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Published Tuesday, Feb. 3, 2009 | 3:43 p.m.
Updated Tuesday, Feb. 3, 2009 | 6:30 p.m.
Wynn: Economic Conditions in Vegas
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Steve Wynn discusses the state of the economy and its effect on Las Vegas during an interview with Robin Leach.
Wynn Resorts today announced a cost-reduction program for its Las Vegas resorts that includes salary reductions for salaried employees, reduced work weeks for full-time hourly workers, the elimination of 2009 bonuses and a suspension of the company match to employee 401(k) plans.
The company will reduce salaried employees' paychecks by 10 to 15 percent. Corporate-level executives have already taken a pay cut.
The program is expected to save about $75 million to $100 million a year.
During a conference call, Chief Executive Steve Wynn said the initiatives are intended to fend off a worst-case scenario playing out at competitors that are laying off workers in the downturn.
“Everybody makes a little less money but everybody keeps their jobs,” Wynn said. “We don’t want anybody on unemployment here -- or without insurance.”
While some casino companies struggle to make bond payments and have little left for upkeep, Wynn reiterated that his company has money to burn while profits suffer.
The company has $1.1 billion in cash on hand and $375 million in loans coming due over the next two years, executives said. Its sister Encore resort in Macau is fully financed and is expected to open by early 2010.
The company didn’t scrimp on marketing and extra staffing leading up to the Dec. 22 opening of its $2.3 billion Encore resort at a time when competitors were slashing their budgets, Wynn said.
Opening a new resort allowed Wynn to reduce staff at Wynn Las Vegas without resorting to layoffs, as many workers were transferred to jobs at Encore. The company employs about 11,400 people in Las Vegas, about 9,500 of them full-time employees.
Amid the downturn, Wynn has repeated a mantra that includes sacrificing potential short-term profits for long-term gains – a message that isn't always embraced on Wall Street.
Wynn said his company spent a “ton of money” on special events and other marketing through the end of January related to the debut of Encore, which he called the “smoothest” opening in his 40-year career in the gaming industry. The best course of action, he said, was also more expensive.
Echoing comments made by many of his peers on the Strip, Wynn said future business and consumer behavior has become unpredictable like never before. Business during Chinese New Year and the Super Bowl was slower this year as well-heeled visitors “are being a little more disciplined in their expenditures,” he said.
Wynn said he cut hotel rates at his Las Vegas resorts in January to boost business, forcing competitors to drop their rates – a distasteful though practical move.
“Right now we are pricing the Strip,” he said.
Wasn't Wynn supposed to be doing well compared to competition?
Sounds like he's using the economy as a scapegoat for his desire to squeeze employees more.
I agree with the 401K freeze and pay and bonus freeze, but the salary reduction and hour reduction for worker bees just seems like a farce
Wynn is doing the tough thing,but he is keeping people on the payroll who are hourly workers, and salaried workers, so they can maintain their insurance. However the reduction in hours for the hourly workers quite likely will cut deep enough so that some will lose elgibilty for insurance anyway.
We should raise state taxes a ton to help Wynn with his money problems.
That will help him a lot!!!!!
Never forget when the Wynn opened. I'm with my girlfriend waiting to get a players card, and she's from Washington, so no problem. But before I get to the window, some schlepp in a Red Buttons outfit asks me if I'm a local. I said yes. So he says "Here, here's a temporary card, get 500 points, and we'll give you a players card." Nice. So Steve, let's put it this way. I hope your new squeeze is a cutie. Elaine was getting a little worn around the edges. So even though you crapped all over the 2 million locals, we hope the best for you and your new chickie. Maybe....
Thank you Harry Reid. Your taking orders from Pelosi, Dodd, and Barney Frank with the housing mess you guys created, the rise in energy with STILL no legislation to increase production, has ruined Las Vegas for decades. People can't come spend extra vacation money when no one has any. Now we can't attract business meetings or conventions (see story on Wells Fargo) without the ONE calling them out for extravagance. Where do you think it leaves this city with your guy calling spending in Las Vegas as morally wrong. Thanks harry, you just keep on helping.
Steve Wynn will do anything to get his name in the paper. Can you believe what he is paying Danny Gans? He has been doing the same act for the last 10 years! how about reducing prices at your GOURMET restaurants?
Here's a thought with all the money we have gave out in the stimulus money each one of us would have recieved a $100,000 dollars and many would have used that to come here and play. But of course our great politicians would never think of such a great idea. Steve is doing what he has to and we all know his casino's were never intended for locals he went for the european market and that is what keeps him going.
If anyone believes this town is trying to cater to locals you are crazy. You have to go way off the strip for that. Only the small neighborhood casinos are into that.
Steve Wynn still has insight and wants the best for his employees. Unfortunately, it doesn't always trickle down the line of managers into management for the front line employees.
Things are very different in this economy but if he can keep people employed, even with shorter work weeks, then he is achieving a goal that our U.S. Government needs to do too.
Seems funny that when I booked three nights stay at Encore, I was told they were sold out indefinatly.I ended up staying at the Wynn and were told they were at 100% ocupency for the last month.Does any one think Steve Wynn cares about his work force.He has proven to be an egomaniac and only loves himself more than his money!
I fairly certain none of you have lived in Las Vegas for more than eight years. Your opinions smack of ignorance. As usual.
"Wynn Resorts said its balance sheet remains strong, with more than $1 billion of cash on hand and only $375 million worth of debt due to be repaid over the next two years."
What a cunning move by Wynn. All this cash on hand and still whacking the employees? Might his motivation be to send a false message to the Legislature that his racket is hurting so they won't raise gaming taxes? Ah Steve, doing your part for Nevada's future.....
ltlbudah, before you quote some chain e-mail you should double check the numbers. Assuming the government stops at $2 trillion (2,000,000,000,000) divided that by 305.7 million people in the United States (305,700,000) and the result is nowhere near $100,000 per person more like ~$6,542.
Being a former employee of Wynn Las Vegas something is really going on wrong at the Wynn. Heavily overstaffed comapared to the business needs, no overtime being allowed not even 1 minute and the moral is very bad. Steve Wynn seems to be hiding behind the fact that its all about the guest and convincing his employees that everythings just fine. Chinese New Year and there big super bowl functions which generated very little profit is whats going to bring the house down in the long run. Lets face it although he may still have cash flow coming in somethings gotta give and will. I give it 1 month until layoffs take effect, you'll see. An Encore, no a failure. No one man can defy the current shape of the economy. Just ask yourself this question, Would you open up a 2.8 billion dollar hotel in these time??? NO!!!
The same thing happened to me when Wynn first opened. I wanted a players card and all I got was a blank 'temporary' card - they wouldn't even issue me the real thing until, I guess, I proved I was gonna spend some money. I promptly laid down the temp. card and walked out - never to return LOL
Hey ltlbudah, that would be a great stimulus - give all locals a preloaded player card with about $5000. I'd go for that - better than throwing it to the auto industry or the banks.
How clever of "Steve-O" to cut wages and hours of his employees as a ploy to save himself money..this guy is a creep-a-zoid of the first order. He is using the economy as his excuse to allegedly save employee jobs...nice try Steve...
Next time you are on top of "ENCORE" finish the commercial in class....jump off!
Someone more clever than I may have to come up with cutesy marketing names that embrace different points on the Locals-Tourists spectrum.
Perhaps SuperLocals, Locals, TouristWannabe, Tourist, SuperTourist. Its sort of like the terms "strip odds" and "downtown odds"... the terms still exist but their meanings and significance have changed and they no longer have any real geographic validity. Its the same way with casinos: they all want a "mixed customer base" composed of locals, tourists, low income, middle income, wealthy and super-wealthy.
An illustrative detail: the airport shuttle drops passengers bound for The Venetian off in some distant Siberia and they WALK for "miles" to get to the main entrance, simply because Adelson values customers who arrive by Limousine far more than 'peasants' who arrive by the airport shuttle. At Wynn properties, many of their customers arrive by Limousine too, but even those who arrive by airport shuttle are dropped off at the main entrance and welcomed!
Steve Wynn's public pronouncements about keeping everyone on the payroll and everyone sharing in the pay cuts is good. Ofcourse time will tell whether its just guff or not, but when the rebound comes, Wynn properties will have waiters, maids, dealers, etc. and all the other properties will have new hires and training schedules. Meanwhile, before the rebound takes place, Wynn properties will have plenty of maids to keep the rooms clean while other properties will have far fewer and far more exhausted maids on their staffs. So Wynn will benefit from these policies. His employees will remain enthusiastic.
So the influx of Asian Dollars and SuperBowl Dollars was less than expected this year? Okay... Steve Wynn tightens his belt when that happens and encourages his workers. Other casino owners all fire half their workers and the CMs use their belts to whip the remaining workers into submission. Which casinos will have a brighter upside potential when that rebound finally arrives?
I just received a casino rate offer to stay at the "Encore".
We are looking forward to our stay.
I want to say Thank You.
I just returned from the "Palazzo". I had a great time and will return soon.
My wife and I had a great time. We had not been to Vegas in a couple of years.
From what I observed we may see some casino's going dark on certain days in order to survive.
Most people in this country expect jobs to be waiting for them automatically. No so, sometimes you have to earn the privilege to work for someone else. At least that is the way it was in the "Old School"
Acesbet@aol.com
My wife and I USED to go to the strip once a month for a day of gaming ...no longer... the strip casinos decided that it is better for their dealers to stand at a table with no players than it is to have some tables with a five buck minimum and 5 or 6 players playing [and dropping a hundred bucks] in an hour or so of activity.
Casinos need to go back to the coin drop for payouts. My husband and I just returned from our annual trip and some of the casinos were so quiet...even though there were players. Coin drop was fun and at least gave the impression someone was getting something. It also would provide additional employment to LV.
Wynn employees take 10-15% pay cuts and state workers complain about 6% cuts?
State workers threaten to work less, Wynn employees are just thankful for a job.
State workers demand the state increases taxes. Wynn Employees still thankful they have a job.
more bad news for wynn. Wells fargo has been forced to cancel its jolly at encore for its executives.
Friend in Texas just got a deal to stay for free for 3 nights. Wynn is hurting to offer that to them since they are anything BUT high rollers! lol
kdr81/patrick/npri;
Give it a rest. Do you suppose the Wynn employees are "happy" about it? Have you polled the workers there to find out what their thoughts are about a decrease in wages?
State workers just want to make a freakin' living just like you & me. OF COURSE they don't want a pay cut!
Quitcher bashing.
I am local and got a Red Card with $25 play on it with no problem. Until this year they put $10 play on it every week. For one month I got $25 play every week. Also 2 free buffets. I'm happy and will keep going back. I love the Wynn. Steve Wynn is what Las Vegas is all about.
blah, blah, blah..... we want our tips!!
idiots, we've been telling you this the whole time. now, you can be broke like the rest of us.
For those who always bash Steve Wynn, he is the one who changed the landscape of Las Vegas.
The man might well be considered an egotist but he is ultimately a visionary who turned his ideas into reality and hence created tens of thousands of jobs in Las Vegas.
His hotels and casinos have set the standard to follow.
For those that whine incessantly about his taking your tips, get it in your heads that he hired you and allows you to make a living far above your skill level -- you're a dealer not a heart surgeon, getting paid $90k a year to spin a ball or flip a card is pretty good compensation.
The man is a casino savant, what are you?
Of course they're not happy, but Wynn employees are not good-for-nothing workers who threaten to work 6 percent less.
But I bet they're happy to keep their job given the alternative. (Didn't you read my post at all - because that was the point).
KDR81, when you say, "Wynn employees take 10-15% pay cuts and state workers complain about 6% cuts? State workers threaten to work less, Wynn employees are just thankful for a job." By "state workers," you obviously mean teachers because they are 75% of "state workers." So, we are going to compare teachers who earn an average of $40k or so to the average employee at Wynn properties that makes 80K or so? You've got to be kidding me. Nevada can't afford to pay teacher less.
AS A MOM, I'M TERRIFIED AT THE LENGTHS TO WHICH JIM GIBBONS AND THE LAS VEGAS CHAMBER OF COMMERCE WILL GO TO COMPLETELY GUT EDUCATION IN NEVADA. Both Gibbons and the Chamber should be ashamed of themselves.
I just watched the Video on the Steve Wynn economic conditions of business in Vegas.
It sounded like "Good old School" business to me.
For many years now it has been a "Me,Me,Me" business enviorment.
I don't care what it cost. I have a Credit Line or Credit Card. I want it now. Live for today now.
Steve seems to have been more cautious.
Kudo's