[Daniel Politzer, Analyst at Wells Fargo Securities]

Got it. And then just in terms of Macau, I know there was a couple of moving pieces in the quarter. Is there any way to maybe quantify -- and I recognize that this is not something you would typically adjust for, but that mass hold in the quarter in terms of the impact to EBITDA, as well as that construction disruption and just as we kind of think about in a normalized scenario going forward, that would be helpful.

[Craig Billings, Chief Executive Officer at Wynn Resorts]

Yeah. So there's probably 500 basis points of low mass hold, plus or minus. You have the statistics in the press release, you have drops, so you can apply that to it. And the construction disruption, we have not quantified.

[Daniel Politzer, Analyst at Wells Fargo Securities]

Got it. Thanks.

[Operator]

Thank you. Our next caller is David Katz with Jefferies. You may go ahead sir. David, your line is open. Possibly your mute is on.

We'll go to the next caller. Robin Farley -- you may go ahead -- with UBS.

[Robin Farley, Analyst at UBS Group]

Great. Thanks. I just wanted to circle back to your comments about VIP hold and the fact that it was at two times the level of 2019, your direct business for Golden Week. If we think about your direct VIP business in 2019 being maybe 15% of total VIP, is it reasonable to think you could get back to 30% of previous VIP levels or even higher since this is really just out of the box here under the new regulations?

[Craig Billings, Chief Executive Officer at Wynn Resorts]

Well, thanks, Robin. I think what's unknown at this point is the denominator in your equation. So we don't know what total VIP will be yet, right? We need to really see how that develops over the course of the next couple of quarters. There's really no legal or structural impediments to us returning to our prior direct VIP business or, frankly, exceeding it. It's unaffected by -- generally unaffected by the legal changes that happened. So I think that we were--

[Robin Farley, Analyst at UBS Group]

That's what I was suggesting. In other words, if you were at two times the level already for Golden Week that you could -- in other words, is there a reason that wouldn't be a sustainable rate of recovery of your previous what was direct, that you'd be able to recapture some of what have been junket business at that same level or even higher?

[Craig Billings, Chief Executive Officer at Wynn Resorts]

No. There's no reason that we couldn't do that, other than credit underwriting. What we won't do is underwrite players that we're not comfortable with from an asset perspective. So with that caveat, no, there's nothing that could stop that.

[Robin Farley, Analyst at UBS Group]

Okay. Thank you.

[Craig Billings, Chief Executive Officer at Wynn Resorts]

Sure.

[Julie Cameron-Doe, Chief Financial Officer at Wynn Resorts]

We will take one last question, operator.

[Operator]

Thank you. John DeCree with CBRE. You may go ahead.

[John Decree, Analyst at CBRE]

Hi. Good afternoon, everyone. Thank you taking my question. Maybe bring the conversation back home for one in Las Vegas, obviously, a fantastic quarter for you guys in the market as a whole. And two kind of customer segments that we're paying attention to is the international customer and convention recovery. Presumably, we've seen both of those kind of accelerate in 1Q. So curious to get your thoughts on where the recovery of those two segments are for Wynn specifically and how much room you see in front for those kind of two customer segments relative to 2019?

[Craig Billings, Chief Executive Officer at Wynn Resorts]

Sure. I'll cover international and then I'll ask Brian to talk about the group and convention pacing. On the international side, you're right, the market has not gotten back to its full pre-COVID levels. It's really been a geography-by-geography question. LatAm started to return early. Europe has started to come back. And so, there are certainly opportunities in international. I do want to -- I would specifically call out China and Mainland Chinese guests where we don't know yet because it's very, very early there. And so, we'll see how that plays out. But international is starting to trickle back. And I think that that will be a tailwind as we move through 2023 with the caveat that I mentioned with respect to seeing how China plays out.

Brian, do you want to comment on our group and convention pace?

[Brian Gullbrants, Chief Operating Officer of North America at Wynn Resorts]

Sure. Thanks, Craig. John, yeah, I would say that group is back beyond 2019 levels at this point. When you look to Q1 and what we did, the team did an amazing job. We had one of our best -- well, we had the best convention group revenue we've ever had. We had all the stars line up, CES, Homebuilders, CONEXPO. It was just a phenomenal quarter, which then helped drive the record quarter.

If you look forward, I think the group business is solid. Our team has done a great job. We're pacing towards record group room nights for this year with very strong ADRs. We built a solid base that will allow us to yield manage our rooms in the other segments as we move forward. And right now, 2024, knock on wood, 2024 is actually pacing ahead of what we believe will be a record 2023. So, yes, we're back to beyond 2019 levels, and we see this right now continuing. We're looking for the signs. Don't see any signs of softening yet, but we're going to be cautious and react if we have to. But right now, it looks pretty good.

[Craig Billings, Chief Executive Officer at Wynn Resorts]

And we have -- again, as Brian said, it's proven to be interesting. I think everybody, at least that we talk to on the sell side and the buy side, keeps waiting for a shoe to drop in Vegas. And it hasn't to date. Now, we have a 2023 playbook, 2024 playbook for every possible scenario because we learned how to operate our business incredibly efficiently as we went through all the various iterations of COVID. So we feel great about where we are. We're ready for anything, and we'll see how we go.

[John Decree, Analyst at CBRE]

Thanks. That's really helpful. Maybe as a follow-up, one more on Macau. Craig, could you kind of give us your insights on the competitive landscape, I guess, particularly on the direct VIP and premium mass? It seems like there's been plenty to go around so far in early recovery, but curious to get your updated thoughts on player reinvestment and how competitive or promotional the market has been, if at all.

[Craig Billings, Chief Executive Officer at Wynn Resorts]

Sure. It's early, right? And a wise person once told me that half of great strategic thinking is ignoring noise, and there is a tremendous amount of noise in the market in Q1. We had competitors with rooms out of commission. We had hold volatility because, in the early portion of the quarter when you have lower volumes, you inherently have hold volatility. You have a lot of things. You have the market compounding month-over-month and growing month-over-month and creates a lot of noise.

But in general, I would say that the market is coming back much more quickly than anybody would have thought of certainly six, nine months ago. It's incredibly good to see. The margin profile of the businesses across Macao looks pretty strong, which would indicate to me that reinvestment rates are relatively disciplined, which is good. And I think that, overall, the behavior in the market is quite rational. So, I think the next couple of months, the next quarter, quarter and a half, I think will be telling to see what the pace and size of the recovery is. If you -- who can imagine that we're run rating $22 billion of GGR right now.

For us, if you kind of roll the business forward and do your modeling, what you'll find is that at around $26.5 billion of GGR, our combined properties start to produce the EBITDA -- something close to the EBITDA that they produced in 2019, which is pretty unbelievable. And so, I think as you see the market continue to gain momentum, and we've all -- all of us in that market have been around the back many, many times, we've been through ups, downs and everything else, I think you'll see the concessionaires behave relatively rationally. And I think it's good for the market. It's good for us. It's good for them.

[John Decree, Analyst at CBRE]

Yes. That sounds very encouraging, Craig. Thanks so much. And thanks, everyone. Congratulations on a great quarter.

[Craig Billings, Chief Executive Officer at Wynn Resorts]

Thank you. Appreciate it.

[Julie Cameron-Doe, Chief Financial Officer at Wynn Resorts]

Thank you. Well, with that, we'll close the call. Thank you for your interest in Wynn Resorts and we look forward to sharing more information with you next quarter.

[Operator]

[Operator Closing Remarks]

Participants

Corporate Executives

• Julie Cameron-Doe, Chief Financial Officer
• Craig Billings, Chief Executive Officer
• Brian Gullbrants, Chief Operating Officer of North America

Analysts

• Carlo Santarelli, Deutsche Bank Aktiengesellschaft
• Joseph Greff, J.P. Morgan
• Shaun Kelley, Bank of America Securities
• Daniel Politzer, Wells Fargo Securities
• Robin Farley, UBS Group AG
• John Decree, CBRE