Casino analyst, Wynn execs surprised by earnings drop, wonder if post-pandemic boom over
By JOSH RESNEK
A slight downturn in June earnings at Encore Boston Harbor has casino analysts and Encore executives wondering what exactly happened.
June figures came in almost $400,000 less than May’s figures, which were up dramatically over April’s.
Business had seemed robust for most of May and into June, with huge gains in income.
June’s final figures showed Encore generating $52.5 million in table games and slot machine revenues.
This was down from May’s $52.9 according to a release of the figures by the Massachusetts Gaming Commission on July 15.
By contrast, MGM Springfield’s earnings tumbled by $1 million from May to June.
MGM Springfield’s earnings went from $21.2 in May to $20.2 in June.
Plainridge Park Casino also dropped $1.1 million from May to June, reporting figures of $12.4 million in May and $11.3 million in June.
Plainridge is a slots-only facility.
June revealed a slowing down of the great earnings gains made in April and in May as the post-pandemic rules and regulations were eased at all three facilities by the MGC.
That initial boost referred to as pent-up consumer energy for gaming being expended was expected to continue into June and July.
They trailed off instead, leading some analysts to believe that reaching pre-pandemic period figures in April, May and June have been achieved and not much else by the way of big gains are believed to be on the horizon for the rest of the summer.
The Encore Hotel remained a drag on earnings with room rentals struggling.
During several weeks in June, executives kept the hotel open for seven days.
“It didn’t work out,” a hotel employee told the Leader Herald.
The company returned to opening the hotel five days a week.
Room prices have risen during the past four months.
Room rentals are averaging about $500 a night for those who choose to stay overnight in the Everett facility.
Vacancies far exceed rentals at the hotel in the still spotty Massachusetts tourist and travel sector and especially in Boston.
It is the same situation in Boston’s major hotels.
“Weekends have been booming. The rest of the week is a bust,” said the Encore employee.
Air traffic coming into Logan Airport has gained dramatically during the past three months but still remains substantially below pre-pandemic figures.
Boston is busy during the weekends and crowded with tourists and those venturing outside. During the week, the streets of Boston are quiet.
Many major businesses in the downtown have yet to bring back their employees to the city’s major downtown towers.
Such is life in the drastically changed post-pandemic period.
Casino stocks, and especially Wynn Resorts have dropped during the past two weeks after vacillating without major gains or losses.
The national economy is booming but questions have arisen about the power of the boom and how long the gains will continue to register.
In the casino world, analysts all confirm that the next three to five years will be powerful growth periods for Wynn.
However, caution has been sounded because of flat earnings and a slower than expected return to normal in Macau, where 75% of Wynn’s income is derived.
Another question mark is how much new added revenue will be generated by
venues everywhere – but the effects of the virus linger.
It is impossible to put out of our minds the lost year, and now, the virus trying a comeback.
Inequity remains among the Everett population.
In recent days we have seen a return of lines at COVID testing and vaccination locations in the city.
Food insecurity has not disappeared. Long lines still form at the city’s main free food distribution centers. The lines this week at the Connolly Center stretched for a long way down
Chelsea Street. This is not to mention the dozens of Everett families still grieving because they lost loved ones to the virus.
The days of maximum Wynn Resorts entrance and dominance in new sports betting Internet venues that are expected to earn the company billions in the next few years.
Wynn Resorts stock has a 52 week range of $67 to $143.00 a share.
As of Monday, this week, the stock was trading at $104.00 a share.