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Wynn Resorts’ joint partnership in the UAE now owns a quarter of all of Marjan Island.
Josh Corder
Wynn Resorts has just closed a deal to buy another 70 acres of land on Ras Al Khaimah’s Marjan Island, giving the operator a total of 155 acres and ownership of a quarter of the entire island. Wynn is already developing a $3.9 billion resort in the emirate.
Of these 155 acres, Wynn now owns 40% of the land, while the other owners are Marjan — the developer of the island — and RAK Hospitality Holding, a state-owned hotel portfolio. To date, Wynn has put $514.4 million into the project.
CEO Craig Billings told investors during the quarterly earnings call on Tuesday: “During the second quarter, we contributed $357 million of equity to our UAE joint venture. This transaction included the purchase of our 40% pro rata share of all 155 acres of Island Three, the island on which Wynn Al Marjan sits.”
Billings added: “Our joint venture now owns not only the land under Wynn Al Marjan, but also 70-plus acres of land for potential future development on the Island. Of course, we have banked land before in the U.S. and Macau, and we are confident that acquiring this sizable Marjan land bank will prove valuable over the long term. As I have noted before, I believe the UAE is the most exciting new market for our industry in decades and our confidence in the demand and EBITDAR potential of Wynn Al Marjan continues to grow.”
Marjan Island is split into four separate smaller islands all connected to each other.
An Arabian Strip?
When Wynn announced its UAE project in 2021, it also registered trademarks for “Marjan Strip” and “Arabian Strip,” suggesting the operator has long-term goals of recreating the Cotai or Vegas Strip in the Middle East.
Wynn Resorts may manage other hotel brands in the region. In a first for Wynn, RAK Hospitality is paying Wynn “for what it knows,” akin to a hotel management agreement. This agreement could give Wynn the room to manage an entire portfolio of hotels on the island, bringing to life the “Arabian Strip.”
On this topic, Billings said in the April 2023 webcast that Wynn is looking at opportunities for additional developments around the Wynn. He said: “We and our partners are in active discussions around those adjacent parcels [of land] and I expect additional hotels will act as a powerful feeder to Wynn Al Marjan Island.”
In Wynn’s 8-K form for the quarter, Billings said the land presents “potential future development opportunities for Wynn Resorts or for selected third parties complementary to Wynn Al Marjan.”
There is also potential for Encore sister hotel — similar to Wynn and Encore in Las Vegas — since Wynn Resorts has registered the ‘Encore Marjan Island’ trademark as well.
Wynn Al Marjan’s Catchment Areas
Commenting on a question on who the UAE resort would cater to, Billings said in the call, he expects a big draw from India and Europe.
He said: “Europe is an important market for the UAE in general. But don’t forget India. India is a huge market for this part of the world. There’s a lot of folks there.”
“There’s a lot of wealth in India, and that’s gonna be an important market. And there are other parts of Asia that are big markets for the UAE as well, so it’s an exciting project. I think, the catchment area is probably larger than any other project that we have done, maybe akin to Vegas. If you take into account the fact that Europe’s population is pretty substantial and the international airlift is incredibly strong.”
The CEO had little to add to Wynn’s progress in terms of receiving a gaming license. The UAE’s gaming authority issued its first lottery license last month, publishing its gaming regulations at the same time.
Billings said: “I assume that they will be moving forward next to the next step in our licensure. I don’t have a specific timeline for you, but you can see all the momentum that’s happening there.”
This article has been updated to include information from Wynn Resorts’ latest 8-K report.
