Wynn Resorts $2 Billion Crystal Pavilion Macau Expansion Will Include High-End Museum, Theater

Posted on: July 11, 2019, 11:28h. 

Last updated on: July 11, 2019, 11:39h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Wynn Resorts, Ltd. (NASDAQ: WYNN) will expand in Macau, the market that accounts for the bulk of the company’s revenue, with eyes on adding the planned $2 billion Crystal Pavilion near the famed Wynn Palace there.

Wynn Palace Macau, future home of the Crystal Pavilion. (Image: Bloomberg)

In a presentation to analysts and investors made on Wednesday, obtained by Casino.org, Wynn outlined details for Crystal Pavilion, saying the venue will become a “must see” tourist destination. The company is expected to start construction on the project in 2021 with an opening date targeted for 2024. Las Vegas-based Wynn is forecasting as much as a 20 percent return on investment, reports Bloomberg.

Crystal Pavilion features an innovative architectural design with an all-glass structure; two phased hotel towers with a total of (approximately) 1,300 rooms and suite and one-of-a-kind public entertainment attractions,” according to the Wynn presentation.

Wynn Palace opened nearly three years ago as the company’s second Macau casino. The property has 1,706 rooms and this year, three of its restaurants earned five-star ratings.

High-End Amenities

The Crystal Pavilion is expected to feature “glittering glass and steel structure, a feat of innovative design and engineering inspired by the shape and beauty of a water lily,” according to Wynn.

Decorated New York architect Robert A.M. Stern will work on the project in conjunction with Wynn’s design and development team.

The investor presentation also indicates Crystal Pavilion will feature an immersive theater, a museum overlooking lush gardens and, potentially, an art museum run in partnership with another firm.

Phase I of the Crystal Pavilion effort will be set on 7.4 acres and account for 650 the expected guest rooms on the property. The next phase will be on 4.1 acres and will add the remaining 650 rooms.

The slide deck with details about Crystal Pavilion does not mention gaming space on the property and that could be by design. Chinese regulators and some international monetary agencies are pressing Macau operators to bring more non-gaming attractions and venues to the peninsula in an effort to diversify the local economy.

With the license for Wynn Macau, the company’s original property there, coming up for renewal in 2022, Wynn can potentially leverage Crystal Pavilion to confirm its commitment to Macau while showing the Chinese government the operator wants to contribute to the region’s non-gaming economy.

Wynn Macau and Wynn Palace have combined gaming square footage of 696,000, perhaps indicating Crystal Pavilion doesn’t need to add to that mix.

Mass Market

Analysts often view Wynn’s Macau properties as dependent on high-rollers to drive revenue and profits, but the company says it’s working to reduce its reliance on VIPs. Last year, mass market and non-gaming sales accounted for 71 percent of Wynn’s earnings before interest, taxes, depreciation, and amortization (EBITDA) on Macau, up from, 64 percent in 2017, according to company data. Wynn added that adjusted per room EBITDA on the peninsula jumped 20 percent from 2016 through last year.

For the trailing 12 months ending March 2019, Wynn said mass market gross gaming revenue (GGR) in soared 18 percent while VIP GGR increased just 1.4 percent.