Casino Operator Losing Up To $2.6 Million Per Day From Coronavirus Shutdown
Wynn Resorts, which operates high-end hotels and casinos around the world, said in its latest earnings call that it was losing as much as $2.6 million per day from closures in Macau due to the coronavirus.
The company’s business in China has taken a big hit from the fast-spreading coronavirus—which has now infected more than 31,000 people and killed 636, as Chinese officials in Macau recently asked all casino operators to shutter operations.
In addition to 40 other casino properties in Macau, Wynn Macau and Wynn Palace temporarily closed at midnight on Wednesday, though a smattering of hotel rooms and restaurants are still open for the few remaining guests.
With its luxury casinos in Macau now closed during what is usually a busy time of year, Wynn Resorts is bearing the brunt of losses ranging from $2.4 million to $2.6 million per day, according to CEO Matt Maddox.
The expenses were mostly related to the payroll of its 12,200 employees who work in Macau—the company has over 31,000 employees in total.
The Wynn Resorts CEO also reiterated the company’s focus on the health and safety of its employees: “I’d like to commend the government of Macau and China for the decisive action they continue to take to contain the coronavirus,” Maddox said during the company’s earnings call. “We’re in daily conversations with the government, and they’ve been terrific partners.”
While $2.6 million per day seems like a big financial blow, Wynn executives are confident that the company can weather the losses: “I don’t want to predict when operations will be back to normal, but they will be,” Maddox said.
The news caused Wynn Resorts stock to fall nearly 4% on Friday. Shares are down just over 10% so far in 2020.
“Macau is set up for a really great rebound. Tourism is one of the first things that rebound with events like this because people want to get out and move around. We feel good about the long-term aspect of Macau once the virus is completely contained.”
How big of an impact the Macau closures could have on Wynn’s first-quarter earnings in 2020.Wynn Resorts’ executives are confident that the company is in good enough shape financially to withstand any losses from the coronavirus. “We have a ton of liquidity,” said chief financial officer Craig Billings. “We have a couple billion dollars of availability between cash and revolver in Macau. That’s more than sufficient to last for, really, any period of closure.”