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LAS VEGAS, Nevada -- Encore will open Monday in the middle of the worst economic crisis to ever impact the gaming industry. Through October, Las Vegas casino revenues are down 8.7 percent while visitation is off 3 percent.
So, is Wynn Resorts Ltd. Chairman and Chief Executive Officer Steve Wynn worried as he is about to unveil his newest $2.3 billion hotel-casino?
"Are you nuts? If I didn't say yes, you would walk out of here thinking I was crazy," Wynn said about two weeks before the resort's opening.
"The economy absolutely concerns me. I've never experienced anything like this," said Wynn, who has been operating casinos since the 1980s. "Because we're financially secure, we look upon this as a management challenge."
Encore has been under construction for more than two years. Timing placed the opening in the midst of the national and global financial meltdown.
"There was no way around it," said Andrew Pascal, the president and chief operating officer of both Wynn Las Vegas and Encore. "We realize the world has changed, but if we deliver upon the promise to our guests, then we are meeting our goals."
Encore will open with 5,000 workers, down from the planned 5,400 employees the company had originally sought. Pascal said more than 100,000 potential employees filled out job applications, double Wynn Resorts' expectations. Some of the job classifications were changed from full time to extra part time. About half of Encore's work force is coming from Wynn Las Vegas.
"About 85 percent of the guest experience comes from the staff," Wynn said. "So the employees matter."
Encore's dealers will operate under the tip-pooling program than was implemented at Wynn Las Vegas about a year after it opened.
Wall Street is watching Encore with great interest.
Deutsche Bank gaming analyst Bill Lerner said Encore will create a buzz, but the sour economy doesn't present an ideal opening environment.
"I can't imagine Encore will grow the market dramatically," Lerner said. "I suspect it will take business from its peers, including Wynn Las Vegas. Obviously, it was unrealistic for Encore to wait or delay its opening."
Macquarie Capital gaming analyst Joel Simkins said Encore isn't creating a lot of commotion yet among the average gambling consumer, which could hurt profits.
"It's a nice new building, but we're in a difficult environment," Simkins said. "Palazzo hasn't been absorbed and we have CityCenter and Fontainebleau opening next year."
Wynn doesn't consider the challenge daunting for his management team. It's a chance to show Wall Street the group's abilities.
"Our managers and our whole organization are going to prove how smart we are," he said. "Can we deal with a down market successfully? We're pros and we're supposed to be able to do that. Any jackass can deal with the boom time."
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