永利渡假村 (WYNN) 2014 Q3 法說會逐字稿

Welcome to the Wynn Resort third-quarter 2014 earnings call. I will now turn the conference over to Mr. Lewis Fanger, Vice President of Wynn Resorts. Please go ahead.

Good afternoon, everyone. Welcome to the Wynn Resorts' third-quarter 2014 earnings call. Joining the call on behalf of the Company today are Steve Wynn, Matt Maddox, John Strzemp, Steve Cootey, Maurice Wooden, and Scott Peterson here in Las Vegas, as well as Gamal Aziz, Ian Coughlan, Frederic Luvisutto, Linda Chen, Robert Gansmo, and Frank Cassella dialing in from Wynn Macau.

And with that said, let me turn it over to Matt.

Okay. Thanks, everyone. Before we get started, I just need to remind everybody that we will be making forward-looking statements on this call. And those statements may or may not come true.

With that, I am going to turn it over to Mr. Wynn.

Generally speaking, we were happy with the third-quarter. Basically -- with the last quarter, rather -- we made up in the slot machines in the general casino in Macau in mass what we -- what we're -- what we lost in VIP. And, so, it seems to me, as we look at October, that we are definitely -- you know, you've got to love Macao. We do, in this Company. And we have great, great confidence and gratitude to be involved with the place.

But it's always been government-sensitive. And the turmoil in Hong Kong, the smoking -- the new regulations of smoking, the turmoil in Hong Kong lately, in the month of October, and of course, the policy of the central government, and being aggressive about what appeared to be

misconduct and corruption in the government, has put a lot of the wealthy businessmen in the foxholes. Everybody is being very conservative at this point over there -- I think taking the cue from President Z, who is a very conservative man.

And it has had an impact on Macau in October. We have all noticed it. And I don't know whether it is a squall or we are in the rainy season or how long it will last, but we are still very, very bullish on Macau. And, as usual, in the past, when people used to ask us when are you going to get approval to start construction? When will you get your land concession? You -- things happen in China at their own pace and in their own time.

And for those of us who are lucky enough to be in business there, you have to sit there and go along with the program, and adjust to it as best you can. And that's what we do. And as far as construction goes, Gamal is on the call, if anybody wants to ask him about it. But we're on target, we're on budget, we're on time. And Wynn Palace is proceeding. We think that it is going to be a very wonderful addition to the market in terms of attracting people to Macau.

like -- as in the case of our competitors, everything that is being built lately is even better than what has been built before. The community's social profile is being lifted; the quality of the products that are being offered in terms of hospitality; non-gaming, food, beverage, entertainment, and meeting and conventions, all the rest, get better and better as that town takes advantage of its competitive superiority.

With regard to Las Vegas, we were very happy with this quarter. It is a continuation of what we have seen in the past. All of our metrics have improved for the previous -- for the running 12 months. I think our EBITDA was 520-odd-million-dollars. And if we can hold on during fourth quarter, we ought to be able to get to the [five] I hope in the calendar year this year.

That is pretty much my comments about the status of our business. We did increase -- if you've noticed, we have increased our regular dividend effective immediately to $1.50 a quarter. We want to stay very conservative. You know we have a tremendous focus on our balance sheet. And we have made our special dividend $1.00 and elected instead to increase the regular dividend by another $1.00 a year.

And finally, in Boston, just finished the casino designs, the more meticulous and more detailed aspects. We intend to present a product in Massachusetts that has never been seen before in any city or any country, including in our own buildings. We have taken an approach to Boston that is dramatically different than any casino presentation that has been seen in our industry historically.

I don't think in my 40-odd years that I have ever been as excited about a project as we are about Boston. Hopefully, the election a week from tonight will confirm that the legislation stands and the voters of Massachusetts will vote no on question three. I had the unusual experience of talking to former Congressman Barney Frank today and congratulating him on his op-ed piece in the Boston Globe, in which he explained that people should be allowed to spend money as they see fit.

And with that, we'll take questions.

(Operator Instructions) Felicia Hendrix, Barclays.

Steve, as you started your prepared remarks, you mentioned about -- you were talking about Macau, and how it's interesting because there's a political influence there. And you were talking about how some of the VIP's were lying low in the quarter. Given your view of how things were perhaps stabilizing in July when you talked to us last, was that what surprised you most about the market? Or were there other things that surprised you in the quarter?

Well, you know, it's interesting to see the business community respond to the tempo of the central government. The businessmen that we talked to in Macau are very sensitive to the mood of the central government. And I guess -- you know, I don't know how to say it any differently than that -- you compound that with the disturbances in Hong Kong, which has certainly put the central government to the test on one of its most basic perks or prerogatives in the modern world, with the special administrative region of Hong Kong, and that is, you know, who's going to nominate the candidates? Or what is the nominating process for candidates for Chief Executive Officer?

These are very, very interesting issues. And as you utterly observe on the media, there's strong feelings in the community. And my guess is that, at some point, the matter will be resolved and everything will settle down. The business interruptions in Hong Kong are disturbing to the business community and to the community at large in Hong Kong. And I'm sure they're disturbing to the central government.

It's hard to believe that both sides will remain attractable, but it is, after all, People's Republic of China, and Hong Kong is part of it. So it will be interesting to watch it play out. The only thing I'd share with you is a front row seat to the process. And hope that it plays out in an orderly fashion. We experienced, in October, a perfect storm. We had the lowest hold percentage for a number of weeks than we've ever experienced in China.

When I saw it's a perfect storm, it's unusual -- it's a statistical anomaly to hold 0.9% or something like that in a 2.7% or 2.9% game. But on the other hand, we've held 4% on occasion. So, it's a gate that swings both ways. Those things straighten themselves out. We don't pay really any attention to that. Adjusted, our whole percentage would put us in a market share of about 10% again. But even at 10%, we suffer the same fate as the rest of the market when it experiences a decline.

So I don't know if surprise is the right word. Disappointment certainly is a word.

I try not to use that word, so I use surprise. You know, you would (multiple speakers) --

Disappointment.

You used -- you talked about holds on the VIP side. It does look like you held a little bit high on the mass side as well on Macau, just relative to the past few quarters, where we've really been seeing the impact of -- or the increased purchases at The Cage. How should we look at -- just since it's not -- somewhat of a new phenomenon, seeing the holds, seeing the kind of mid-40 percentages, I know it was 50-and-change this quarter. How should we think about a normalized hold for your mass segment?

Great question. I don't have any more clues than you do on this one. I think what you should do is pay attention to the wins. I mean at the end of the day, casino revenue before expenses is measured by how much is left. The purchase of these chips at The Cage represents a moving target, and I don't know how to explain it or to normalize it. Because I have watched it fluctuate as you have.

And you know, I don't think it really matters very much, really, when we get right down to it. I don't think it really matters. It is the revenue. It is that win figure that we are all focused on. And that is the one that counts.

Okay, that's helpful. And just finally, again, regarding the market -- and I'll use your word disappointed -- do you think any aspect of that is coming from the smoking ban?

You know -- we think -- I asked that question of my colleagues. Ian is on the call, and I think it would be a great thing for him to address.

Well, we've just had a couple of weeks to gauge it, and a couple of weeks after Golden Week, so I still think it is early days. There is no doubt going to be an effect, but I think it is the least of our concerns in terms of revenue drop-off.

We are all still engaged with the different departments of government in finalizing how our smoking areas and non-smoking areas are divided. It is still a discussion that is ongoing. The players have reacted very well to it. The smoking rooms that we've established at Wynn Macau have been very successful. We are in the process of establishing an additional smoking room based on location. But overall, I wouldn't say that that has had a huge effect on business. There has been some affect, but it has been marginal.

Also, I think that technology, as we go forward, is going to play a part in this. Right now, the air in the Wynn Casino before they stopped the smoking was better than the air outside the Wynn Casino in the street, in terms of general public health. And I think that within the casino, whether people are smoking or not -- in VIP rooms, for example -- we are able, with advanced air exchange methodology and technology, to keep the employees free of any potential impact of secondary smoke.

What is interesting in this conversation is that, in conversations with the Culinary Union that ensures all of the people that work in these casinos would have smoking, there is no evidence whatsoever of any increase in emphysema, lung cancer, or any other respiratory complication associated with working in a casino compared to the general public. So, the threat represented that smoking in our buildings, where we have very advanced air exchange technology, maybe it is because everybody knows that the air is cleaner at Wynn Las Vegas than it is anywhere else.

I'm sorry, it's my dog barking in the background. I beg your pardon. Anyway, the air exchange systems we use keep our casinos smoke-free. And although that hasn't been particularly important to the government in their determinations, as time goes by, I am hoping that we will get a very mature and sophisticated look at this problem, keeping first and foremost the health of our employees as the principal consideration.

Thank you very much.

Joe Greff, JPMorgan.

You did a nice job outperforming the market and Macau on the mass side. Steve, or Ian, maybe can you talk a little bit about what you are doing there? And do you actually think maybe the client and VIP are giving you sort of this indirect benefit, in that it frees up some rooms and table capacities to go after the premium mass customer?

And then, obviously, when Las Vegas Sands reported earnings last week, they talked about competition in the mass or the premium mass segment that led to their having some margin degradation on those segments. Can you talk about that on your side as well? Thank you.

The first question is, is there an increase in the mass because of the pressure on the VIP? I think the answer to that is yes. Is there margin pressure in Macau? Yes. The competition, as I have said on previous calls, is extremely intense and, if anything, inhibits market growth. Then, of course, you see this either a loss of market share or a loss of margin; one of those two things has to happen.

And we have got new facilities coming on in Macau in the next two years, including ourselves. We have got capacity increases coming in January in the existing Macau hotel. Very dramatic capacity increase, in terms of these -- the junket rooms we're building, these two gorgeous VIP areas. And that is going to allow us to increase our mass a little bit again.

So it's -- everybody is moving their floors. They are using their tables and their spaces intelligently trying to protect their margins, and to dedicate the tables that are available to the most profitable usage. We are doing the same thing. But I am not surprised to hear that there's margin squeeze at the mass market.

Have we noticed that, too?

In our mass market area, our margins have been constant over the last three quarters. So, give or take 100 basis points. So just in our mass area, in premium mass area, we have seen our margins stabilize.

Which is no indication that that will continue.

Yes.

Great. And when you look back at the 3Q, Matt, was there anything interesting from a margin or expense perspective? Obviously, 34.5% margins in the environment that we are in, in Macau, is a great result. Is there anything that, absent massive mix changes, that that is not a good level to look at going forward?

Well, Joe, the (multiple speakers) --

(multiple speakers) October.

Yes. Our mass in slots made up for it in the third quarter, but everybody is seeing the October results for the market are down over 20%. So clearly, there is going to be more margin pressure going forward.

And when you look at the October-to-date results, how much mass market growth acceleration is there? And that's the big question a lot of us are wondering right now.

Robert Gansmo is on and so is Frank. I don't know what our hold is en masse -- I mean what our revenue. I guess we can forget about the hold because of the chip issue. But I really hate to describe this quarter based upon three weeks. I'm very tentative about answering that one, Joe.

Okay.

I just think if I am too preemptive and premature, then I give you the wrong lead. And I know that you're asking the question for all the right reasons, but I wish I had an answer that I could lean on. And I am not comfortable on the short strength -- not with all the other things that are going on in Hong Kong and smoking. I'm confused at the moment, Joe. It was Joe that asked the question. Joe, I'm confused at the moment.

You are not alone. Thank you very much.

And, Joe, the other point that is obvious is October last year was up 25% or 30% in every segment. So the comp is also very difficult.

And we are all a little low. And they are rising in Hong Kong. I mean, really, and the government says no more smoking here and there, and so many of our customers are smokers. There's just too many moving parts for an intelligent response, I think.

Thank you very much.

I think you are in the same spot with your clientele as we are with ourselves.

Carlo Santarelli, Deutsche Bank.

Just to turn over to Cotai a little bit and the development there. And obviously, it looks like maybe there's an incremental $100 million of spend associated with it. And I didn't see a lot of color on Phase 2. Could you guys kind of walk through how you are thinking about that project today, maybe with the increasing $100 million is, as well as how you are thinking about Phase 2?

Well, certain changes had to be made in order to accommodate Phase 2. We didn't want to get ahead of ourselves too far with regard to that until the government had responded and given us the appropriate kind of permission. But some of it has crept into our Wynn Palace budget.

But basically, our budgets are within 1% of what we had expected. And I'm very happy with the planning that went into that job, and the attention that is being given to Gamal and his team and Mike Harvey and everybody in supervising that construction. The government has been cooperating and it is moving very nicely with the latent construction folks who built our other buildings.

If I am not being responsive, maybe you could redirect your question.

No, I think that was it. And more or less, I am assuming then, based on your answer, maybe that $100 million is for some piling and foundation work that would be associated with Phase 2?

Yes, Carlo, it's Matt Maddox. So, half of it was actually forecasted preopening expense, which report and other companies do not because of the incremental payroll and other Human Resource programs that have been going on. And it is not $100 million, it is just rounding. So it's much less than $100 million.

The second (multiple speakers) --

I think it's $60 million.

That's right. It's $56 million. The second thing is, we protected all of our contingency in our construction budget. So we are going to be able to utilize that going forward, if there are any other issues. And our current GMP is at 85% bought out or let. So we are feeling good on the construction side.

Great. That's helpful. And then, if I could, just a follow-up. Obviously, Steve, as you noted earlier and I think we've talked about on prior calls, that the mass hold percentage at 51% in Macau today. Other than reading into it that your premium mass business obviously is becoming a much bigger component of your overall mass, is there anything that you could say around that premium mass business that you guys have started doing differently to grow that business? Or are you kind of -- because it appears as though you are meaningfully bucking the trend of the market, especially in the premium mass.

Here is one of the things that we did. I guess in business and life you have to be lucky, even better than smart. We made a decision in the building of the Palace which was a very important decision. If you are having a lake of 8 acres, like Bellagio, in front of the hotel, with all kinds of new advanced water attractions, including a Doppelmayr gondola that goes through the fountains and into the hotel, you say, okay, what are we going to do with the lakeside property, which rings 180 degrees of this lake? Are you going to do stores? Are you going to do lobbies, restaurants or what?

Well, we made a decision, Mr. Butler and I -- D. Butler, my design partner and I, several years ago -- and I mean we inhaled and said, okay, we are going to put all of our premium VIP business of every description on the water, every one of which, every chamber, every room from one end of the building to the other, will be on the water looking at the fountains and the water show. And every one of them will have bathrooms, food, and smoking balconies. And our entire hotel has got balconies all around the lake on all of the VIP and mass rooms.

This is going to turn out to be a windfall kind of event. Because folks are going to be able to gamble and step outside 8 or 10 feet, look at the water; and if they have got a yen to continue to smoke, they will be able to do so outside.

We are very advantaged by the basic plan of the Palace, which puts all of the important gambling with terraces -- all of it. It is quite -- it turns out to be quite fortuitous. And I must say I wish I could take credit for having thought of it in advance, but it just worked out right. We didn't expect that the government would act as aggressively and dynamically as they have on the smoking issue. But having done so, we find ourselves in a position that we have accommodated it in our new hotel.

Got it. Thank you.

Shaun Kelley, Bank of America Merrill Lynch.

We've spent a lot of time talking about the mass business, so I figured I would switch gears and just ask about VIP. Could you just give us your kind of latest thoughts on what you are hearing from some of your junket partners? There is obviously always discussion in the market about this, but just maybe an update on credit settlement, and your kind of general view on maybe when some of those higher-end VIPs start to take a little bit more risk and step back into the market?

Don't know. What we are giving them is sympathy. We -- what can we say to them? I mean they have to take the business the way they find it and assess their own risk. Our policy is rather -- we've got a short string on all this stuff. And they have respected that. Maybe some of the competitors have lengthened the string; we haven't had to do that.

Maybe I can ask you this way. Just any sense -- obviously, I think everyone -- both the junkets, the casinos, lending -- everyone has probably taken a step back, and to wait and see -- do you think things are getting worse at this moment, Steve? Or do you think it is fairly like things are starting to settle down, and now everybody is just in a wait-and-see mode?

Well, that is an easy question. It is worse in October than it was before October. So, if you are asking what is the nadir of our experience, it is current.

Okay. That is very helpful. And then the other question I have was just if you could give us a quick kind of review of your latest thoughts on the West Casino zone renovation? Because you did mention, I think, in some of your remarks that you got some interesting features there that might help out when that opens for -- I believe in January.

It is going to open in January. And we are getting ready to install wallcovering and stuff like that. The walls are up. It is on schedule. It was a very, very complicated construction job because we had to replumb and do things in the floor and other things like that.

It's a very dynamic -- it's probably the fanciest high-limit gambling place that we could use in our experience for any customer, whether it is our own customer or a junket operator. And by being able to have these -- this whole fabulous inn for them, it frees up some of the rest of the place for us to use in other ways.

It also allowed us, in terms of the general flow of the casino, to compress -- to offer the -- to put these junket and these high-limit gambling areas right next to MGM, and have access from the outside for pedestrians directly into the space without having to navigate the whole floor of the building. And you know, these buildings are rather large. That -- it is a big convenience issue.

And it also allowed us to compress and to improve the general flow of Wynn Macau, so that it would support and enhance the usage of the mass tables. The whole project, which was well-considered, long-considered before the team in Macau, before Ian and Linda and everybody finally signed off on it, we had many iterations to try and catch up with all of the things we wish we had done when we built the place in the first place.

You know, every one of these resorts, no matter how carefully considered, take on a life of their own after they open. And then you find yourself saying, wow, I didn't know that the people would go there instead of here. I didn't know that that would work the way it is working. And then you say, well, how can we adjust?

Some of it is really hard to get to. You wish that you could make a change that is clearly beneficial, but it involves interruption of business and some basic reconfiguration. Well, we decided to take that step, after several years of operation, in view of the fact that we are going to compete with ourselves at Wynn Palace. We wanted to make sure that Wynn Las Vegas held its position as a premier stop for all of the top players.

And the things that we have done in the past 18 months to reconfigure the Wynn Casino, I think -- we all believe. at least -- do exactly that. And, so, we can't wait to see the impact, which will show up in the first quarter. I'm hoping we'll be able to talk about that with you in April.

Thank you very much.

Harry Curtis, Nomura.

Question going back to the Palace. On the last call, Steve, you talked about taking delivery in -- I think it was December of 2015, when you commented it's still on time. Is it -- do you still expect December 2015 delivery?

Yes. We began to get the spaces turned over to us for stocking the kitchens and cleaning, preparing all the rooms; housekeeping is on the job. And then we turned the place, in late December and in January, into a campus. And it is our practice to first take the staff and give them the building for themselves for a couple of weeks to practice in, which we break all the systems, we go to all our backups. We have all of our employees stay in the rooms.

We test everything over and over again, because we have a very strong opinion that you only have one chance at a Grand Opening to make that wonderful initial impression. And considering that we are going against such wonderful competition at Galaxy and City of Dreams and the Sands Company, with all the products that Sheldon and Packer and Lawrence Ho and Francis Louis have done, we want to make sure that when we open the Palace that everybody is impressed.

So we are going to have rehearsals. And that campus that I referred to, the training facility, we hope will take place in January when we've had a chance to move in and get the drawers filled with pencils and papers, and the linen put away, the carpets vacuumed; the freezer boxes and walk-in coolers stocked, and we start cooking in the kitchens. And all the chefs tell us that we did a lousy job designing the kitchens, as they always do. (laughter)

We also have adopted a policy of entertainment. We know that in Macau, people gamble and shop and eat. And what we said was, in that case, let's take the entertainment aspect of the hotel into the restaurants, where they can -- where they'll surely be enjoyed. So we have done things we have never done before in restaurants.

One particular restaurant is a continuous series of entertainment vignettes. Walls open and it is a stage. And some very fanciful and unique things take place. In other restaurants, other things of that sort. Every one of our restaurants has an entertainment quotient to it.

We have decentralized entertainment in each of the restaurants, and of course, in the front yard. And in other places in the hotel, the lobbies, the entrances, are all animated -- animated, expensive entertainment attractions. We are spending hundreds of millions of dollars on entertainment in this facility so that, literally, the hotel itself is the show.

Steve, just as a quick follow-up, in the last quarter, you made a prediction on a number of tables that you thought you would be getting. And there's a lot of debate around that, and it is probably fairly opaque. But can you give us an update on your level of confidence that you can still get over 550 tables?

Well, the only reason I said that is because I discussed it with the government, and I was given permission for it. But, again, in China, the final proof is in the -- in what happens when you open. And the government has full control of those sorts of things. I don't have any reason to believe that we would be allowed to build a building that was very carefully reviewed and examined by the government, and then be surprised. I suppose it is possible, but I don't have any history in Macau that would suggest that that's probable.

I know that our competitors all have, and offer freely, their opinion of what is going to happen to us, but competitors have always done that. Remember that two weeks before we opened the Mirage, an unnamed competitor -- as Forbes magazine said to me, an unnamed insider -- gaming insiders have said that you can't make it, that your overhead is too high and that the Mirage is going to go broke.

Our competitors always seem to have a very confident view of what is going to happen to us. I don't much pay attention to that. I do pay attention to what the government says to us. And of course I pay attention to our own history there. And the government has been very steadfast in the way they have handled their relationships with us. They've told us what they expect. They've taken their time to approve what we have suggested we want to build. They have examined our programs carefully, made suggestions. And then, when appropriate, they've given us the green light to go ahead and build these places.

You know, that is the frame of mind I am in. Maybe I am a Pollyanna, but I think that I am taking the only practical approach.

That does it for me, Steve. Thanks.

Sure.

Thomas Allen, Morgan Stanley.

On Macau mass market margins, you talked about the risks to margins as revenue slows. I think we all know about labor and operating cost inflation. But in terms of promotional spending on the VIP side, you have always been able to keep your commission steady when we have seen increases in market. Do you think you can do the same on the mass market side with promotions as the premium mass customers? Thanks.

What happens in our business is that, at the end of the day, the critical decision of where to gamble is made by the customer. Hotel operators and hosts, and marketing people, whatever their particular titles may be, they service those customers. So, when you are in our position, when you are on our side of this discussion, it's the product that you put out that determines the strength of your competitive posture.

The reason that the observation you made is accurate is because the product that we produced was always a little bit better, and the service a little bit better, at least in the eyes of the customers, than what they could find elsewhere. When we took up the idea of building a hotel in Cotai, we recognized the quality of the competition. And that sharpened our senses and made us even more self-critical than we have ever been before.

So that we came to the conclusion that we had to re-examine every part of the hotel, and everything that we were going to say to the clientele in terms of service, food and beverage, entertainment, and, of course, user-friendliness in the gaming areas of the building, with a firm belief, based upon our own history that, in the end, that would give us whatever leverage was available under the circumstances.

If you were to change places with us, I am sure that you would come to the same conclusion. Now every time that you operate on any premise, reality sets in and the facts expose themselves over a period of time. I have told you how careful we were at Wynn Palace and the great respect that we had for our neighbors. And we acted accordingly in conceiving of the hotel. It is the best job we have done, I think, in my career.

I am operating with a group of the most talented, most experienced people that have ever worked in the gaming industry -- from Gamal Aziz, Linda Chen, and the staff of people that work for them in marketing, to Ian Coughlan's experience in the hospitality industry and the experience he has gained over the years as a gaming president -- all of this has come to bear. And every one of these people have really focused hard on everything that we are doing.

In the long run, it will be the Human Resources of the leadership of this Company and the staff that determine the outcome. And I go to bed every night with a firm conviction of that truth -- and no other. And then, I leave the guesswork to other people.

I don't know if I'm being helpful to you. All I can do is share with you the mentality of our management. And for investors, that is, of course, at the end of the conversation, the only thing that matters.

That's helpful. So, just I mean, slightly shorter-term, though, if we do see some kind of promotional spending more in the near-term, do you think that you have to compete there? Or do you think that the quality of your product before Palace opens is strong enough that you wouldn't really have to get into that game?

We could do all of the things I just mentioned, but at the end of the day, we have to deal with the situation as we find it. And each company tends to give away, in terms of promotional allowances to its customers, about as much as they can without being self-destructive. That number is subject to change from time to time.

Incidentally, it is subject to change down as well as up. Sometimes people overspend in promotional allowances and it becomes an exercise in futility -- in which case you back off; or the executives gets changed and somebody new comes in to run the place. One of the two things happens.

If you find yourself in an advantageous position, and you think that by increasing promotional allowances you can have more money to the bottom line, even if it means the margin percentage is less, well, then you go for that. I know that my friend Sheldon Adelson has that kind of mentality with his business.

And so, margin percentage matters, but what about the money? At the end of the day, that is the only thing that matters is -- you'll excuse the cliche, at the end of the day; everybody says that. But in the final analysis, it's the money, isn't it? And you've got to take the market month by month, I think.

Thank you. And just two quick follow-ups on Vegas. One, you report really strong RevPAR growth of around -- up 8% this quarter. Can you talk about forward bookings a little bit? There's obviously the really hard comp in 1Q with ConAg. Do things look like they are just getting kind of building strength going from strength to strength? Or could things slow a little bit?

Well, last month, I raised the rates by 18% of our hotels in Las Vegas to online booking agents and to everybody else. And we benefited from it. That is why our RevPAR is up. That is one of the fun things you get to do when you have got a better mousetrap. I think that is probably a poor choice of words for that facility. These places are hardly mousetraps at $5 billion [rough what] they cost.

And, Steve, the Vegas property EBITDA peaked last cycle around $420 million. You have 75% more rooms today. Could you see that kind of increase in terms of EBITDA does kind of this cycle? (multiple speakers) And then I'm done, I promise.

We have passed $420 million already.

$486 million last year.

Pardon me?

$486 million last year.

We did $486 million last year. And we've got $520 million for the last -- for the 12 -- of recent 12 months, $526 million, I think. And I am hoping that the fourth quarter will get us over $500 million for this calendar year. It will be a countdown sort of thing in December. Because all the money comes at the end.

But seems okay. But, again, we are an international place, and we get a lot of Chinese and Latin business. And things going on in the world affect us a lot in our place. But we will have the most profitable hotel in Las Vegas without a doubt. There will be no question about that.

Conde Nast Travel made us the leading hotel last week in Las Vegas again, based upon visitor voting, which was satisfying to us to get that distinction. And so I'm happy about that. You take care of your building, you keep working with your employees to make them more effective, more self-conscious, more aware of their personal responsibility in the building, and in the long run, it's a slow -- you know, it's the hare and the turtle. It really is a marathon, not a sprint. And we are enjoying the benefits of our -- of being steadfast here.

Great. Thank you.

Sure.

And your last question comes from the line of Robin Farley with UBS.

Two questions. One is, can you talk a little bit about your own experience with collections to the degree that where you do have direct VIP business? I know others have asked about junket collections. But I wonder if you could talk a little bit about your experience with that on the direct VIP?

And then unrelated to Macau, can you just share any thoughts on your interest in Japan potentially, if Japan doesn't allow resorts to be open to locals, how that would affect your interests? Thanks.

I will take the last part and I will let Matt do the first part, Robin. I don't know what is going to happen in Japan. I think speculating on Japan at this moment is really, really, from our point of view, not productive. The situation there is undefined -- by any measure of close scrutiny, undefined. I do feel that any interest in broadening the ability for people to gamble in Japan is based upon employment, increasing tourism, and that sort of thing.

And I think that the Japanese government is well enough informed they could understand a foreigner-owner -- a foreigner's only casino would not get that job done for them. I am pretty confident that they would come to that conclusion. And I think they want to keep the money at home, if they do this at all. So I don't think it is going to turn out that way -- if it turns out at all.

I think probably the more important question is are they going to do it at all, Robin. And I don't think -- and I think that's undefined at the moment.

With regard to our collections, I will turn that over to Matthew.

So, Robin, in the third quarter in our direct program, turnover was relatively flat with last year. The decline of VIP was largely in the junket area. And our collections, in our individual program, have been very steady. We haven't seen a slowdown in that, because we remain cautious in who we issue the credit to, and we know our customers well.

Okay, great. Thank you.

Are there any other questions?

There are no further questions today. Are there any closing remarks?

Matt? Gamal, do you have any -- Gamal, you were quiet on this call. Do you have any comments?

Just that we are on track, Steve, and we are feeling pretty good and very confident about the opening dates, about the interest in employment for our property. We are getting early signs of tremendous balance, wanting to be part of Wynn Palace in the future. So, we feel pretty good and very confident about Wynn Palace at this point.

Linda, do you want to make any projections? Or give everybody who is so curious about the junket operators, you are the closest one in the family to all of that. You want to go out on a limb and make any predictions? Or do you want to stay safe?

I don't want to make any predictions, but I think it is no secret to anyone that the junkets are being cautious and they are being conservative. So no different than the retail sensitivity for not spending lavishly during a market time like this. (multiple speakers)

Yes, you don't --

So, on the (multiple speakers) -- go ahead.

Yes. Louis Vuitton, Christian Dior, and folks like that, and Cartier and Chanel are noticing all through China the same thing that we are talking about today.

Yes, but I think they are being very responsive, being concertive. And they're also taking this slow time to, if you may, reorganize. So, the mode of the market was to expand and expand unlimited. Now they are actually consolidating. So no different than any other major industry that when they face a financial difference in banking, whatever. So now the time is for them to be re-looking at their future, which I actually think is a very positive outlook, if they are being responsible about it.

Well, there are the best thoughts of all of us to the folks on the call. Our competitors, of course, are listening; to all of them, I say hi and wish them well. And we'll speak to you again in three months or so. Bye bye, everybody.

Thank you for your participation in today's conference call. You may now disconnect your lines.