Wynn Resorts Halts $375 Million Renovation Project in Las Vegas Because of Escalating Costs Due to Tariffs
Grabbing the Brakes on Wynn Resorts' Renovation Plans
Wynn Resorts is hitting the pause button on a whopping $200 million worth of renovations to the Encore Las Vegas, all thanks to a troublesome trade war started by President Donald Trump. The cost hikes, primarily for furniture, equipment, and decor, left them with no choice.
The company's CEO, Craig Billings, revealed this news during a quarterly earnings call. He mentioned that they're putting the brakes on $375 million in capital expenditures in Las Vegas until tariff rates find some stability. Once that happens, the team will reevaluate and renegotiate, aiming for the best possible prices, particularly for items most badly hit by the tariffs.
The centerpiece of the work is the Encore tower renovation, but other projects also take a backseat. These include expanding high-limit gambling areas, work on the Golf Course Club House & Grill, and the Zero Bond club.
Craig's right-hand lady, Julie Cameron-Doe, Wynn Resorts' Chief Financial Officer, wasn't quite able to predict when the work might resume. The current economic climate makes renegotiating a tricky business.
This economic turmoil has popped Wynn Resort's bottom line, with first-quarter revenue in Las Vegas dropping $11.3 million year-on-year to $625 million. Visitor numbers have taken a hit as well.
Background Check: President Trump's tariffs have cast a shadow over Wynn Resorts' renovation plans, particularly at the Encore resort in Las Vegas. The company has postponed $375 million in capital expenditures due to the economic uncertainty caused by these tariffs[1][2][3].
Unexpected Setbacks:- Renovation Delay: The most substantial issue is the postponement of the Encore Tower remodel. This delay is a direct response to the economic uncertainty and potential cost increases caused by the tariffs[2][4].- Economic Uncertainty: The tariffs have created a climate of unpredictability, hindering Wynn's ability to move forward with projects that rely on international materials and labor[3][4].
The Domino Effect:Though specifics for other projects are not widely known, the broader halt in capital expenditures suggests that Wynn Resorts is carefully considering future investments in light of the tariffs. The company is likely assessing the wider implications of these tariffs on its portfolio of properties, not just in the U.S., but abroad[1][4].
Call to Action: Craig Billings' acknowledgement of the halt in capital expenditures highlights how tariffs can influence major investments in the hospitality sector, affecting not just Wynn Resorts but possibly other companies grappling with cost concerns and supply chain disruptions[1][3].
- The CEO of Wynn Resorts, Craig Billings, has rescheduled renovation plans for the Encore Las Vegas, due to increased costs mainly from furniture, equipment, and decor caused by tariffs.
- The delay in renovation includes not only the Encore tower but also projects such as expanding high-limit gambling areas, work on the Golf Course Club House & Grill, and the Zero Bond club.
- The $375 million in capital expenditures in Las Vegas are on hold until tariff rates find stability, according to the Wynn Resorts' CEO.
- The delay in renovation and renegotiation is a result of the turbulence in the casino-and-gambling industry, particularly in the finance sector, caused by the tariffs initiated by President Trump.
- The rescheduling of Wynn Resorts' earnings, particularly in the casino-business in Las Vegas, are expected to be impacted by the changes in the casino-culture caused by the tariffs and the resulting economic uncertainties.
