Las Vegas F1 Race Helps Push Wynn Resorts to Record Revenue

Article by : Erik Gibbs Feb 12, 2024

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Wynn Resorts celebrated a historic achievement in Q4, setting an all-time high in property-adjusted earnings, primarily fueled by the success of the Formula 1 Las Vegas Grand Prix.

The commitment to developing land across the Las Vegas Strip was reiterated by Wynn executives during a conference call with analysts.

CEO Craig Billings highlighted the strong business momentum throughout the year, culminating in an all-time quarterly record of $632 million in property EBITDAR (earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs), contributing to a record-setting year with nearly $2.2 billion in property EBITDAR.

Emphasizing increased diversification, particularly in Las Vegas, Wynn positions itself as a luxury leader, distinguishing itself from industry peers. Billings emphasized the company’s appeal to top-tier customers, especially those attending citywide events like F1, aligning with Wynn’s customer base.

In Macau, Wynn Resorts showcased improved margins, reducing reliance on the historically volatile VIP segment. The construction of a casino resort in the UAE serves as a strategic move to diversify the portfolio and enter new markets.

In Las Vegas, Q4 EBITDAR saw a remarkable 24% surge despite a challenging comparison to 2022. Billings attributed this success to the significant contribution of the Formula One event and heightened overall property activity.

Key financial indicators surpassed 2022 levels, with October, November, and December standing out as the best months for EBITDAR.

January’s revenue patterns mirrored those of January 2023, with robust hotel revenue, but January doesn’t mark the quarter’s peak, according to Billings.

Wynn Resorts, under the leadership of CEO Craig Billings, is strategically focusing on February, anticipating key events such as the Super Bowl and Chinese New Year, aiming for a record-setting month in group and convention activities.

The company seeks to leverage the heightened activity in February, with plans to double front money and credit for 2023, setting a positive tone for the first quarter.

In the fourth quarter, Wynn and Encore Las Vegas demonstrated robust financial performance, achieving $270.8 million in adjusted property EBITDAR on $696.8 million of operating revenue, reflecting a 38.9% margin and a notable 140 basis points increase year over year.

The CFO attributed a $10 million boost in EBITDAR to higher-than-normal table-game hold during the quarter.

Addressing the impact of Fontainebleau Las Vegas on their business, Billings expressed confidence that it hasn’t affected them significantly, especially given their focus on luxury guests.

Discussing the upcoming Super Bowl, Billings characterized it as a more corporate event, with expectations that its impact on the casino may not be as pronounced as its influence on hotel revenue.

Wynn’s strategic programming efforts over the years have played a crucial role in brand enhancement, marketing, and the augmentation of room nights and pricing.

The Sphere concert venue near Wynn properties, featuring U2 concerts on weekends, has proven to be an attractive addition. While it doesn’t directly impact rates, customer demand for rooms with a view of the venue has contributed positively to high-quality occupancies.

Looking ahead, Wynn Resorts anticipates significant growth opportunities, holding a substantial land bank in Las Vegas, including a parcel across Las Vegas Boulevard. Billings underscored that further development is inevitable and only a matter of time.