Wynn Resorts Losing up to $2.6 Million a Day Due to Coronavirus Shutdown

Wynn Palace Macau at NightThe coronavirus, which has currently infected more than 31,000 people and caused 636 deaths in China, has caused Chinese Officials to shut down all casino operations in Macau, including Wynn Resorts.

Wynn resorts is a major operator of high-end hotels and casinos between Las Vegas and China, with three of their properties on the Cotai Strip in Macau: Wynn Macau, Encore at Wynn Macau, and Wynn Palace. Their two Las Vegas properties are Wynn Las Vegas and Encore Las Vegas.

The three Wynn properties were among 40 other casino properties that were forced to close their doors in the coronavirus shut down. Closing up shop on their luxury properties, during a high time of year for business, is a contributing factor to the $2.4-$2.6 million in loses being accumulated per day.

According to Wynn Resorts CEO Matt Maddox, the big brunt of the revenue loss is connected to payroll, as the casinos employ around 12,200 workers in Macau. While the amount of revenue being lost daily is extremely high, it’s not causing frantic concern on the company’s end, with Maddox stressing the health and safety of their employees above all else.

“I’d like to commend the government of Macau and China for the decisive action they continue to take to contain the coronavirus,” Maddox said in a discussion regarding the company’s earnings call. “We’re in daily conversations with the government, and they’ve been terrific partners.”

Maddox also maintains that Wynn executives are confident that the company can bear the brunt of its current loses, and has a windfall of backburner funds available to weather its current financial storm. While Maddox is unsure when operations will resume to their normal activity, he believes things will go back to normal despite the current scare.

“We have a ton of liquidity,” said chief financial officer Craig Billings. “We have a couple billion dollars of availability between cash and revolver in Macau. That’s more than sufficient to last for, really, any period of closure.”

About Wynn Resorts Macau

The Wynn Resorts properties in Macau are among the most important in their market, as they make up a bulk of the company’s revenue. Wynn Macau first opened on the Cotai Strip on September 6, 2006. Its second toward, Encore at Wynne Macau, opened on April 21, 2010. The last Wynn property, Wynn Palace, opened August 22, 2016.

Currently, the Wynn properties in Macau rely heavily on their high-rollers and VIP gaming to drive revenue and profits. Reports found that Wynn Resorts earns nearly 40% of its casino revenues from VIP gaming. However, the company is planning out ways to remove the dependency on VIPs to gain high profitability.

Other Major Companies/Product Categories That Could Take A Big Hit

China is the world’s biggest player when it comes to mass product production. According to financial analysts, the coronavirus outbreak could negatively impact the global economy, with more risk posed to hurt certain industries more than others.

The 5 companies and product categories that could experience economic fallout the most from the virus outbreak are Apple, the entire beauty category, liquor companies, luxury clothing retailers (particularly Burberry, who has 64 stores in mainland China that have been temporarily shut down), and the Walt Disney Company. Disney has two major theme parks in Shanghai and Hong Kong. A two-month closure of the parks could result in a $175 million loss in revenue.