The Dawn of Integrated Resorts in the UAE
The United Arab Emirates is poised to become a significant player in the global gaming and hospitality market. Following the issuance of the first commercial gaming license, expectations are high for the development of integrated resorts (IRs) across the region.
Wynn Al-Marjan Island: A First Look at Revenue Potential
The upcoming Wynn Al-Marjan Island property in Ras Al Khaimah is projected to generate substantial revenue. Initial estimates suggest a gross gaming revenue (GGR) between $1 billion and $1.67 billion, with a base expectation of $1.33 billion. A blended tax rate of 10% to 12% of GGR is anticipated, positioning the UAE competitively with other gaming destinations like Singapore.
Adjusted property EBITDA is projected to range from $390 million to $570 million, with an adjusted property EBITDAM of 36% to 43%. The resort is expected to generate free cash flow between $170 million and $350 million.
The project’s total cost, including land, fees, and capitalized interest, is estimated at $5.1 billion. Equity contribution is expected to be $1.08 billion, with the remaining capital raised through debt financing.
Targeting a Diverse Customer Base
The revenue projections are based on attracting a diverse customer base, including:
- International VVIPs: Ultra-high-net-worth individuals expected to contribute a significant portion of GGR.
- International Tourists: Leveraging the UAE’s strategic location and accessibility to a vast global population.
- Domestic Visitors: Tapping into the potential of the UAE’s resident population and its appeal to high-net-worth individuals.
The UAE’s appeal as a destination for affluent individuals is a key factor in these projections. The expectation is that thousands of millionaires will relocate to the UAE, further boosting the potential customer base.
Strong non-gaming revenue from amenities such as high-end dining and retail is also anticipated, contributing to overall operating revenue.
Opening Timeline and Property Features
The Wynn Al-Marjan Island is on track to open in 2027. The property will feature:
- A hotel with over 1,500 rooms, including suites, townhouses, and villas.
- A substantial gaming floor.
- A variety of dining and entertainment options, including restaurants, bars, and lounges.
- Luxury retail and conference space.
Future Expansion and Competition
While Wynn Al-Marjan Island is set to be the first of its kind in the region, other operators are exploring opportunities in the UAE. Regulations currently limit each Emirate to a single casino, suggesting a potential for further expansion across the country.
Potential Market Size
The higher end of market size projections would position the UAE’s gaming market just behind Singapore and approaching the revenue levels of the Las Vegas Strip, indicating the significant potential of this emerging market.
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