Wynn Resorts CEO Craig Billings, touting a record-setting 2024 and strength in 2025 in Las Vegas, said the gaming operator will continue to buy back its stock, because the value won’t be recognized until after the $5.1 billion Al-Marjan Island casino resort in the United Arab Emirates debuts in 2027.
During a conference call Thursday with Wall Street analysts, Billings spent a lot of time highlighting Wynn’s stock. It closed Thursday at $80.47, well below its 52-week high of $110.38.
Wynn reported that its fourth-quarter and full-year results reflected strength throughout its businesses, setting another full-year record for adjusted property EBITDAR and an annual record in Las Vegas.
The company reported that it enjoyed a strong quarterly performance in Las Vegas on “very tough” comparisons and drove healthy market share in Macau led by strength in both premium mass and VIP.
The Wynn Al Marjan Island resort project was also a big focus during the earnings call. Billings said the 35th floor of the hotel tower was recently completed. He reiterated confidence that the resort will be a must-see destination and will support strong long-term free-cash-flow growth with no competition on the horizon. Wynn expects the UAE to be a $3 billion to $5 billion gaming market over time and Billings described it as the most exciting new market for the industry in decades.
The Al Marjan Island project marks the first casino project in the Middle Eastern country, as part of joint venture with affiliates of Wynn Resorts and Marjan and RAK Hospitality Holding, of which Wynn owns 40%.
Billings lamented that Wynn has been active over the last three years in making changes and investments in its businesses in Las Vegas, Boston, and Macau. Those include marketing, implementing underlying technology, and building in customer-service programs for food, retail, and entertainment. It has also changed how it controls expenses to further distance itself from competitors.
“You can see that in our 2024 results,” Billings said, adding that its UAE project will produce “meaningful EBITDA and further diversify our business. The opening of the resort, along with the reduction in capital expenditures deployed in North America, will be an important inflection in free cash flow.
“This bright future, coupled with the fact that our stock price continues to inappropriately reflect the value of our assets, drove us to repurchased$200 million of stock in the fourth quarter and another $150 million thus far in Q1,” Billings said. “While industry multiples remain suppressed and growth capital remains focused on a narrow set of AI and tech companies, until we believe Wynn Al Marjan is appropriately reflected in our valuation, we will continue to repurchase our equity, because we believe the return profile on those repurchases is meaningful.”
As of December 31, Wynn had $813 million in repurchase authority remaining under the equity-repurchase program.
“We’re going to continue to support the stock while the getting is good,” Billings said. “We’re not buying back stock for an immediate market response. We’re buying back stock because we believe it’s a good value in the long term and we’re thinking about the long term.”
As for unlocking value abroad, Billing isn’t expecting every Emirate in the UAE to have gaming. That’s part of what makes them bullish about an Emirate that already gets two million visitors a year.
“The propensity to spend on luxury hotel and food and beverage in the Emirates is extremely high,” Billings said. “We firmly believe this business will be akin to Vegas, instead of Macau, where we can drive material non-gaming revenues. Anybody who is a high-value customer globally, we should know. Our ability to attract those folks and bring them to Wynn Al Marjan, I like our odds.”
As for other options, Billings said they don’t believe in the sale of real estate, which they view as a financial transaction, as opposed to unlocking and creating value.
For the full year, adjusted property EBITDAR was $2.36 billion, an increase of $250 million compared with $2.11 billion for 2023. For the year, adjusted property EBITDAR increased $117.9 million, $103.8 million, and $0.5 million at Wynn Palace, Wynn Macau, and the Las Vegas operations, respectively, and decreased $10.3 million at Encore Boston Harbor from 2023.
Operating revenue was $1.84 billion for the fourth quarter, flat compared to operating revenues of $1.84 billion for the fourth quarter of 2023. For the fourth quarter of 2024, operating revenue increased $38.6 million and $2.7 million at Wynn Palace in Macau and its Las Vegas operations, respectively, and decreased $22.5 million and $4.5 million at Wynn Macau and Encore Boston Harbor, respectively, from the fourth quarter of 2023.
Adjusted property EBITDAR was $619.1 million for the fourth quarter, a decrease of $11.3 million compared to $630.4 million for the fourth quarter of 2023. For the fourth quarter of 2024, adjusted property EBITDAR increased $13.5 million at Wynn Palace and decreased $17.7 million, $5.5 million, and $3.3 million at Wynn Macau, Encore Boston Harbor, and the Las Vegas operations, respectively, from the fourth quarter of 2023.
Las Vegas generated $267.4 million in adjusted property EBITDAR during the fourth quarter on $699.5 million in operating revenue, delivering a margin of 38.2%. Higher than normal table game hold positively impacted EBITDAR by more than $30 million.
Billings said demand remained healthy during the fourth quarter in Las Vegas, with table drop flat on a difficult comparison to the fourth quarter of 2023. Slot handle, however, rose 13% and the gaming market share in Las Vegas “grew meaningfully.”
Wynn executives said they expanded the high-limit room and focused on the mix of games and service in Las Vegas.
Non-gaming business was also strong, though impacted by a difficult year-over-year comparison with the Formula One race week in 2024. EBITDA during the event in 2024 was about $20 million lower than 2023, Billings said. Most of the decline was due to revenue per room stemming from lower Las Vegas room rates. At Wynn, however, room rates were about 50% higher than the two closest competing properties. The daily EBITDA remained elevated compared to years prior to the F1 race arriving in Las Vegas.
In January, demand looks good with both drop and handle up year-over-year and average daily room rates and food and beverage up over 2023. There’s been strong booking demand and over the last 10 days, seven of them have had rates higher than the past couple of years, Billings said. Retail sales were up 3% in January.
“We feel really good about where we are and the set up for 2025,” Billings said.
February’s numbers will be impacted by the comparison with the Las Vegas Super Bowl last year, which will amount to a $25 million EBITDA headwind, Billings said. Excluding Super Bowl weekend, key metrics are up over 2024.
“Looking further out, we already have our budgeted group and convention business room nights on the books for 2025 and healthy (room rates). Transient booking demand over the last two weeks has been extremely robust,” Billings said. “With strong demand drivers, the set up for 2025 looks good.”
Billings said there will be new food and beverage openings later in 2025 in Las Vegas and even with renovations of the Encore Tower and other modest targeted investments, Wynn will exit 2025 stronger, with limited capital expenditures on the horizon.
Encore Boston Harbor generated about $60 million in EBITDAR in the fourth quarter and Billings said they were encouraged by slot handle being up 6%, a new all-time record for slot revenue. That offset some of the union payroll increases.
Demand in January has been strong in Boston, with growth in slot handle and stable non-gaming revenue against a difficult comparison.
As for Macau’s $293 million in EBITDAR in the fourth quarter, it was down about 1% year-over-year and up 11% from the third quarter. January saw healthy mass table drop, strong direct VIP turnover, and full occupancy in the hotels, Billings said.
