LAS VEGAS (KTNV) — Wynn Resorts is pumping the brakes on remodeling the Encore Tower due to tariffs.
During a company earnings call on Tuesday, CEO Craig Billings said tariff rates are too uncertain to move forward with the project right now.
"While we are staying nimble, the pace of change, at the moment, is just too significant to commit to revised timing on [those capital expense projects]," Billings told investors. "Once we have certainty on sourcing and once we have certainty on what the tariffs will be from the country of origin on those sources, then we'll recommence. We just don't know when that is right now."
The Encore Tower isn't the only project being affected but it is the biggest one.
"The current tariff rates have driven us to delay about $375 million of capex projects," Billings said. "The bulk of it is the Encore Tower remodel. Call that high 200s out of 375 that we talked about. The rest of it is most on the furniture, fixtures, and equipment side."
And as for the timeline on when the project could resume...
"When we re-spec pieces, particularly furniture and fixtures, it's not like we're flipping through a catalogue. We're getting samples created. We're testing those. We're beating those up. We're getting feedback from operations on the finishes. We're getting comments back to the vendor. This is a process that takes a lot of time. To the extent that we re-spec a single piece of furniture, we're delayed by X amount of months. There's nothing we can do about that," Billings said. "Right now, we're selling all the rooms in Encore through the end of this year. And so, if we move out another couple of months, then we'll start selling to the end of Q1."
Billings says the company is also watching tariffs "like a hawk" to see how it affects visitation. However, he adds they haven't seen a huge change so far.
"While we are certainly better insulated than some, given our more resilient, affluent customer base, there's obviously uncertainty out there," Billings said. "International is 9% of Las Vegas room nights, which we can easily, easily backfill. We do see a decrease in international visitation, particularly from Canada and Mexico, as others have mentioned. It doesn't really impact us at all but we can't be naive. There's uncertainty out there and we have to watch this stuff day-to-day."
Tourism and visitation numbers have been on the minds of many as overall visitor numbers to Las Vegas are down nearly 8% compared to last year.
WATCH: Is Las Vegas losing its appeal?
"What we're looking at right now, we think, is just a downturn in business for a period of time," Steve Hill, Chief Executive Officer and President of the Las Vegas Convention and Visitors Authority, told us last month. "It used to be a pretty normal thing. It does not mean that the public should extrapolate that into being COVID-like or Great Recession-like. We do not see that right now. There's no evidence that it'll turn into something like that."
It's something that Caesars Entertainment and MGM Resorts officials agree with. During their most recent earnings calls, the CEOs of both companies stated they don't anticipate the Las Vegas market softening and that they've seen strong demand.
Numbers were down for both companies, which they attributed to a strong first quarter in 2024 due to the Super Bowl. You can read their earnings reports here and here.
The LVCVA plans to increase marketing efforts to address the dip in visitors.
"We're gonna add money to our marketing budget to invest in making sure that Las Vegas is top of mind for everybody out there, make sure that people realize that there are offerings here that they can afford on any budget," Hill said.
WATCH: Las Vegas tourism numbers show slight decline