Wynn CEO urges Macau incentives for hotel-room development
Deals & M&A1 min read
In brief
- Wynn Resorts CEO Billings suggested Macau should consider incentives for concessionaires to develop more hotel rooms.
- Wynn's contribution of up to US$170 million to the government fund counts towards its US$2.6 billion non-gaming pledge.
Wynn's chief executive floated the idea that Macao authorities should give concessionaires incentives to build more hotel rooms, should they want non-gaming to contribute more to the ecosystem. He was answering an analyst's question on Friday morning's earnings call about Macau's relentlessly gaming-oriented revenue mix.
Wynn also shared early views on what it put into the new US$2.5 billion investment fund of the Macau government, alongside the other five concessionaires. Concessionaires together are to put in US$1.1 billion, and Wynn's share is committed at up to US$170 million. That US$170 million is credited against Wynn's US$2.6 billion of promised non-gaming spending over its current 10-year gaming concession. Billings said the commitment can now be divided among operating expenses, capital expenses and the government's investment fund. Wynn indicated that capex is still favoured since it usually lifts traffic and EBITDA, but that the fund beats opex on EBITDA because it would be carried on the balance sheet as an asset.
Wynn's Chief Financial Officer, Craig Fullalove, said the company is still working through some of the accounting but is comfortable that it will sit on its balance sheets. He said the company considers this route preferable to funding its commitments through operating expenses.