Wynn postponing Las Vegas remodeling project due to higher tariff expenses
Wynn Resorts Ltd. is postponing a remodeling project at its Encore Las Vegas property because of potentially costly impacts of tariffs, the company’s top executive said Tuesday.
Craig Billings, CEO of Wynn Resorts, said during the company’s first-quarter earnings conference call that $375 million in projects would be delayed, but that operational expenses affected by tariffs would be “low and entirely manageable.”
Most of those operational expenses, he said, involve food and beverage and “we are actively working through alternative sourcing for the most impactful items.”
But capital expenses, he said, are a different story.
“We had a number of (capital expense) projects in flight in the U.S., and while we have sourced for those projects presuming some tariff impact, the current tariff rates have driven us to delay about $375 million of cap-ex projects, including the Encore Tower remodel,” Billings told investors at the beginning of the call.
“Once tariff rates have settled, we will thoroughly re-spec and resource the most severely affected items. While we’re staying nimble, the pace of change at the moment is just too significant to commit to revised timing on that cap-ex.”
Dip in earnings
Wynn earnings slid dramatically in the first quarter ending March 31 compared with a year ago. The company reported net income attributed to Wynn Resorts of $277 million, $2.29 a share, on revenue of $1.84 billion compared with $729.2 million, $6.19 a share, on revenue of $1.84 billion in the first quarter of 2024 when Las Vegas hosted Super Bowl 58.
Billings said if the Super Bowl weekend in 2024 were eliminated, Wynn results would have been up across the board this year.
“Our slot business continues to be a bright spot as the investments we have made in our premium slot areas and in the team have helped maintain our premium positioning,” Billings said. “Drop, handle, (revenue per available room), non-gaming revenues, and (cash flow), all up year over year.”
Billings and his team also gave updates on the company’s investments outside of Las Vegas.
In Macao, Wynn properties performed well during the recent “Golden Week” holiday and a new Gourmet Pavilion that opened at Wynn Palace resulted in 2,400 incremental daily restaurant covers at Wynn Palace, a strong indicator of additional visitation to the property.
Company officials say they are closely monitoring business in Macao in terms of tariff impacts.
Other markets
At Wynn Al Marjon Island in the United Arab Emirates, construction has reached the 47th floor of the resort’s tower.
“We will soon be commencing with the fit out of interiors in portions of the building and we’re also now sculpting the elaborate beachside poolscape. We remain on track for our targeted opening date (in early 2027), and we believe the property will be well positioned as the only integrated resort to open in the near term into what several analysts have predicted will be a $5 billion-plus (gross gaming revenue) market.”
Wynn continues to consider long-range market reach in Thailand and New York, with Billings echoing concerns similar to competitors about the potential impact of online gaming in New York.
In response to an investor’s question, Billings said the company hasn’t quite shut the door on potentially developing a resort in Japan, where MGM Resorts International recently broke ground on a $10 billion project.
“We’ll always look at any gateway city where meaningful capital can be deployed and we think the Wynn brand resonates,” Billings said. “So Japan fits that bill. There’s structural challenges in the way that the licensure and ownership have been outlined in Japan. And so, well, we look at it, of course, but it’s got to be right, and the setup has to be right for us.”
Contact Richard N. Velotta at [email protected] or 702-477-3893. Follow @RickVelotta on X.
