Wynn facing a different challenge
Hotel rates along the Strip have been slashed to levels not seen since the 1980s just to get customers into the buildings. But that’s just one step. Getting those customers to spend money is another issue.
That sums up Wall Street’s current attitude toward the Strip.
After Wynn Resorts reported a nearly $160 million net loss in the fourth quarter Tuesday, analysts said they weren’t shocked by the numbers.
Robert LaFleur follows the gaming industry for Susquehanna Financial Group. Last month he dubbed the Strip “the new Skid Row.”
Wynn, LaFleur said, has a much more complex challenge in filling its high-end rooms at the Wynn Las Vegas and Encore.
Mid-market and low-end properties can drop prices and fill rooms with gamblers.
But Wynn doesn’t just need gamblers. The company’s casinos need customers who will eat, drink and shop at Wynn’s high-end restaurants and other outlets.
“A low-end penny slot player who eats take-out does not really help,” LaFleur said. “As challenging as Las Vegas might be, Wynn has the most precious assets of all these days — a strong balance sheet and a fully funded pipeline. We clearly expect Wynn to be one of the survivors of this mess; it just is not going to be pretty in the interim.”