The Mission and Vision of the Wynn Resort - Research Paper Example

The Wynn Resort The Mission and Vision ments The vision ment of Wynn Resorts is striving to be the leading provider and choice of elite, luxurious casino and resort experiences worldwide. This tangible and visible vision statement is attractive to both investors and customers who are assured of getting the best services from a leading casino and resort provider in the world. The company targets the high-end consumer who is attracted to luxurious hotels. On the other hand, the mission statement is targeting individuals of high net worth by providing a variety of socioeconomic activities in the casino and resort industry. With their resorts in Las Vegas and Macau (People’s Republic of China), Wynn Resorts aim to reach a global customer base. This will enable them to reach and conquer a wide market share, which will tremendously improve their revenues. Wynn Resorts also continually strives to provide and research new and innovative gaming and lodging amenities to its customers. Wynn Resort constantly seeks new ventures and opportunities for expansion in order to advance its brand, and in turn maximize the shareholders wealth. Also, Wynn Resorts seeks to continue to provide the highest quality and unique gaming resort experience to its customers to retain them and attract new customers. It also has a mission of investing in both social and environmental wellbeing of the communities in which it operates (Schwartz p.55) such as Las Vegas and Macau which are its top priority. The resort also encourages employee growth, training, and development in order for them to provide the most luxurious and hospitable conditions possible for its customers. The vision statement is inadequate in its description as it fails to inform the consumers/ customers of how it will offer the most luxurious and elite casino and resort experiences worldwide. The inclusion of the means of offering the best of these services would provide more information to the interested consumers and investors who would want to have a stake in the ownership of the firm by buying shares of the company. The mission statement is quite conclusive and all rounded by focusing on all elements that affect and directly contribute to the profitability of the company. The most effective elements of the vision statement is positioning itself as the leading provider of casino experience and mentioning its target customers (elite). The effective element in the mission statement is its effort towards innovative opportunities to expand its brand and its focus on social and environmental (Schwartz 68) wellbeing of the communities it operates in, and the focus on global customers so as to widen its customer base for improved sales. The shortcoming of the vision statement is the lack of inclusion of all customer levels. Targeting only the elite in the society might have its own shortcomings, as most of them may not prefer casino. The mission statement would be more complete by mentioning the price of the product; for example fair and affordable prices for its products. The specific changes that would be necessary to make the vision statement more effective and complete is to include the means through which the resorts and casino services will be offered. Further, the mission statement should include the price levels that customers expect, for example fair and affordable prices. The Company’s Business, How It Makes Money and Its Performance Wynn resort is a publicly traded company that is based in Paradise, Nevada. It is a developer and operator of high-end hotels and casinos that focus on providing elite and luxurious hotels in the world. The resorts, together with its subsidiaries develop, own and operate destination casinos which are destination centers for high end customers. It operates in two segments, Las Vegas Operations and Macau Operations. The firm operates Wynn Macau and Encore at Wynn Macau resort located in the People’s Republic of China. As at February 13, 2015, the Macau resorts feature had roughly 284,000 square feet of casino space , that offered a 24-hour gaming and a variety of games with a total of625 slot machines and 498 table games. Also, there are sky casinos, private gaming salons and a poker (Brooks et al. 75). Also it owns two luxury hotel towers with a total of 1,008 guest rooms and suites, casual and fine dining in eight restraunts, approximately 57,000 square feet of retail shopping, together with stores and boutiques; approximately 31,000 square feet of space for lounges and meeting facilities; recreation and leisure facilities, plus two health clubs, spas, a salon, and a pool; and the Rotunda show. Also, the firm operates and owns Wynn Las Vegas resort which has 4,748 hotel rooms, suites and villas. Moreover, it has about 1,849 slot machines, 232 table games, a race and sports book and a poker room. All these amenities are contained in 186,000 square feet of space. To add to this, Wyn resorts owns and manages 34 outlets selling beverages and foods, lounges, 2 spas and salons and shopping retail space of about 99,000 square feet. Wyn Resorts’ Las Vegas outlet has three nightclubs and a beach club, a Ferrari and Maserati automobile dealership, wedding chapels. Accompanying these is an 18-hole golf course, 290,000 square feet of meeting space and convention space, a theatre, and two showrooms, as well as a water-based theatrical production and entertainment production (Wynn & Stephanopoulos 77). The above listed assets and equipment is what constitutes the business of the Wynn Resorts limited. The operations of all these assets generate revenue for the Resort. Wynn Resorts earns its revenues through casinos, hotels, food and beverages, and entertainment and retail operations The product sold out in the casinos such liquor generates huge revenue amount for the company. The renting out of the meeting and wedding rooms is great source of revenue for the resort as it mainly targets the high-end consumers (Wynn & Stephanopoulos 81). The revenue generated per event is substantial to the firm. The company is making efforts to increase advertising in order to make their brand more visible to consumers and enhance brand recognition, which will offer it a competitive advantage and lead to increased sales and eventually revenues will improve leading to increased profitability. The revenue generated from increased sales will also be put into use by investing in positive net present value and used to pay interest to bondholders that have accorded credit to Wynn Resort. When the resort is able to brand and advertise its products, mostly the luxurious rooms it operates, the occupancy rates will go up. As customers plan their vacations, and the Wynn name is on their minds, chances are that the hotel and casino will be in their mind and end up booking it. This will combat Wynn’s current problem of managing their properties so that both Wynn Las Vegas and Encore have customers. Wynn has the advantage of setting and making themselves unique in the luxury category, through providing high-end shopping, dining, and also on-site Ferrari and Maserati dealership of these cars. Though Wynn’s occupancy has been affected by the declining economy growth and performance, the luxury goods it offers tend to have a fairly constant consumer base, simply because high income individuals’ spending habits do not drastically and significantly change when the economy is not doing well as other compared to low income individuals(Schwartz 85) Wynn resort is performing quite well as indicated by their financial statement. The main contributing operations are the Casino business, hotel rooms, food, and beverages. The casino revenues are measured by the net difference between gaming wins and losses. A chart on their website indicates that Wynn’s Resorts’ casino revenues represent 75% (Wynn and Stephanopoulos p.89) of the total revenues generated by the resort for the year ending September 30, 2014. Wynn’s gross margin in the casino business is 38% for the trailing twelve months. The revenues generated in the hotel business represent 8% of Wynn Resorts’ total revenues. However, the gross margins for room revenues were 73% for the trailing twelve month ending September 30, 2014. This points out that the resort’s hotel business or section is more profitable when compared to the firm’s other operations. the daily room rate (ADR), occupancy rate, and the revenue per available room are some of the performance indicators for the resort. The third best revenue contributor is food and beverages section, which contribute 10% (Wynn & Stephanopoulos 91). of the total revenues generated for the financial year ending September 30, 2014. The gross margin on Wynn Resorts’ food and beverage products was 44% during this period. The Wynn Resorts’ in Las Vegas consist of 34 food and beverage outlets. The company is generally discussing about the necessary inclusions in a financial report. The assets it owns and operates such as the casinos, the hotel rooms of which the two generate the highest amount of revenue for the firm. The firm has also disclosed the critical accounting policies and estimates such as development, construction, and property and equipment estimates that are of importance mostly to auditors in order for them to be able to predict the over or under estimation of these estimates that may lead to later cash shortages. There are also estimates for doubtful accounts receivable. These are amounts owed to the firm by its customers. They need to be provided in case of occurrence of bad debts where the customers fail to pay the amounts owed to the firm. The company will have already catered for the amount not recovered. Risks That Are Discussed In the Financial Report The main risk identified in the annual report of the company is the interest rate risk exposure which is associated with their debt facilities that bear interest based on floating rates. They are trying to manage the interest rate risk by managing the mix of long-term fixed rate borrowings and variable rate borrowings supplemented by hedging activities, as they believe it is appropriate. The management of the firm cannot assure that these risk management strategies have had the desired effect, and interest rate fluctuations could have had an impact on the results of their operations (Wynn75). The firm has entered into floating-for-fixed interest rate swap arrangements relating to some of their floating rate debt facilities. Foreign currency risk has been discussed in the financial statements. The currency delineated in Wynn Macau’s concession agreement with the government of Macau is the Macau pataca. This currency is not freely convertible and is linked to the Hong Kong dollar. The exchange linkages of the Hong Kong dollar and the Macau pataca are subject to potential changes due to changes in Chinese government policies and international economic and political developments (Wynn Everett [Everett, Mass.] p.80). If the Macau’s pataca and the Hong Kong dollar are not aligned with the American dollar, significant fluctuations in these currencies’ exchange rates may occur. This will negatively affect the company’s operations. Another risk that the company is exposed to is the probability of the Chinese central government limiting visas to Chinese nationals to visit Macau branch of the Wynn’s resort. This would mean that the revenue generated from those nationals when they arrive at this destination resort will be reduced and thus affect the company’s overall performance (Schwartz p.90). Reduced revenues would affect number of the company’s operations including the ability to undertake additional projects that generate positive net present value. Political risk is given attention in the financial statement. This is caused by the fluctuations in the political factors in any given country where Wynn Resort operates. It is the risk that an investment could suffer as a result political changes or instabilities in a country. Wynn Resort operates in Macau (China) and Las Vegas in United States. The political changes and instabilities in these countries have sometimes affected the operations of Wynn Resort Leading to fluctuations in income and profitability. Credit risk and the accounts receivable; financial items and instruments that subject the company to concentrations and exposure to credit risk consist mostly of casino accounts receivable. The company issues credit in the form of makers to approved casino customers following investigations of creditworthiness. As at December 31, 2013 and 2012, approximately markers which were due from the firm’s clients amounted to 86% and 84% respectively. Economic or other business conditions and other significant events in these countries could affect the ability to collect such receivables. (Steve 86).The company has made financial provisions to respond to this risk. Works Cited Adoption of Design and Build Procurement Method: an Empirical Study on Wynn Macau Resort. U.S.A., Nova Science, 2014. Print. Brooks, Garth, Steve Wariner, Trisha Yearwood, George Jones, Huey Lewis, Jon Small, and Allen Reynolds. Blame It All on My Roots, Live at the Wynn. Nashville N.p., n.d. Print. Schwartz, David G. Grandissimo: The First Emperor of Las Vegas : How Jay Sarno Won a Casino Empire, Lost It, and Inspired Modern Las Vegas. N.p., 2013. Print. Steve, Wynn. Leadership Profile:ScholarWorks@UMass Amherst, 2014. Print. Wynn Everett [Everett, Mass.]. Everett: Wynn Resorts Holdings, 2013. Print. Wynn, Steve, and George Stephanopoulos. This Week: Gambling with Steve Wynn. N.p., n.d. Print. Read More