LAS VEGAS (KLAS) — Wynn Resorts told investors Thursday they have set aside money to pay higher wages that could come with a new Culinary Union contract, but there were no revelations on when that deal would come.
The Culinary Union said negotiations are continuing this evening with Wynn and Encore. The two properties employ about 5,000 hospitality workers. The union set a deadline of 5 a.m. Friday for a contract — the last deal waiting to be approved with Las Vegas Strip resorts.
Caesars Entertainment announced a tentative agreement on Wednesday morning, followed by a Thursday announcement from MGM Resorts International. Wynn is expected to be the next domino to fall as the biggest operators on the Las Vegas Strip sign deals that would prevent a strike before the highly anticipated F1 Las Vegas Grand Prix on Nov. 16-18.
But Wynn Resorts didn’t volunteer new information during the third-quarter earnings call, and investors were already turning the page to questions about the company’s success at its Macau properties.
F1’s appeal to Wynn’s clientele also brought a lot of discussion. Wynn Las Vegas bills itself as a luxury brand — a natural match for the big-money international crowd that flocks to F1 races across the world.
“Our expectations for F1 haven’t changed one bit because as you rightly pointed out, we knew that it was our customer base that would be at that event from the beginning,” CEO Craig Billings said. The hotel is sold out for the three days of F1 events.
“We barely even put any rooms on public sale,” he said. Those rooms were priced at an average $2,533 a night over the three days.
Chief Operating Officer Brian Gullbrants said Wynn “should exceed our all-time hotel revenue record by 50% for the three-day period.” He added that gaming revenue should be some of the best ever seen.
“We have more front money in credit lined up for this event than any event we’ve had in the history of Wynn Las Vegas. And we’ve had some doozies before,” Billings said.
Billings noted a record third quarter for the company’s Wynn and Encore operations in Las Vegas. Casinos have seen big profits at the baccarat tables recently, but other operations are also profiting.
“Wynn Las Vegas delivered $220 million of adjusted property EBITDAR (earnings), up 12% on an incredibly difficult year-over-year comp. Yes, it was aided by high hold, but it was also despite the fact that we accrued during the quarter for the estimated increases associated with the new agreement with the Culinary Union,” Billings said.
“I’ve got to tell you, activity at the property was frenetic during the quarter, with hotel occupancy, restaurant covers, casino visitation, table drop and slot handle all up over what was a very strong third quarter of 2022,” he said.
The company reported a $10 million hit on operating expenses in Las Vegas as they set aside money for the Culinary deal. But that total also included money for cost-of-living raises for non-union employees, as well as costs associated with relaunching the “Awakening” show.
As Wynn carves out an even bigger share of the Las Vegas luxury market, investors remain eager for good news out of China, where things have improved significantly for Wynn over the past year. Business in Macau has returned to 85% of pre-pandemic levels, Billings said.
Billings said he expects licensing of Wynn’s UAE project — Wynn Al Marjan Island in the emirate of Ras Al Khaimah — to come soon.
Operating revenues were $1.67 billion for the third quarter of 2023, an increase of $782.2 million from $889.7 million for the third quarter of 2022. The company declared a cash dividend of $0.25 per share.