Friday, September 19, 2008

Casino Economics: Wynn EBITDA per room per day is higher than their ADR

I am becoming more and more fascinated by the economics of running a Casino. They are the largest hotels in the world, yet the hotel is clearly a mere means to the end of making money from gambling, retail and entertainment. I was looking at Wynn a presentation at given at a Goldman Sachs Conference in June. Below are shots of two of the slides. Look at the Average Daily Rate for Wynn for Q1 2008 - $298 (comparing very favourably to Bellagio and the Venetian). Then look at the slide on EBITDA per room per day. Wynn lists their EBITDA per room per day at $378. Read it again. At a property with an ADR of $298, the business can generate an EBITDA of $378 per room per day. Amazing! Have I read this right? The revenue from gaming (and to a lesser extent retail and entertainment) makes the room revenue seems all but irrelevant. What a business!

ADR Slide

EBITDA per room per day slide


WildBron said...

Tim, could you imagine how impressive will be comparison of EBITDA and ADR for any brotel in Amsterdam or King's Cross!!!

Anonymous said...
This comment has been removed by a blog administrator.