The casino revenues at Encore Boston Harbor eclipsed casino operations at Wynn Resorts’ Las Vegas operations by more than 10 million according to third quarter numbers released for the company last week – followed by a conference call that gave the first specific details about the Encore operations in Everett since its June opening.
At the same time, the hotel performed sluggishly and food and beverage was also slow – particularly compared to properties in Las Vegas and China.
Wynn CEO Matt Maddox said he was actually encouraged by the Boston numbers and the efforts out of the gate, and that seemed to be true of financial analysist on the conference call as well due to the fact that they were more interested in operations in China than they were the new Boston property.
“Our table games business in Boston and our hotel rooms business in Boston has been quite encouraging,” said Maddox. “We always knew slots would take time to ramp. If you think about it, when we opened our doors in our local (loyalty) database we had zero customers. Fast forward 136 days and we have 250,000 people in our database, which is akin to growth. In order to compete in a high-frequency market where people are coming several times a month, a robust database is necessary because you need to message to the customers what you’re doing each week and why they need to come to the property. We are on the path to growth there and I think we have the right team in place.”
The casino revenues for the third quarter, which ended on Sept. 30, showed $114.9 million for the property. That was in contrast $87 million in casino revenues at the Las Vegas operations, which was a 6.3 percent decrease from last year at this time.
The total drop (money and markers deposited into the playing table cash box) on table games was $379.6 million, with a win percentage of 19.7 percent – which Maddox said was well-within the predicted range. In Las Vegas, that table drop number was $430 million, with a win percentage there of 19.9 million.
Slot machines were slow for Encore, something Maddox alluded to in the call. The total handle for slots in the quarter was $892.7 million, with a win amount of $62.4 million. In Vegas, the handle was lower at $883.9 million, but that was an increase of 9.1 percent over last year at this time.
That said, the real weak point for Encore was the hotel operations and the food and beverage – which Maddox and others said are still being tweaked as they open.
The total non-casino revenues at Encore were only $60.9 million, as compared to $312.5 million in Las Vegas.
The Everett property’s hotel occupancy rate was at 69.6 percent, meaning that on average 30 percent of the hotel was empty. Meanwhile the average daily rate was $465, below the $535 prediction. The total room revenues were $18.2 million, whereas Las Vegas has room revenues of $116.1 million with an occupancy rate of 88 percent.
Food and beverage at Encore restaurants was $29 million over the quarter, with Las Vegas at $149.7 million.
Despite that, Maddox was very optimistic about some of the tweaks that they planned for Encore to draw more local people into the property, as well as marketing it more to their international customers. Many of the financial analysts on the call were equally impressed, as well, with the loyalty card database buildup in the quarter.
“If you think about Boston, we are at the beginning of the ramp, not the end,” said Maddox. “So each quarter we are going to be tweaking our marketing and focusing on growing our database, working on controlling expenses, and growing revenues…each quarter. I am very excited about the transition we’ve gone through and the direction we are going into 2020…We’re at 136 days in Boston and we are learning each and every day how to become more local. We’ve been tweaking our food and beverage product to make sure we are giving he customers what they want. We’ve been working on our messaging and we have new messaging out in the market.”
Maddox revealed that the company – for the first time in its North American history – will launch a loyalty card tiered program at Encore early next year. He said that kind of program is essential in a regional market, and will drive growth.