U.S. casino tycoon Steve Wynn's newest pleasure palace in Macau boasts massive dancing fountains but the Chinese territory is anything but bubbly as it prepares to welcome the $4 billion resort to its struggling glitter strip next week.
Macau's most expensive casino yet is due to open on Monday a month ahead of a $3 billion gaming resort by U.S. billionaire Sheldon Adelson, marking the beginning of the end of a boom in grandiose casino construction that helped transform the former Portuguese colony into the gambling capital of the world.
But the properties--featuring thousands of hotel rooms, an aerial gondola and a miniature of the Eiffel Tower--are opening as Macau gambling revenues languish at 5-year lows and a corruption crackdown forces Chinese high-rollers to play in rival Asian destinations.
Wynn declined to say how long it would take to break even on the investment as he addressed reporters at a pre-opening event in Macau on Wednesday, but emphasized this would be a diversified resort with gambling merely being one attraction.
"In every business there are good years and bad years. For our return on investment I expect we will be fine," he said.
"What we are seeing now is a more normalized kind of market."
Casino bosses like Wynn are betting the new resorts on the Cotai strip will breathe life back into Macau, which generates five times more gambling revenue than Las Vegas.
Analysts however warn that additional supply could increase competition at a time when operators are already offering discounts to lure patrons.
"If they (Wynn) had known they definitely would not have spent $4 billion, they probably would have spent something like $1 billion," Nomura analyst Richard Huang said in Hong Kong.
Wynn Macau's newest property, Wynn Palace, would be profitable, Huang said, but it would likely generate a disappointing return on investment. With hindsight, it was clear that the operators, particularly Wynn, miscalculated their expansion during the boom years, he added.