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Wynn CEO Sees Parallels to Roaring ’20s for Las Vegas Recovery

Wynn CEO.jpgWynn Resort Ltd.’s top executive harkened back to F. Scott Fitzgerald, “The Great Gatsby” and the Roaring ‘20s to describe how he thinks Las Vegas is going to rebound once the coronavirus pandemic subsides.

Wynn CEO Matt Maddox, in an interview with Latin Chamber of Commerce President Peter Guzman as part of the chamber’s symposium series, said he’s still concerned about the possibility of another shutdown in Las Vegas and that he had a head start to prepare for the severity of the pandemic because of his experiences in Macao.

Maddox said he anticipates it’ll take two years for Las Vegas to fully recover..

“Las Vegas itself, because of our heavy reliance on conventions, is going to have a slow comeback,” Maddox said. “But, on the flip side, I think we’re smart enough and we’re doing it to attract more leisure customers coming to have fun because I think people are really going to want to get out and have a good time.”

Maddox said Las Vegas is built around mass gatherings more than casinos.

“Casinos are great and that’s what’s carrying us right now,” he said. “It’s built around shows, entertainment, and conventions and nightclubs and people coming together to have fun.

“What I’ve learned about our experience in China, since they’re now moving in China and the nightlife is back, people got really sick and tired of wearing their sweats and pajamas every day. Once they got out and got that taste of being around other people, it’s like electric.”

Maddox said returning large gatherings would be the catalyst Las Vegas needs to rebound.

“We’ve got to get shows back again,” he said. “We’ve got to get conventions back again. And I think people are going to want to dress up and go out and be around other people once they feel safe. It’s going to be similar to the Roaring ‘20s after the pandemic of 1918 and 1919. You went into ‘The Great Gatsby.’ It’s like, ‘Oh my God, we survived this. Let’s have fun.’”

Ready to go

Maddox said with the arrival of the National Football League and the Las Vegas Raiders and venues ready to host concerts and special events, the city is well prepared for the long haul.

“I think we can make up, not for all of it but a lot of that business, and I think Las Vegas can establish itself as sort of that place to go again, quickly, to let loose,” he said.

Maddox wasn’t the first to express public optimism about the future. In an earnings conference call last month, Caesars Entertainment Inc. CEO Tom Reeg told investors that big profits are ahead.

“What I tell you today is when we get into a post-COVID world, the pent-up demand you’re going to see for gaming in general and Las Vegas in particular is going to be beyond your wildest dreams,” Reeg told investors in the company’s Nov. 5 call.

“The flow-through that you’re going to see in the sector is unlike anything that has happened,” he said.

Investors not happy

Maddox said investors are not happy that Wynn has spent so much on reacting to the pandemic.

“We were the first to shut down in Las Vegas,” Maddox said. “We did it before the mandate because it was the right thing to do. It was impossible to stay open. Because we kept all 30,000 employees that we have, we kept them all on during the closure. We spent a quarter of a billion dollars. Our shareholders hated it. And I explained to them, ‘Listen, there is one thing I am telling everybody in my company every day: No one remembers what happened in 2016. Nobody remembers what happened in 2013. But every person that’s alive today will remember 2020. And you know what they’re going to remember? How they were treated.’”

Maddox said the company’s reaction to the pandemic was an opportunity to show the world what the company wasn’t just about profitability.

“This is our opportunity to remind people who we are and we step in when times are tough and they are going to remember it,” he said. “Customers are going to remember it. Our employees are going to remember it. Our elected officials are going to remember it. This is our moment to walk the walk. So yeah, shareholders aren’t going to like it because it costs a lot of money. So what? We’ve got to show who we are and I promise there will be payback because no one’s going to forget this year.”

Maddox said he is fearful of another closure before things turn around. But he also said Wynn has had experience addressing government mandates, citing Massachusetts’ recent curfew directive.

“If there’s a closure, we’ll close,” he said. “It won’t be for a long time. I think it would be like in Massachusetts. They put in a curfew so everybody’s got to be home at 10, period. So our casino in Massachusetts closes at 9:30. You could see curfews, you could see restrictions, you could see all types of things going on, it’s really a state-by-state case.”

“We now have practice at this,” he said. “It would be hard, it would be tough on people, but we know how to do it and we’re preparing for the worst and hoping that we just kind of get through it. I really think by the summer — which feels like a long time away, but it’s not — we’ll be back. Conventions will be back. The vaccine will be rolling out, testing will be widespread and people will be ready to be back with other people. I think we’ll start feeling that momentum in Februaryish, March, coming out of the winter. Between now and then, it’s a bucking bronco.”

Macao experience helped

Maddox said he got an early look at how bad things were going to be, thanks to his experiences in Macao.

“This pandemic, I had a little head start on it because a lot of our business is in China. I actually lived in Hong Kong during SARS (Severe Acute Respiratory Syndrome), which was a very localized epidemic that was horrible in 2002,” he said. “When I started talking to my colleagues in Macao about what was going on in China in December and the U.S. thought this wasn’t our issue, the fear in their voices was significantly more than it was during SARS. A lot of employees from Wuhan and their family members were dying non-stop and I thought, ‘I better get ahead of this,’ because I lived through SARS and this ain’t SARS.”

Wynn retained Dr. Rebecca Katz, director of the Center for Global Health Science and Security at the Georgetown University Medical Center who last month was appointed to advise President-elect Joe Biden’s COVID-19 task force to communicate with Maddox.

The company’s efforts to understand Macao led to the company developing plans to partner with University Medical Center for a testing laboratory, the first of its kind for an entertainment company. The lab, to be completed in about a month, will provide diagnostic testing that can process between 6,000 and 8,000 COVID-19 tests in six hours.

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