Later this year sees the opening of the latest extravagant project for Steve Wynn-Encore casino resort, a $2.3 billion resort that will include 2034 luxury suites. This opening comes at a time when other casinos are closing, or seeing a downturn in profits, as a knock on effect of the currently slow economy. More than ever before, Las Vegas is being affected by the recession, and even those tourists who do take care of the cut price hotel rooms designed to lure people in, are not gambling as much as they used to.
Wynn is hoping to avoid the same fate that other casinos are facing because the Encore casino resort is not aimed at the average casino visitor, and it seems that this may be working for him as other resorts his company owns aims for the same high-end market. Where as Trump Entertainment resorts is currently seeing an 83% fall in share prices and others are seeing a 70% drop, Wynn Resorts has fallen only 45% and the higher end the resort is, the better it is fairing.
Citigroup analysts estimated that first quarter room rates in low-end casinos fell 5-12% on the Strip, where as high end room rates fell just 4%. Currently the greatest financial hardship is not being felt at the highest end of resorts, and Wynn hopes that this will continue.
In fact his investors only fear is that the recession will finally hit the high end consumers. Unlike many of the other companies who are digging themselves deeper into debt by trying to big new resorts in new countries and markets, Wynn Resorts does not have a large amount of capital tied up in expensive new developments and hence has a low level of debt on it’s balance sheet.
When it comes down to it though, Wynn is in this for the long haul. His attitude toward the current poor economy is one of unconcern, because he says his casinos will be around for decades to come. So what does it matter if the opening of his latest resort is a little slow?