Encore still striving for Wynn standards to lure high-rollers
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Encore Boston Harbor
Wynn Resorts touted the opening of Encore Boston Harbor on a call with investors and analysts Tuesday afternoon, but the $2.6 billion Everett resort casino is still working up to "Wynn standards," according to the company, and will wait until fall before marketing to VIPs and high-rollers already in the company's database.
Operating revenue in the second quarter for Wynn Resorts was $1.66 billion, an increase of $52.9 million or 3.3 percent over the second quarter of 2018, the company said. Encore Boston Harbor opened in Everett on June 23, just as the second quarter was ending, so Wynn did not break out data for the property but instead included eight days of Everett operations in the "corporate and other" category of its second quarter financial report.
Wynn Resorts CEO Matt Maddox opened the call with investors and analysts by welcoming the roughy 5,000 new Wynn employees at Encore Boston Harbor and thanking them for a successful opening period.
"Thousands and thousands of visitors coming in and the property has not disappointed. The reviews have been terrific, people really appreciate the quality and our service levels are beginning to ramp to Wynn standards," he said.
Maddox said table games have been a bright spot at Encore Boston Harbor and that promotions around the casino's hotel and slot machines are in the works as the casino looks to establish a foothold in the region's gambling market.
We "believe that with our property's location, with our management team and with our product, that we will continue to ramp that property and take share in the Northeast," he said.
In the first eight days it was open, Encore Boston Harbor generated more than $2 million in revenue each day. Gamblers wagered more than $93.5 million on slot machines alone when the Everett casino first opened in late June and the Wynn Resorts operation counted $16.79 million in total revenue for the month of June. The Massachusetts Gaming Commission is expected to release revenue figures for July, Encore's first full month in operation, next Thursday.
Though Wynn executives often talked before its opening about Encore Boston Harbor as a new destination for high rollers who can fly into Boston and get to Everett quickly to gamble, Maddox said the company's strategy has been to hold off on marketing to those players until all the kinks are worked out at Wynn's newest property.
"We want to make sure that our service levels are at the Wynn standard, and that's not easy. The team is doing an amazing job getting there in really a very, very quick way. But we had always said give it at least 90 days before we start hitting our full database at Wynn Las Vegas, offering people offers there and directly marketing to our higher-end customers," he said Tuesday. "The idea is that would be sometime in the fall."
Meanwhile, Encore Boston Harbor is working to build up its own foundation of loyal customers, President Robert DeSalvio said on Tuesday's call.
"One of the things we're primarily focused on is database building. So right now, of course, we're trying to sign up as many new customers as possible," he said. "We are all over it working on it."
Maddox said Wynn Resorts has been planning for about a 12-month ramp up at Encore Boston Harbor, including finding the right promotions and incentives to get people into the casino's 671 hotel rooms and to maximize revenue from its 3,158 slot machines -- and to keep its customers away from regional competitors like MGM Springfield, Foxwoods and Mohegan Sun.
"What we're doing is we're making sure that we're not going to get into a promotional war with our competitors, who are quite nervous about Encore Boston Harbor," Maddox said. "So we're reacting to what our slot customers are telling us. We're looking and understanding what promotions work, how points translate to comp dollars and what prizes, what gifts, are working. It's guerrilla marketing out there. We're really focused on that and we have the right team to do it."
The Wynn Resorts CEO on Tuesday briefly mentioned the company's desire to eventually turn the area around Encore Boston Harbor into an entertainment district. Aside from the 27.5-acre site that the casino sits on, Wynn Resorts controls about 16.5 acres of land along Broadway in Everett.
"We've been approached by people that would like to think about putting an arena there for various events," Maddox said, noting that others have gotten in touch about other possibilities for the land. He added, "We're not in a rush, but we do think that is really going to add to the area and the revenues of Encore Boston Harbor over the long term."
Maddox was on Tuesday's call in a slightly different capacity than the last quarterly investor call. In June, after the Massachusetts Gaming Commission skewered Maddox's leadership abilities, fined him and made him attend leadership training, Wynn Resorts quietly stripped Maddox of the job as company president and gave that title to Chief Financial Officer Craig Billings.
Late last month, MGM Resorts International announced its own second quarter earnings, including $911 million in revenue from its regional operations, which include MGM Springfield. The company's earnings presentation did not break out revenue at MGM Springfield, but the company said the western Massachusetts casino, which opened just less than a year ago, "continues to ramp" up.
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