Two things distinguish Wynn Resorts’ new projects for Cotai: they are clearly non-gaming and should only start after the operator knows he will continue to operate in Macau.
MB March 2020 Special Report | Cotai 3.0 (2019-2022)
Wynn promises to continue to surprise Macau and its customers with the new Crystal Pavillion project.
The idea is to reinforce the non-gaming bet and at the same time increase the offer of rooms available at Cotai’s Palace, since CEO Matt Maddox confessed the company is refusing would-be guests at the Wynn Palace because it lacks the necessary room capacity (1706 rooms now).
The $2 billion (MOP16.1 billion) Crystal Palace, which will be adjacent to Wynn Palace, will feature 1,300 new rooms and suites in two phased hotel towers, as well as more dining options, an art museum run in partnership with another firm, and a “270-degree, fully immersive entertainment theatre.”
Last year, in a presentation to analysts and investors, Wynn projected this venue would become a “must see” tourist destination, with an “innovative architectural design with a glittering all-glass structure.” Other details given by Wynn about its Crystal Palace include the following: it will feature a “steel structure, a feat of innovative design and engineering inspired by the shape and beauty of a water lily (Robert A.M. Stern will be the architect).” Allan Zeman, Non-Executive Chairman, reinforced this statement: “We expect the Crystal Pavilion will become a unique world-class cultural destination.”
Phase I of the Crystal Pavilion will be set on 7.4 acres of the south parcel and can start in late 2021; it would take over 36 months. The details of the work on the north parcel (phase 2) hotel tower are still open. Completion is expected in 2024. It seems to be a confusing timetable for the end of concessions and the possibility of a new tender in 2021. But brokerage Union Gaming Securities sees few risks: “Meaningful capital spending wouldn’t begin until 2022, so we see little risk that the company will invest prior to clarity on the renewal.”
Last November, Zeman indicated that the project was in the preliminary planning and design stages.
The targeted adjusted property EBITDA return on investment is about 15 to 20 per cent, while Wynn expected about 7 to 10 million visitors for the Crystal Pavilion annually. Brokerage Sanford C. Bernstein said the following about this expansion: “[it could be a] long-term growth driver for Wynn,” but in the near-term, the “impact would be limited.”
But Wynn Macau’s efforts are not just about Cotai.
For several months now, the company has been moving its property on the Peninsula, and “Wynn is the only operator making material investments in Macau’s Peninsula district,” says the company.
According to Wynn’s information, the initial work at the West Casino would have been completed by the end of last year, boasting 44 mass market gaming tables and a refurbished high-limit slot area. Also, before the end of 2019, there was to be the renovation of the 410 rooms at Encore Tower. So far, there is no news that the work has been completed.
There is other work that will continue during these next months, with two newrestaurants and 7,000 square feet of retail space.
According to the company, the total project cost for the West Casino and the Encore Tower upgrade is expected to come in at around US$133.0 million (around MOP1 billion).