Numbers Cruncher

As a sparkling new tower at Wynn Al Marjan nears completion, the operator is moving closer to opening the first retail casino in the United Arab Emirates.

The 1,158-foot tower will be the hallmark of a $5.1 billion integrated resort that is set to open in 2027. For any major project, a prudent financial analyst ensures that cost overruns don’t run rampant. Here, the company will turn to the trusted hands of Wynn Al Marjan Chief Financial Officer Robert Gansmo.

Formerly CFO at Wynn Macau, Gansmo has returned to the company after a stint at High 5 Games in a similar capacity. In his previous gig with Wynn Resorts, Gansmo received plaudits for shepherding the company through a tremendous period of growth following the IPO of Wynn Macau. He will likely encounter comparable challenges in the Middle East.

For this historic debut, Wynn is going all out. Situated on a series of coral-shaped islands, Wynn Al Marjan will feature sweeping waterfront views, providing guests with access to the white-sand beaches that are within walking distance. The resort will offer an estimated 1,530 rooms, a deep-water marina, a theater and 22 restaurants. Ever the competitor, Wynn projects that the tower will exceed the height of the Burj Al Arab, one of the region’s most recognizable hotels.

Nevertheless, fiscal discipline is a must. In December, Wynn released a 73-page presentation as part of a UAE market tour for analysts and investors. While the company has made significant progress with construction, it’s working assiduously to contain costs. According to the presentation, Wynn will rely on a strict development approach with fixed fees, unit pricing and provisional sums as a way of mitigating risks in the timing, cost and quality of the project. Of the $5.1 billion budget, approximately 67 percent, or $3.4 billion, has either been spent or fully bought out, Wynn disclosed in the presentation.

Wynn took great steps during the presentation to illustrate the role tourism will play in the project. While Dubai can be a hike for many tourists, a flight to the city is eight hours or less for at least 75 percent of the world’s population. Although a 50-minute commute from Dubai International Airport to the resort seems lengthy, Wynn believes the drive compares favorably to those of guests motoring to the largest casinos in the U.S.

Interestingly enough, Wynn spent little time in the presentation discussing plans for its VIP loyalty program. Eventually, it’s bracing for competition from two rivals in the market. On a long-term basis, Wynn Al Marjan estimates that it will maintain a market share of 33 percent, with the assumption that two others will also open  UAE resorts. It’s not a surprise, then, that Wynn has remained close to the vest with program details. It doesn’t want to tip its hand to rivals.

Over the summer, UBS analyst Robin Farley raised her price target on Wynn from $101 to $147 a share on the company’s ambitious development plans in the UAE. With its first-mover advantage in the region, Farley believes Wynn will be able to capture the region’s wealthy international clientele. More recently, Wynn Resorts CEO Craig Billings indicated there is some conservatism in estimates that the total addressable market will be from $3 billion to $5 billion.

Gansmo and his team will likely be tasked with designing creative methods to attract those high-end clients. Wynn projects a vast range in GGR spend per adult, ranging from bearish estimates of $391 to $651 for bullish ones. The company may also be bolstered by a spike in visitors to Ras Al Khaimah, the emirate where its UAE-based resort is expected to open in March 2027. Throughout the emirate, overnight hotel visitation is expected to more than double by 2030, according to Wynn estimates, with demand projected to outpace supply in 2027.

Following the grand opening, Wynn Al Marjan could have room for fine-tuning. Wynn properties have historically ramped up in about three years, with a significant jump from the first to second year. Based on Gansmo’s track record, though, don’t expect him to rest on his laurels without clear signs that the project has met his high expectations.