Two Way Hard Three | Las Vegas Casino & Design Blog

This morning Wynn Resorts pre-announced 2nd quarter results for their operating subsidiary that runs the Wynn Las Vegas / Encore resort complex on the Las Vegas Strip. These results do not include Macau operations.

The complete news release is here:

The results clearly show that Las Vegas is struggling. Wynncore is arguably the very top of the market and compared to a year ago, they are taking a bigger loss. That said, occupancy and ADR don't look as horrible as they could have been. Despite increased occupancy, REVPAR was down.

I'm sure the folks at Wynn are looking down the road at CityCenter without a distinct lack of kind words - adding thousands of rooms into the market has only served to depress rates further (we're still waiting for an increase in supply to raise room rates, as some analysts have suggested would be the case when more rooms come online later this year).

The news release also mentions increased health care costs. Can't wait to hear another episode of the Steve Wynn vs. Obama Show on their next conference call.


Read archived comments (17 so far)
July 21, 2010 10:05 AM Posted by John

I think it's interesting that Stevesie said some time ago that CityCenter and ARIA were marketing themselves to a different customer base. That his organization would just come in and slice off the high-end. Now that they're actually COMPETING for the same customers, they throw a bitch-fit when they have to lower their rates and acknowledge that they're not invulnerable.

I love Wynn and Encore, but I think it's just hilarious that they're just now getting that. Talk about a punch in the dick.

July 21, 2010 11:42 AM Posted by parchedearth

How does the EBC construction cost, Wynn room rennovations, new wine bar and DB replacement fit into these numbers? Also, he fired a number of workers so that he could give everyone else full-time status. Did this impact health care costs and was there any severance?

While Aria increased room supply, I think Palazzo is the true competition to Wynn.

July 21, 2010 12:10 PM Posted by Hunter

I think we'll have to wait until the 29th and the final results to get answers to those sorts of questions.

July 21, 2010 4:15 PM Posted by John

I'd say that every hotel is competing on the same field right now. When visitors to Vegas can get a Five-Star room at $110 a night, you can't say that one hotel directly competes with another.

July 21, 2010 7:28 PM Posted by mike_ch

These days I see the upper market as Wynn/Encore vs Bellagio/Vdara, and Venetian/Palazzo vs Aria/Mandarin.

I don't think Aria is making a dent in Wynn's occupancy, but Mandarin is definitely choking how much he can get away with charging and is pulling his high limit play away.

I know that if I was rolling to Vegas with big money, and barring any by-invitation-only rooms at Wynn or Bellagio, I would staying at Mandarin and walk to Aria over the aging Wynn or the noisy matingcall enhancements at Encore.

July 21, 2010 8:22 PM Posted by Pikes

mike_ch, Where did you get your info that Mandarin is "Pulling his high limit play away" ? Do you have a link?

July 22, 2010 11:05 PM Posted by Jeff Sommers

"Palazzo is the true competition to Wynn"...??? When you make a statement like that are you talking about Palazzo's plastic tree's & shrubs throughout the casino floor, the warehouse atmosphere & hollow floor that moves when you walk. The fact that nothing worth mentioning has been done to the resort since opening, forget your Golf clubs here... you won't need 'em. I really love grabbing a taxi in the basement of the parking ramp, it's super classy!! The restaurants include Mexican, a glorified Cheesecake Factory & a Steak House that nobody remembers. There's a reason Sheldon Adelson didn't put his last name outside on the resort!! Palazzo is middle of the road, it's just no match for Wynn.

July 23, 2010 1:39 PM Posted by parchedearth

As a follw-up, I'm not claiming Venelazzo is equal to Wynncore; only that it creates the most pricing pressure. When looking for a luxury resort property, I contend the majority of people check the Venelazzo rates second (after Wynn - and then followed by Bellagio, Mirage, MB, etc...). Aria is positioned as more of a hi-end business/convention property than a luxury resort. While Aria does compete with Venelazzo for convention business, it does not compete with Wynncore (which targets smaller, more exclusive conventions).

July 23, 2010 4:44 PM Posted by mike_ch

Pikes: That was just opinion, I guess I should have used two "I think"s.

July 23, 2010 4:45 PM Posted by mike_ch

Jeff Sommers: Wynn has plastic grass, you know. He claims it's eco-friendly.

The same people who praise Wynn for that often snap Sands for plastic plants. I don't get it.

July 23, 2010 4:52 PM Posted by mike_ch

Also, I'd mention that Carnevino is not "a steak house nobody remembers." I know that Curtas loves the joint, they have steaks dry-aged longer than anywhere else in the country, as far as anyone knows. It takes a pretty good chef to cook them, since they fall apart so easily.

And what's wrong with Mexican? I said some time ago that I'd like to see Wynn hire a chef who can do with that cuisine better than the rest of the stuff on the road.

July 24, 2010 1:32 AM Posted by Jeff Sommers

Follow up comments: The plastic plants at Palazzo are "inside" the casino area, Wynncore's are as real as it gets (and over the top)... Mexican food is amazing, I was merely comparing the restaurant selection between the two resorts... and your right, Wynn should do a ultra hip Encore version of Pink Taco over by EBC. I am truely disappointed with Palazzo! Sheldon Adelson had his chance to show the world what he was made of when he started the Palazzo project, and in my opinion... it's so-so.

July 24, 2010 10:54 AM Posted by Mike P.

Actually 2 out of Curtas' top 3 Vegas steak houses are at Palazzo, and I'd take either CUT or Carnevino over anything at Wynn/Encore.

David Burke's Primehouse in Chicago has a 75 day dry aged ribeye on their menu, and I think I've been offered one that had been growing mold for 90 days or longer once. If you want a seriously dry aged steak in Vegas Carnevino is the place to go.

Venetian & Palazzo compete with Wynn & Encore for a slice of the continuing medical education business, at least in my wife's specialty. She has yet to see a single course offered at Aria.

July 26, 2010 4:01 PM Posted by DLO

I'm a fan of Palazzo, but the restaurants at Wynn and Encore blow Palazzo and Venetian's away; with the exception of LAVO which is great! SW Steakhouse is the best restaurant in Vegas; it's always overflowing while Carnevino is half full and overcharging.

August 1, 2010 7:45 PM Posted by motoman

Yes, Mike P., you've expressed here your disdain for all things Wynncore on numerous occasions.... ;-)

I've long contended that with the no-man's land that now extends from north of Fashion Show Mall across the street from Wynn (former Frontier) up to Slots-o-Fun (former Westwood Ho!), that many tourists walking from the center and south Strip get as far as Venelazzo, then tucker out in that massive Palazzo mall, decide they've seen enough of "fancy" casinos, and head back before crossing the Sands Avenue bridge, given that there's nothing resort-wise north of Encore until you get to Riviera and Circus Circus.

That's the only explanation I can fathom that would put Palazzo above Wynn, Bellagio and Encore (in that order) on "Travel & Leisure" magazine's Top Hotels survey. Note that it is a self-reported reader survey poll, not a poll of travel reviewers -- more visitors equals more votes.

August 2, 2010 8:54 AM Posted by Mike P.

So, bashing all things Adelson is just fine then? OK, I get it.

Just to review the relevant comments in this slow moving thread, somebody made a dismissive remark about an unnamed steak house at Palazzo several comments back. Mike_ch replied that Carnevino was a favorite of John Curtas, and I added that CUT also ranked high on his top 10 list.

Now I don't necessarily take Curtas' word as gospel, especially about steak houses since he professes not to be a big fan of the genre, but I've eaten at Carnevino a few times and CUT many times and basically agree with him about both although I prefer CUT.

What Carnevino has that nobody else on the strip offers is a strip steak that's been dry aged for a really long time, like several months or longer. That is not something that's going to appeal to everyone. Most people eating a lengthily dry aged steak for the first time are going to think it's "off", and that's not far from the truth since it's been in a locker growing mold for months.

Personally I wouldn't recommend Carnevino to anyone who's not looking for a seriously dry aged steak or doesn't know what they're in for if they order one. The rest of their menu isn't that memorable, and Batali & Bastianich seem to like vintage rock played at excessive levels in all their restaurants.

I wasn't particularly bashing Wynn in that comment except as a reply to the claim that there's nothing worthwhile in comparison at Palazzo. But yeah, if I want a really expensive steak dinner I don't see a reason to go north of Palazzo.

I'm also rooting for all of the strip's entrepreneurs to succeed, including Wynn, Adelson and Ruffin. I think Steve has correctly deduced that American boomers are retrenching and aren't going to be coming back, so he's trying to appeal to a younger crowd. Probably a wise business decision.

August 6, 2010 2:44 AM Posted by motoman

No, my remark was not intended as a swipe at LVS, Adelson, Palazzo, or to be Wynn cheerleading. I was merely attempting to make sense of a survey that would place teeny, tiny "The Nines" in downtown Portland, Oregon, smack in the middle of the top 50 hotels in the US and Canada -- above a whole stack of Ritz-Carltons, Four Seasons, Mandarin Orientals and St. Regis.

Yet, that same survey includes four Vegas megaresorts (which as has been discussed here is generous for a multi-thousand room complex) while excluding Vegas' own Four Seasons and Skylofts, not to mention the Venetian itself. Yeah, professional travel reviewers might've made the distinction between Skylofts and "the rest of MGM" while a bunch of magazine readers would not; and when CityCenter's Mandarin Oriental opened in prominent view of the Strip, comments here mentioned that Four Seasons atop Mandalay Bay was perhaps a too-well-hidden secret. I would expect Vegas' Mandarin and Cosmopolitan to eventually make this list.

But to stay on subject, which was WYNN's financials, I'll stand by the premise that the loss of the contiguous resort corridor south from CircusCircus (or more important, the failure to complete other megaprojects north of Wynncore) has meant a loss of potential foot traffic into, most especially, Encore, which then rendered that beautiful atrium less important as an entrance and allowed for its repurposing into an STD incubator/pool complex. I agree completely with Mike P's last post re boomers & a younger crowd. For better or worse....

And that footbridge over Sands Avenue is more of a one-way path than might be apparent*. I'll admit it was a bit confusing at first, and daunting late at night; folks with a bit of apprehension about Wynncore in the first place might not go the extra distance, or would find it a deterrent to going back for a repeat visit. Given, as mentioned, that there's not much to recommend north of there within walking distance.

*(Going south, you immediately enter Palazzo's mall. Going north, you must go down to street level, around the base of the escalator, to a path into Wynn's Esplanade; or beyond to the sidewalk and another footbridge to Fashion Show Mall; or beyond *that* to more sidewalk and eventually Wynn's off-street main entrance. Or, off the escalator, to the corner of Sands and LVB where there used to be a crosswalk to the mall [you can still see the yellow ADA wheelchair-friendly curb ramp on the other side of the fence] and then around the corner to more sidewalk.)

So, we all friends now? ;-)