COVID, lawsuit, shutdowns creating concern
By JOSH RESNEK
The Encore Boston Harbor Hotel and Casino is in terrible shape at the present.
The hotel remains closed.
The casino’s reduced hours have been cut income dramatically.
The restaurants, which had been doing well, have all been suffering from the newly imposed hours of operation cuts.
Running a casino with a closing time of 9:00 p.m. is like trying to own a Mcdonald’s with less than half the open time that is needed to cut a profit and to meet expenses.
In Las Vegas, the situation has grown so bad, Wynn Resorts has closed its casino and hotels during the mid-week for lack of visitors.
There have been no seminars or conventions since March. Those two are the lifeblood of the industry.
Without massive visitation from air travel, Las Vegas is empty.
Whatever gains had been accomplished welcoming visitors by automobile who drove in from California, estimated to have been about 25% of all bettors, have been quashed by strict restrictions and quarantines placed on travel between the states.
Also, a new round of restrictions has been placed on casino and hotel operations by the Nevada Gaming authorities.
In Macau, where Wynn Resorts takes in 75% of its cash revenues, travel and gaming numbers remain way down, at a level at least 77% less than at the same time last year.
Here in Everett, at least 4,000 employees or more have been permanently laid off by Encore.
This severely impacts the local economy.
With unemployment running out the day after Christmas, former employees are feeling a dreariness they could never have imagined when the casino and hotel first opened its doors for business in June 2019.
The casino’s right to exist here is being dramatically challenged by the COVID-19 pandemic.
But not all is lost.
Followers of the casino and hotel industry all point to pent up desire to come back to the betting tables and the hotels here and in Las Vegas and Macau is extraordinary. Millions are feeling locked in not being able to travel right now.
The experts believe firmly, and they are right, that the business will come back – and when it does – watch out.
The major question, the ultimate question: when will things return to normal or at least to a new normal that allows for a more unfettered style of doing business?
The next six months, the experts all agree, will not be very productive.
The owners of casinos and hotels will burn hundreds of millions in cash to stay alive and to maintain their investments without a return.
Given the pent-up demand theory, that when the virus is tamed and the vaccine is out, business will come back like a champion.
There is this about that to understand.
Wynn Resorts stock right now is at $100 a share.
Pent up demand is not allowing the price to go any higher as the figures just aren’t there to justify an upward trajectory.