The Wynn Resorts Fourth Quarter 2023 Earnings Call is being held, with the operator reminding participants that the call is being recorded and may include forward-looking statements. The Chief Financial Officer, Julie Cameron-Doe, introduces the other members of the Wynn team and highlights the company's achievements in 2023, including record quarterly and yearly property EBITDA. The company's business is more diversified than ever, with a strong presence in Las Vegas and a growing business in Macau.

The company has a growth opportunity in the UAE and their Las Vegas property had a strong quarter with record EBITDA. January 2024 was similar to January 2023, but February is expected to be the best in the company's history. The Boston property also had a stable quarter with a slight decrease in revenue, but strong EBITDAR due to disciplined operations. Recent winter storms have affected visitation, but underlying demand remains healthy.

The company has received environmental approval for a development across from Encore Boston Harbor and is progressing towards construction. In Macau, the company generated $297 million in EBITDA, and on a normalized basis, it would have been 94% of Q4 2019 levels. The business in Macau has continued to perform well in Q1, with strong top line performance and disciplined OpEx control. The company opened a major capital project in collaboration with Illuminarium in Q4, and construction is progressing on Wynn Al Marjan. In Las Vegas, the company generated $270.8 million in adjusted property EBITDA on $696.8 million of operating revenue, with an EBITDA margin of 38.9%, up 140 basis points year-on-year.

In Q4, the company saw a $10 million increase in EBITDA from higher-than-expected hold in novel table games. OpEx, excluding gaming tax, increased by 16% year-over-year, but was still lower than the 19% increase in revenue. In Boston, the company generated $64.4 million in adjusted EBITDA with a 29.7% margin, thanks to disciplined cost management. In Macau, adjusted EBITDA was $297 million, with higher-than-expected hold contributing $7 million. EBITDA margin increased by 140 basis points, driven by a mix shift to higher-margin mass gaming and cost efficiencies. OpEx, excluding gaming tax, decreased by 14% compared to Q4 2019. The company is currently working on its concession commitments in Macau.

The company's projects require government approvals and will result in CapEx ranging from $350 million to $500 million. The balance sheet shows strong liquidity with over $4.5 billion available. The company generated $2.2 billion in property EBITDA in 2023 and approved a cash dividend of $0.25 per share. They also repurchased shares and will consider increasing dividends as the recovery progresses. CapEx in the quarter was $113 million for various projects and maintenance. The call is now open for Q&A.

The speakers discuss the OpEx rate in Macau and how it has increased sequentially due to higher variable costs, payroll, and concession-related events. However, they also mention that the EBITDA margin at both properties is above Q4'19 levels and that they expect the pace of growth in market-wide GGR to be a key driver of margins in the future.

In the fourth quarter, there was a 117% increase in mass table GGR compared to the same period in 2019. The company does not differentiate between premium and base mass business like Las Vegas Sands does. When asked about the different tiers of mass table business, the company stated that all tiers have fully recovered and exceeded 2019 levels.

The speaker believes that the recovery of Wynn's properties in Macau and Las Vegas will be different and should be analyzed separately. Wynn Palace is performing well and efforts are being made to increase occupancy. Wynn Macau has also seen improvement, mainly due to targeted investments and the return of core mass customers. The speaker is proud of the team's performance. In Las Vegas, the speaker expects group room nights to be up in the second quarter of 2024. The outlook for group business is strong and 2024 is expected to be a record year for room nights.

The sales and revenue teams have been successful in managing the properties and group room nights. The rates for these nights are contracted on a multiyear basis and are related to CPI. Wynn Macau is expected to benefit the most from the recovery in visitation and spending, but all properties in the portfolio should see a boost. The addition of new amenities, such as Illuminarium, has increased the appeal of Palace as a destination.

The speaker discusses how the F1 event and upcoming Super Bowl will affect the properties in Las Vegas, with a disproportionate impact on the downtown property. They also mention the success of their own events and the positive impact of the sphere on room requests and high-quality occupancy.

The speaker discusses the company's growth opportunities, including their land bank in Las Vegas, ongoing projects in the UAE and New York, and potential expansion into other states and international jurisdictions. They also mention their selective approach to pursuing new opportunities and the importance of their in-house design and development group.

The speaker discusses the two types of capital, financial and land, and how the company is always evaluating the best use of both. They mention plans to use the land in Las Vegas and discuss the balance between reinvesting in Macau and paying dividends to shareholders. They also mention the importance of dividends in their overall capital return strategy.

Craig Billings, CEO of Wynn Resorts, was asked about the outlook for the company's Las Vegas events in February. He explained that last year, Chinese New Year fell in January, so this year's February events will set the tone for the quarter. While March may have some headwinds, forward booking indicators for February look strong. In terms of the competitive environment for premium mass players in Macau and Wynn Palace, Billings mentioned that with volumes strong and travel infrastructure improving, it could be a tailwind for the company going forward.

Wynn Palace has been well positioned since it opened and continues to evolve its amenities to attract premium mass customers. The competition for these customers is intense, but the company stays true to its identity and focuses on generating cash and EBITDA. The Super Bowl is expected to bring in strong results, with double the front money and credit compared to last year, but it is a more corporate event and the impact on gaming revenue is uncertain.

The speaker believes that the F1 event was successful and will continue to grow in the future. They also think that there is room for improvement and that the event will become more relevant for the city. They believe that the event will benefit the company and other operators in the city.

The speaker discusses their plans to program their venue and attract customers for the upcoming F1 event. They also mention the success of Macau's recovery and how they are focused on the long-term viability of the region. They believe that Macau's strong performance is a result of pent-up demand, proximity, and some stimulus efforts. Overall, they are confident in the future of Macau and are planning for the long-term.

The speaker discusses the strong retail sales in Macau and how they were slightly affected by China macro trends. They also mention that Macau has become a substitute for Hong Kong in terms of retail sales.

The speaker discusses the changing type of visitation in Macau, particularly on Cotai, and believes that this supports the idea that the future of Macau is bright. They mention that visitors may come for retail, gaming, or entertainment purposes, and that this is a natural evolution of the city. They also mention that their interactive business is undergoing a strategic review and they will provide updates in the future. The speaker thanks the participants for their interest and ends the call.

This summary was generated with AI and may contain some inaccuracies.