Wynn Resorts Ltd Earnings Call Nuggets: Competition in Macau
Competition in Macau
Joseph Greff – JPMorgan asked: In Macau, can you talk about the competitive dynamics there? You saw last night that one of your competitors had some initial success in what they consider their junket re-affiliation initiatives. Are you seeing either any direct or indirect competitive pressures from that?
Stephen A. Wynn – Chairman and CEO responded: Do we feel any competitive pressure in Macau? Oh my goodness, we sure do.
To the credit of our competitors, when we opened up in September 2006, we were sort of in the category of our own–physically speaking. We match that with a service level that I think was sort of new for the town and we were rewarded appropriately for those initiatives.
Our competitors, I think to a certain extent, got tired of always seeing our yields per foot and our yields per table as high as they are. They have paid more attention to what we do. We see their designers and their executives trooping through our hotels almost on a daily basis and to their credit, they have done some beautiful work.
The casino hotels, gaming spaces, the restaurants and the offerings that are being put forward by Galaxy, by The Sands, and by City of Dreams and SJM are really terrific. Everybody gets smarter there and everybody gets sharper. That makes us all work harder and we take that all into consideration. Of course I have a smile on my face.
We get to go last in Cotai and maybe we’ll have some new moves to show our friends. But in the meantime, they’re doing a damn good job; we feel it all the time.
We have to stay on our toes to hold our position.
Greff asked: You introduced the topic of the Cotai development. There was nothing in the earnings release and nothing out of the Macau market. How are you thinking now in terms of timing? Or, is it really status quo from where we were just a few months ago?
Wynn responded: We are working assiduously on the perfection of all of our drawings and specs which are part of the process of developing a new hotel. We don’t waste our time as the clock ticks down on the way the government approvals rollout.
Our best process is to just keep our chin down, pay attention to the things that we control and that are under our direct supervision. Of course as licensees or as concessionaires in Macau, we await governmental action when the government thinks it’s appropriate.
I guess what I am trying to say, nothing much has changed except we are working in Macau on the Cotai project. We are doing the kinds of things that are necessary for it to be completed in the future and a lot of that gets done in anticipation of government taking its final action.
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