Q3 2019 Earnings Call
Welcome to the Wynn resorts third quarter 2018 earnings call. All participants are on a listen only mode until the question answer session of today's conference to ask a question Press Star one on your Touchtone phone record your name and I will introduce you. This call is being recorded if you have any objections you may disconnect at this time.
I'll now turn the line over to Craig Billings, Chief Financial Officer, Sir you may begin.
Thank you operator, and good afternoon, everyone with me today in Las Vegas, or mathematics, and Maryland Spiegel.
So I am line or even Cohen, Shiran Carruthers, Frederic Lubricity and Bryan Goldberg.
I want to remind you that we may make forward looking statements under safe Harbor Federal Securities laws and those statements may or may not come true I will now turn the call over to Max.
Good afternoon, everyone and thank you for joining us today for our third quarter conference call.
I'd like to get started talking about Macau.
In the third quarter in Macau, we generated $301 million of EBITDA.
However, we had hold impacts from our direct business of approximately $22 million, we held negative one point, we hope negative 1% at Wynn Palace in our direct program and 1.2% in our direct program at Wynn Macau the way the direct programs restructuring you pay commission on turnover not on win.
Yes, so in yet abnormally low hold that revenue mix significantly impacts EBITDA and that was a 22 million dollar impact in Macau.
I'd be continue to compress and we did see some customer trial out at Cotai, which are the newer product info city of dreams, and MGM, but I believe and we all believe that that is quite temporary.
Mass continued to grow we maintained our share in mass marketing slots at 14%.
And I'm pleased to say that while the VIP trends and the mass trends continued into October we generated over $4 million a day of EBITDA. During the month of October driven largely by an 8% growth in our mass drop during that month.
Moving onto Las Vegas, we've continued to see the positive momentum that we experienced in the first quarter. We had a 13 million dollar impact in hold in our baccarat business in Las Vegas, but if you take a look at the strategy and the way that we made the pivot to focus on taking market share in the domestic business casino busy.
Yes, and then slots it is working in Maryland in the team are doing a great job.
We had 9% growth in our domestic table games drop and as well as 9% growth in slot handle during the quarter.
Our hotel revenues grew by 5% during the quarter and retail is continuing to really gained traction as it was up over double digits in revenue growth during the quarter.
The Las Vegas strategy is working and we're really excited about 2020.
Moving on to Boston at Encore, Boston Harbor, first I'd like to congratulate Brian goal brats.
As the new property president he's been with us for over a decade and I know when we all know that he is the exact right person to lead that project.
We've been open for 136 days in Boston, and we're learning each and every day how to become more local.
We've been tweaking, our food and beverage product to make sure we're giving the customers what they want.
We've been working on our messaging and we now have new messaging out to the market.
We are going to the first time and our company's history.
In North America launch loyalty card tiered card program and that will be launching in Boston in the first quarter and I'm sure as all of you that are very familiar with our business no at tier card program is essential and a regional marketing in a regional property.
Our table games business in Boston, and our hotel business has actually been quite encouraging.
And we always knew the slots would take time to Rand.
If you think about it when we opened their doors in our local database, we had zero customers.
Yes forward 136 days, we have 250000 people in our database, which is significant growth.
In order to compete in high frequency market, where people are coming multiple times a month.
A robust databases necessary because you need to message to the customers. What is your doing each week and why they need to come into the property.
We are on the path to growth there and I think that we have the right team in place.
So that's really the rep on the third quarter, but what I'm excited about.
His 2020 and the reason is we began a transition with this company in 2018.
We reallocated capital to Macau, we thought about Las Vegas differently.
We focused on opening Encore Boston Harbor.
And if you look at where we are today I was in Macau two weeks ago walking Wynn Macau, our new property downtown with Ian Incuron, who runs the property and Linda.
Looking at what's about to open in 60 days.
We've taken everything that we know about compression of energy in space, and what works and food and beverage and new hotel rooms.
And we've invested in Wynn Macau to make what we think will be the best premium mass product on the peninsula.
And it will continue to gain share.
We have 7000 square feet of new retail there will be opening two new restaurants, the new casino and fully remodeled encore tower.
All of that opens.
End of this year and in early 2020.
Well positioned Wynn Macau as a market share taker in the very near future.
Wynn Palace remains as the high quality environment that is really going to continue to BD aspiration of property. It cotai.
So it's not just our product that I'm excited about when when I was there and we were talking not just internally, but to our peers.
In the market people are quite sanguine about Macau in 2020, there's a new government it's coming in that people are very excited about in December .
A lot of the infrastructure projects that have been talked about underway for years and years and years intention island are starting to complete.
Visitation in Macau has been up double digits for the last three quarters.
So 2020 feels like Macau is well positioned for growth and that we are well positioned to capture our share of that growth.
If you look at Las Vegas.
We actually have more products coming online in 2020, then we have since we opened encore in 2008.
We have a 430000 square foot Convention center Thats opening in 90 days.
This convention center is on our golf course, and has a 390 foot prominent with two storey glass walls overlooking the golf course, leading to an 83000 square foot ballroom, that's almost two acres.
And when we walk when we walk event planners into that space their jobs drop and they ask where do we sign.
That will be opening in 90 days on top of that we have three new restaurants that we'll be opening in 2020, creating an entirely different segment of social dining at Wynn Las Vegas, and we're very excited about where we are positioned and how we're positioned against our competitors for 2000.
20.
And if you think about Boston, where at the beginning of the ramp we're not at the end so each quarter, we going to be tweaking, our marketing, we're going to be focusing on growing our database working on controlling expenses and growing revenues and EBITDA each quarter.
So I'm very excited about the transition that we've been through in the future of this company.
As we move forward into 2020 with that I'm going to turn it over to Craig.
Thank you Matt.
As noted in our release on Macau operations delivered adjusted EBITDA of 301.2 million on 1.1 billion of operating revenues.
Quarter was characterized by strength in both main floor formats and premium mass with combined property when in the mass segment up 7% year over year. Our results in Macau were negatively impacted by a low direct VIP hold percentage as Matt mentioned, which decreased EBITDA by approximately $22 million from a normalized level with the hold impact weighted slightly more heavy.
The palace at 13 million.
Also you'll recall that we received $11 million of insurance proceeds in the prior year quarter impacting the year over year EBITDA compares.
The team in Macau did a great job in the quarter of controlling costs at both properties without negatively impacting the guest experience at Wynn Palace, our operating expenses, excluding taxes were flat year over year and down sequentially, which helped drive a 200 basis point increase in normalized EBITDA margin compared to Twoq despite topline.
Sure.
At Wynn Macau, Opex increased slightly year over year and was down sequentially. Despite some incremental payroll expenses, we begin to step up for the west casino opening.
We're well prepared to drive strong operating leverage from the top line environment improves.
Las Vegas operations produced adjusted property EBITDA of 88 million in the third quarter operating revenue of 399.5 million with year over year growth in both bakara and not non baccarat table drop and slot handle.
On the hotel side Revpar increased approximately 8% year over year to $269 driving 116.1 million of hotel revenue.
We held low in Las Vegas, which negatively impacted EBITDA by approximately 13 million.
Bad debt expense in Las Vegas was 4.5 million compared to 500000 in the prior year quarter costing US 4 million in comparable EBITDA.
We spent just under 60 million in project costs on the groups based expansion at Wynn Las Vegas, taking our spend to date to 302.7 million.
This expansion is slated to open in the first quarter of 2020.
We ended the quarter with total debt of 9.54 billion and total cash and investments of 1.68 billion, including approximately 947 million at Wynn Macau.
During the quarter, we returned over 100 million to shareholders through our quarterly dividend payment. We will continue to look closely at our capital allocation alternatives, including periodic increases to our dividends and opportunistic share repurchases.
Finally during the quarter, we completed a refinancing of our us capital structure, which extended our maturities streamlined our us restricted group and simplified our collateral package for the use some corporate entities. We believe the simplification of our us capital structure will make it easier to understand and ultimately lower our cost of debt capital over time.
With that we will now turn it over to questions.
Thank you to ask a question press star one on your Touchtone phone on mute your phone and record your name clearly after the prompt I will introduce you for your question.
Withdraw your question you May press Star to our first question comes from Carlos Andreani.
Sir Your line is open hey, guys. Thank you and good afternoon.
That you talked a little bit about the low direct told in the period, obviously hearing a negative number is pretty startling just in terms of of.
I don't know that you guys are going to answer this but just in terms of the mix of direct relative to your junket business at the combined assets in Macau right now.
You guys have kind of a ballpark that you could provide us to as do the mix of direct right now and on a rolling chip volume basis.
Carla we usually don't get into the mix between direct and our junket business.
And so I'd, rather not get into those specifics right now I do think that our direct will likely have more growth potential in particular Wynn palace going forward as we're seeing some of this.
Smaller junket operators consolidate into the top three so our direct business is really on a customer by customer basis with our program run by Linda Chen and and I think that as we continue to ramp that piece out that I feel pretty good about where the direct business is going.
Understood and then maybe just bigger picture in terms of what you're seeing in Macau on the VIP side, obviously, where we were still facing some comparisons that were a little bit challenging in terms of role in the market et cetera.
With the performance in the quarter and obviously, what you've seen over the the holiday period in October .
Are you starting to see any kind of stabilization in the business, maybe on a quarterly sequential basis in VIP across the market.
Well I think that you've seen that commentary in the market that their feels like there's some stabilization.
I think it a lot of people are very optimistic that the that we're at a stabilization point in that 2020.
You know could be a period, where we're starting to see some growth.
Carlo in the past we've spoken about just to go back to your question direct versus junkets and its range from 80 20 down to 90 10 between.
Junket and direct and it really is very quite volatile during the.
From quarter to quarter, but we think that both our direct business has growth opportunity in 2020 and that the junket business hopefully we'll continue to stabilize.
Great. Thank you that's helpful. And then just if I could one follow up on on Boston Harbor and the ramp there.
When you think about kind of the obviously driving that slot business and kind of building that database. The other side of the equation is obviously to cost side and if I kind of just adjust for gaming taxes in the period. Knowing this is very simplistic include way of doing it you kind of rivals.
1.45 million, a day or so to run the property I assume.
You're not going to be willing in the near term to sacrifice the experience all that much but but over time.
You think about the ability to take costs out of the building with some of the changes the ultimately make.
Do you see there being plenty of cushion in there to do so as we look out to 20 and beyond.
I don't want to say, there's plenty of cushion, but clearly when you open up property you have more staff and you end up meeting when you're operating at a very efficient way.
Also as well as how you procure items you just get smarter and so I would think that the 1.4 million will definitely be have a downward trajectory through 2020, Greg do you have any thoughts on that I want to I would agree with that that's that's likely to be peak for the near term.
Great. Thank you guys.
Thank you next we have Joe Greff from Jpmorgan, Sir Your line is open.
Hello, everybody Craig could you give us hold adjusted EBITDA margins at the two properties in Macau into Threeq you.
Sure Jeff.
It was 30.4%.
And when palettes was 29.2%, which is about 200 basis points higher than Q2.
Got it and.
Was there any renovation disruption that at Wynn Macau from the West Casino construction and is that part of maybe the hold adjusted EBITDA and then that's growth acceleration in October relative to the three Q.
I think theres definitely.
Disruption from the renovation again, just walking the property two weeks ago, it's hard to quantify because you are we're not seeing large drops and volumes coming in the door, but about half the building is behind.
Construction walls.
Im level, so theres definitely some disruption and I think we're just going to see what the impact is going to be when we opened our new facility and about 60 days.
It's really targeted for the premium mass customer and Joe. If you you know the property well the new gaming floor feels very similar to encore in Macau, but its anchored by two restaurants and has to entrances to the boardwalk that go between MGM win and SJM, which is very heavily trafficked and before Ed.
Entrances, so we feel really confident that the way we've repositioned this property away from smaller mid tier junket operators and to the premium mass market is going to work.
Great. That's helpful. And then as you kind of look at the growth in mass.
In October .
At 8% year over year growth that drove that 4 million of EBITDA per day.
How much of that is share gain versus market dynamics and just relative growth rates.
Mass and then my final question skipping over to Las Vegas. It can you remind us what some of the specific strategies.
In going after some of the domestic.
Gaming segments.
Versus where the focus was here to four and that's all from me. Thank you.
Sure. So again, the our drop was up 8% in Macau on the mass side.
Don't necessarily think that share gain I think thats were continuing to keep pace with the market at about a 14% market share between mass and slots in do you have any additional thoughts on that.
It's really just the daily hand to hand combat and all of the initiatives that we put in place over the last two years.
We continue to aggressively drive our sign up over loyalty program and that was up 48% in the third quarter versus the third quarter last year Wynn Macau in particular has driven that out very heavily through the construction disruption we focus very much in our players we've increased.
The number of holes on the floor and we're hiring up now for the new 44 tables that we're introducing a wynn Macau also at Wynn Palace, we've introduced a new set of 20 tables, Joe Stauffer high limit at table games area, which will also be very fruitful for us we moved around some slot machines. So in both properties and continue to.
Change the floor and react to the customer base.
Nevertheless, Maryland talk a little bit about the strategy in Las Vegas sure. So the really it's a three part strategy first off with people installing the right people in casino marketing.
Secondly, making sure the marketing was correct and adding the technology that we needed to really market to those guests effectively both our current gets to reactivate and bring in new gas and third was using the amenities that we have so we were able to leverage our rooms to really grow decay domestic business.
Great. Thanks, guys.
Thank you next we have Felicia Hendrix from Barclays. Your line is open.
Hi, Thank you very much Maryland, when we have you. While we have you I may have missed this but in the prepared remarks, Matt or Maryland can answer. This did you guys talk about in Vegas, how much your.
Baccarat business.
Either up or down or how that performed in the quarter and Vegas.
Well it baccarat drop was up for us in the quarter, we played very unlucky and Thats really.
The issue that we had we had more players too.
Sure.
Big players and beat us year over year and.
So that that was what happened in backdrop, but we still see them coming.
And believe that where the property of choice for them.
Yes. Thank you for that because that's actually where my question is coming to you know as we're at the end of earning season and various companies had made various comments about the high end background player in Las Vegas, and some have said not to expect them to kind of come back others have done better. So it seems like you're kind of on the end of the spectrum that you're still.
Kind of operating business as usual in that part.
We actually believe it's a cyclical issue in baccarat, it's not a structural issue and we think that they will continue to come.
I agree I mean, if for people to try to predict the travel patterns of.
1.4 billion people in China, and many billions of people in the Asia did not come to the world's entertainment capital in Las Vegas, I think thats, a mistake over a 10 year period.
Las Vegas is going to continue to reinvent itself, we're continuing to invest and it is a place where people like to go and so I agree with Maryland. It's temporary this is not the this is not a change in customer behavior.
Thank you. That's that's helpful and then and Matt maybe you could talk about Japan for a moment in the quarter you made an announcement that changes strategy there.
Maybe you could help us walk us through that and how you're looking at Japan now.
Sure. So we've been working on Japan quietly behind the scenes for almost a decade now.
We have spent 85% to 90% of our time and the Tokyo Bay area.
Talking to vary over the last 10 years. So we didnt necessarily changed strategy I think we just publicly said that we would not be pursuing Osaka.
Which is something that.
Was was it something we're going to announce eventually.
And we believe that there will be opportunity in the Tokyo Bay area. We are working with various consortium partners now and we're doing things quietly and behind the scenes I spend I go over there about one week out of every couple of months where people on the ground. We're building up our team I still believe this is going to be.
Longer process than a lot of people are anticipating and we're going to make sure that if there is something thats right for when that is financially sound that the project is something that will change the company and we're with partners that share our same values.
And how are you thinking about returns there.
Given the potential high cost.
Okay and that was my point Felicia, Yeah, we are going to pursue Japan with bigger, but we will not pursue it if it does not make financial sense. So we're going to be very disciplined in terms of how any structure is put together what the cost are going to be and what return profile is going to be.
So we like the Japanese market, we think that it will be a very high revenue market, but were focused on making sure that it will be something that our shareholders will also like okay. Thank you much appreciated.
Thank you. Our next question is from Shaun Kelley of Bank of America. Your line is open.
Hi, good afternoon, everyone.
I'm wondering if you could talk a little bit more about on how you're thinking about supply growth and macallan into 2020 on yeah, I think Matt and prepared remarks, you mentioned a little bit about.
Some customer trial for new product. This year, there's obviously, some new stuff up in your neighborhood, but probably more like in the second half of next year, but you also have some infrastructure coming in so maybe just some of the pros cons.
As you're thinking about the longer term outlook there.
Sure I'll I'll give you my thoughts and any and I'd like for you to take it as well the major supply growth outside of as James property has really already happened I think all of us operators now.
Are continuing to refine our projects and build out in the areas, where we think there'll be high returning.
Hi, ROI Galaxy is continuing to build many non gaming amenities and we do have the crystal pavilion that we will be presenting that is an additional 700 plus hotel rooms in phase one and entertainment facility that will unlikely really began in earnest until 2020.
One.
Incomplete 2024, so I think right now Macau has more infrastructure and more visitors coming to the market than it will an increase in supply in do you have any thoughts.
I think we'll start to see the arrival of new product or revised products in the marketplace. After 2020 I think later in 21, we'll see the arrival of SJM, which we believe the crime news flow of palace is going to drive additional business for Wynn Palace in particular, we'll see.
Sands Cotai go through their transformation into those loans that are.
Most of that will take place in 2021, and it will be spread like a lot of the projects happening over the last four years.
With infrastructure were excited about the light rail system, which has been under build for nearly eight years and comes to fruition. Later this year hopefully within the next 10 to 12 weeks and that has a drop off point right outside of our Wynn Palace property. It connects directly to the Colts Ferry terminal in the airport.
And we think that that's going to bring a lot more visitors to this general area of coal side.
Great. Thank you and then.
Just in the you give us an inch we'd take a mile camp.
Hey, just going back to the comments around October .
Obviously, it implies a very nice sequential improvement from what you recognize an EBITDA per the third quarter on you know just for people to not extrapolate too much into that any color you could give around does that include just normalized hold because there is a big bounce back.
Relative to what you actually recognized or did you hold little heavy in that that then help that trend at all or was it golden week or any other seasonality.
You had golden week, which which helps October .
We actually generated more than $4 million, a day, a little more than $4 million a day.
On a normalized basis it was right at $4 million a day for the month of October .
Great. Thank you very much.
Thank you next we have at Thomas Allen that from Morgan Stanley . Your line is open.
Thank you. So just signed this tremendous press release was youre guiding to Boston hold of 16% to 20% on tables and Vegas 20 to 26.
I am guessing a lot of those game mix, but in some of that also do you expect told to kind of ramp as the property.
Does it property ramps thanks.
Hi, Jay Thomas its Greg, Yes, really has to do without markers are handles and the ability to repay markers in the pit in Las Vegas, and not repay markers and fit in Boston is purely has to do with.
With regulatory.
Okay helpful. Thank you and then there isn't that trend on a sports betting partnership this past quarter can you just talked more about your what you're doing that thank you.
Craig I'll take that wasn't sure.
We have a sports betting strategy that is very focused on on high quality products in various selected markets. So.
We are likely to launch a sports betting products early in 2020 in New Jersey, and then move out to selected states and ultimately hopefully deploy that product in Massachusetts, where we think that will be a game changer for encore Boston Harbor.
All very helpful. Thank you.
Thank you next we had Harry Curtis Instinet Your line is open.
Hey, guys. This is Daniel Adam on for Harry.
One question on our end so.
You've got a 22 million dollar direct VIP hold impact in the quarter, but.
If I look at your overall VIP hold of percent.
In Macau it came in at 3% so at the high end of the normalized range. So I guess my question is.
Well you must have held high in your junket business.
What was the positive hold impact in the non direct VIP.
Play in the quarter, Thanks, Rick workload, Hey, it's Craig we're quoting it net.
Oh, Hi, joking.
So we're giving you our normalized EBITDA impact inclusive of that idled.
In July .
Okay got it so the direct impact was even greater than 22 million.
Okay.
Thanks.
Thank you next we have Stephen Grambling from Goldman Sachs. Your line is open.
Thanks for taking the questions. One quick follow up on Las Vegas can you just expand on the puts and takes to think about into 2020, both at the market level and then what you're doing it the property as we think about a the initial read you might be seeing from Con AG, the golf course, or some of the new space. Thanks.
Sure. The golf course opened up first weekend in October it's been great. We.
Often have more demand than we have supply for the number of players coming to the course, so we feel really great about that 2020 of course February is the launch of the Convention Center and we will see.
Good growth in the Convention center, but during the Investor day, you'll recall that we talked about the room remodel and so the room remodel is going to hit in June and it's going to mostly take up that time with leisure.
Rooms, but.
We haven't refreshed our rooms at win for eight years and it is time to do so so that'll be factored into 2020 also but as we think about 2020 convention business being solid.
Business continuing to grow and then we plan on good fight tea.
Business and leisure business that will fill in the gap.
The strategy has been so many of our competitors are not investing in my opinion as they should in our product in their products and so we have a real opportunity to continue to capture market share at the higher end of the business. So we are we will be completely reprogramming the lake of dreams with new shows.
We're re modeling all of our rooms at Wynn Las Vegas, we have a new convention center, we have new restaurants, we're spending the money to create an entirely new fun experience here, while a lot of our competitors are not doing that.
And so we see real opportunity in Las Vegas to capture share the market, maybe growing along with the economy, but we'll be capturing share.
Perhaps that's a good segue to my follow up and I realize you are on a path to deleveraging.
The balance sheet, but could you share any thoughts on how the cap rates implicit interest rate and structure of the Blasio transaction announced impact how you think about financing and are capitalizing the business.
Sure I'll I'll start off with that so.
If you look at where Opcos are trading and and where these deals are occurring it appears to me that the way that our north American assets are valued we're getting full value for our real estate.
And in order to grow in this business yet to continue to invest to capture more market share.
I'm not quite sure right now that this opco propco structure in the Las Vegas market, where you have to heavily invest I'm not sure one plus one equals two if you look at the way the Opcos are trading so we feel very comfortable with the way that we're running our business with owning our real estate and we believe we're getting proper value.
Do you have any thoughts on that yes, I'd just add that obviously being an opco expose you to much greater volatility insensitivity.
Throughout the economic cycles, particularly the tail end of the economic cycle. So theres a whole host of operating consider operating considerations and as Matt mentioned investment considerations that you have to take into account before you access of funding source links that.
It appears to me that they borrowed $4.2 billion at an average rate of 8% over 30 years.
And guaranteed the debt.
I think thats, what that trade was.
So.
Thats, an interesting source of capital, but an expensive one in my opinion.
Fair enough and then should should we be expecting this is one last quick one should we expect any kind of capital investment in Boston as you're thinking about rightsizing some of what what's going on there. Thanks.
The capital investments that we're talking about or Reconfiguring restaurants, we're building out a sports bar that could potentially become a sports book So not large capital investments, we do have 11 acres of land.
Across the street, where many developers have been talking to us about partnerships, where we could have new hotels retail et cetera. So we've been thinking about that more as landlords and partners as opposed to outright developers, but first we're going to ramp Encore Boston Harbor, and then we're going to watch the neighborhood Buildout.
Super helpful. Thanks, So much best of luck.
Thanks.
Thank you next we have David Katz Your line is open.
Hi afternoon, everyone.
Hi, I wanted to just address Las Vegas and specifically.
There's piece of property across the street.
From where you are that.
You know memory serves traded at one time for 37, and a half million acre and obviously, you pay quite a bit less than that.
What are your thoughts about.
What you could or or might do with that.
Given that the Vegas market has you know episodes of hi, trading and we seem to be in one of those.
So we like owning that land is option value, we've invested significant capital in Wynn Las Vegas over the last two years to reap to position this product to take more market share. We are continuing to think about what could work on the 30 336 acres across the street.
But in order to really understand what would work we believe that first we need to see how resorts world opens which is coming in the next 18 months I believe get it feel for the market watch the Raiders stadium come in right now it's expensive to build in Las Vegas.
Great to have more jobs than they have manpower. So what we want to do as watch and see how the Las Vegas market expands with this new product projects coming on board and then we can determine what will make the most sense to increase shareholder value on that 36 acres.
Great and if I could Craig just go back to sort of what how we should be thinking about target leverage at this point and the capital allocation.
Alternatives update and apologies if I missed that at the very beginning I got on just a couple of minutes late.
No problem, David Nothing significant has changed since we had our analyst day.
In July we published free cash flow targets at that analyst day, they're available on our website, we've historically talked about leverage.
Estate leveraging.
The three and a half turn to net debt level, which is actually pretty close to.
Where we are today, we continuously look at the dividend will look at it again early in 2020 and to the extent, we are able to be very opportunistic from share purchase respect share repurchase perspective, we will do that so really sticking to the strategy that we've previously discussed.
Is there an open authorization.
There is.
Okay. Thank you very much.
Thank you next we have Ricardo Chinchilla from Deutsche Bank. Your line is open.
Okay. Thanks for taking the question I was wondering if theres any progress with regards to.
In terms of the lease that you guys are going to do between Convention center, and let's say gas entity.
Yes. Thanks for your question so in connection with the refinancing that we most recently did one of our stated uses of the revolver was to purchase the convention facility from swing resorts and bringing down into the restricted group.
There will then be a lease between and the entity that holds that within the restricted group and Wynn Las Vegas.
We will put that lease in place at the point at which we make purchase which we anticipate to be very early in Q1 2020, we haven't disclosed any terms on that lease, but you should assume it would be it would be market.
Perfect. Thank you and could you please.
Provide us with the Capex number for the quarter.
Sure total Capex was 242.3 million.
Thank you just implied.
Okay.
Thank you next we have Chad Beynon from Macquarie. Your line is open.
Afternoon, Thanks for taking my question.
Regarding the Hong Kong travel disruption that we saw in the third quarter two could you give a sense or could you quantify what this may have meant for.
Your customers to Macau to the grid or Bay area.
And that also has this ended as we entered the fourth quarter, you're still seeing some of this potentially playing into current business fundamentals. Thank you.
It's really hard to quantify because you're seeing visitation in Macau increase I do think that it has impacted our premium business that would be the fly and traffic into Hong Kong. The gets picked up and one of our luxury cars and driven over to win valves are Wynn Macau.
But I think it's been hard for us to actually quantified that impact in do you have any thoughts on the.
There's there's been some residual impact more about people that would traveled through Hong Kong and then come onto Macau, but I don't think it's being market significantly impactful.
With all the other headwinds that are there it's hard to breakout as long as the airports stays in the operations. That's very good feeder for us as you referenced in the premium mass sector.
Great. Thank you.
Then, Maryland, just a follow up on the strong convention commentary that you noted for 2020 or you still confident that.
This can kind of drive a 5% occupancy lift at the property and given that theres been more details coming out over the past couple of quarters on Allegion Air MSG sphere, and just the timing of the cities.
I mentioned expansion could this actually be higher than than a 5% lift given extra demand coming to the city. Thanks wouldn't that be great, but frankly, I think what we said 46%.
Additional occupancy and we see that right now, but again a reminder, that you won't really see the full year impact until 2021 once the rooms come online and the Convention Center is then.
Operational.
Remember that's long that's long booking business, so thats business that tends to book 18 months out and so you really see the convention.
Creased occupancy from the convention space come into its own in 2021.
Thank you very much.
And with that operator that will that will be our last question. So thank you everybody for taking the time to join today, we'll see you next quarter. Thank you.
Thank you all for participating in today's conference you may disconnect your lines and have a great day, our great evening.
Okay.
Oh.