Tuesday, September 05, 2006

Wynn Hotels: Owner Believes the Company's Future is in Asia

Yesterday hotelier Stephen Wynn opened his second Wynn Casino in Macau China, reinforcing investors, developers and tourists’ beliefs that Macau will soon oust Vegas as the entertainment and gaming capital of the world.

Since the early seventies Wynn, has been on the forefront of Las Vegas development, transforming it from a city plagued by prostitution, drugs and gaming into a glamorous city of lights and excessiveness. Wynn initially began his career in hotels as an investor in the Golden Nugget; he then revamped it into a destination among the most popular in the mid-seventies to late eighties. He lost ownership in the Golden Nugget through a deal with MGM Mirage and then financed the Bellagio with a highly controversial method in finance, junk bonds. Now the Bellagio is a landmark in Las Vegas, setting the new standard in a city that drew 38.5 million tourists and 6 billion in revenue last year.

Wynn quickly realized the potential for the Wynn Macau after a casino monopoly was relinquished from Stanly Ho. The Chinese government wanted the strip of Macau to become more "Vegas-esque" as opposed to the drugs, prostitution and violence that have plagued the streets of Macau in the past. Sheldon Adelson, Wynn's number one competitor in Las Vegas has recently opened, Sands Macau to unparalleled success, recovering his initial investment in one. This success has opened Wynn's eyes to the emerging market in Macau. With China’s economy growing exponentially, many are looking at Macau as a place where entertainment is a viable market. At the opening of the Wynn Macau, Wynn stated that he believed the future of his Wynn hotels existed primarily in Asia and the “The speed of development is dizzying. The population it seeks to serve is expanding.” With Stanley Ho now in the backseat, Wynn is attempting to capture a large market share before the market becomes too saturated. Wynn also gave an insight into the potential of conducting business in Asia and said the Wynn Resorts would become a Chinese company in the next eight to nine years and is already employing one third of the company’s employees in China.

When asked about their competitve advantage over Sheldon Adelson, Wynn simply stated that the Wynn looks to set itself apart not on sheer size but the quality of the resort, “We never wanted to be the biggest we only enjoy being the best.”

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