Wynn Resorts (NASDAQ: WYNN) is one of the big players on the Las Vegas strip. Its flagship resort on Las Vegas Boulevard and its 2008 hotel and entertainment complex Encore account for about $120 million in annual revenue. Wynn Resorts offers some of the highest quality accommodations in the world – winning the coveted AAA five diamond award and the Forbes five-star award for 2011.
It goes without saying that gaming and tourism are the lifeblood of Sin City, and Nevada has suffered in the recession. In 2007, Las Vegas had more than 39 million visitors and resort coffers were flush with cash. By 2008, the recession had pushed occupancy rates to a 5-year low. Today, tourist traffic has yet to bounce back to pre-recession levels.
Las Vegas, Nev.
Discretionary Consumer Goods
However, For Wynn and for Las Vegas, things are starting to look up. WYNN stock is fighting back to its 2007 peak levels, and big-spending customers are slowly starting to return. Nothing screams discretionary spending quite like casinos and resorts. And nothing tells the story of America’s abrupt end to its free-spending ways quite like the rise and fall of casino stocks.
Wynn opened its Encore hotel and casino complex right before the Great Recession, adding about 2,000 suites, 100 gaming tables and 850 slot machines. While the new facilities didn’t impressively impact earnings, they may have provided a way for Wynn to at least maintain its foothold as a premium gaming destination on the strip.
The course of WYNN stock in the months ahead will say a lot about the recovery of Nevada and American consumer spending.
It’s also worth noting that Wynn Resorts also has exported the American casino model abroad. It opened a flagship resort on China’s Macau Peninsula in April 2010. Another Macau property is slated for a 2013-2014 opening.
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Jeff Reeves is editor of InvestorPlace.com. As of this writing, he did not own a position in any of the stocks named here. Follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook.