Macau casino resorts spent most of 2019 seeing declining revenues due to the U.S.-China trade war. 2020 is far worse by comparison, thanks to the pandemic, but Wynn Resorts warns the trade war is still a looming threat to their future business.
In a filing with the Hong Kong Stock Exchange, Wynn cautioned that President Donald Trump’s executive order which, which prevents U.S. companies from using WeChat could impact their Macau operations. “We are unable to ascertain the scope of the ban at this point and there is no assurance that the ban will not adversely affect our ability to communicate with certain of our customers,” it said.
Previously, experts warned that this might be the case. WeChat is the communication and payment tool of choice for many Mainland Chinese visitors to Macau. If the American operators in Macau, namely Wynn Resorts, MGM Resorts and the Sands, don’t have access to WeChat, their customers may start ghosting them and visit Melco Resorts, SJM Holdings, and Galaxy instead.
Along those lines, Wynn offered some advice to the big political players involved here, and pretty much told them to knock it off before they ruin global trade for everyone:
“Sustained tensions between the United States and China could significantly undermine the stability of the global economy in general and the Chinese economy in particular. These recent events have also caused significant volatility in global equity and debt capital markets, which could trigger a severe contraction of liquidity in the global credit markets.”
Wynn also added that they expect the premium segment to help them come back from the pandemic. That’s not necessarily a commonly held view, as some have suggested VIP play may never return to what it once was, and tourism studies show very few Chinese want to travel at all at this point.
The operator also assessed the current state of travel bans. While hopeful that restrictions would continue to ease, as Macau has recently announced the Individual Visit Scheme will resume in the near future, it held back on offering any prognostication on when Macau will be bustling with tourists once again.
