Wynn and Glut of Vegas Rooms

Glut Of Vegas Rooms Puts Wynn’s Rates And Stock Under Pressure

The average daily rate for Wynn Las Vegas hotel rooms has declined over the past few years, from $288 in 2008 to roughly $203 in 2010. A primary culprit behind this trend was the economic recession and consequent decrease in consumer discretionary spending.

We also note that occupancy rates are often a more important metric to hotel operators than average daily rates, as guests that occupy the available rooms can then spend money on food and entertainment. High end resorts like Wynn Las Vegas and Las Vegas Sands decreased ADRs drastically during the recent economic recession to draw visitation.

Despite eroding profitability for Wynn’s Las Vegas operations, the company’s value has been bolstered by surging business at its resort casinos in Macau.