There has been a lot of talk surrounding the gambling downturn in Macau, an area of China that is one of the most densely populated areas in the world. It was a booming business just a few years ago, but the Chinese government has made swift changes to the laws and has cracked down on the industry. Many companies have seen declines in profit – including the Wynn Resorts – but that’s not going to stop them from opening their newest destination. The Wynn Palace is finally opening up in Macau.
The cost totaled over $4 billion in money and more than six years in time. Regardless, CEO Steve Wynn has shunned the critics and is counting on the Palace to help turn things around. If the market does recover, as he expects, his company will see some huge returns. Of course, things could also go the other way and the pain will hurt twice as much.
It’s hard to ignore that Macau is still the largest casino market on the planet, largely due to how populated the area is. The Palace will be able to service a significant amount of traffic, with over 1,700 rooms. It is being classified as a megaresort and is planning to aim at high rollers, those that have a lot of money and are looking to spend it on the tables. For whatever reason, those high rollers have not been hit as hard by the gambling crackdown as everyone else. Wynn is merely hoping that the casino can break even in the first few years. That might be a stretch, though.
The Palace will also be trying to attract those that aren’t into gaming – kind of following the Las Vegas model – as it has an artwork collection featuring a number of paintings that are valued at over $125 million. There will also be a rooftop garden that gives visitors a view of the South China Sea, along with a performance show by fountains and gondolas that are air-conditioned. There will also be a vast selection of high-fashion shopping for visitors, who can buy items from the likes of Gucci, Cartier, Hermes and Prada, among many others.
Not everyone is happy with the opening of the Wynn Palace, of course. There are a few other resorts opening in Macau, which means more competition for everyone. At a time when the revenues are already depressed, the battle for business is even more heated. The Las Vegas Sands, which is Wynn’s main rival, is opening the Parisian Macao in September. As for the other big player in the game, MGM Resorts International, they’ll be looking to open MGM China in 2017. There are some that are worried that the supply will beat out the demand, which would be a problem for everyone involved. However, Wynn has high hopes for his Palace and he has been hugely successful for the most part over his career.
You can expect a lot of investors to be fixed on Macau and they probably have been since the Palace opened on August 22nd.