Vegas News November 1, 2020
Featured News: Casino Earnings
The big news in Las Vegas was obviously the opening of Circa. But, casino earnings and their impact are a constant reminder of Vegas in 2020. We did a post-opening TravelZork Live that you’ll be able to watch eventually. I have multiple articles coming out over the next couple of weeks about the property, so I’m happy to skip it for today. You can read a review of the sportsbook here. Michael will have more pictures and details from opening night shortly. (You can also view lots of updates about Vegas on the TravelZork Twitter and also in the TravelZork Facebook Group.) You can see my pics and videos from the week on Twitter.
Casino Earnings – Who Reported This Week
This week Boyd Gaming, Red Rock Resorts (Station Casinos), MGM Resorts, and Penn National Gaming reported earnings. I don’t want the information from those calls to be lost in the post-opening bliss from Circa. This isn’t exactly news, but it’s a reminder that our collective casino experiences will continue to change.
Boyd Gaming was the first to report earnings this week. This is a good casino operator to follow. Boyd Gaming has properties in Las Vegas and all over the country so there’s a diverse look at Las Vegas and the US overall. The combination makes it easy to see what’s happening in Las Vegas and around the country.
The vibe of the Boyd Gaming call was very positive. While business is down overall, Boyd Gaming has a positive outlook. They’ve been able to increase profits from the guests who are visiting. The problem financially is that there are fewer people visiting casinos overall. This is good for the business but over time may not be so great for guests.
This isn’t a new observation. All of the casino corporations have discussed changes for much of the year. Boyd isn’t alone. In fact, MGM Resorts started this years ago with the Profit Growth Plan. The Covid pandemic is making every business (casino and otherwise) rethink how they operate.
Boyd was able to increase margins at its casinos around the country by focusing on the most profitable customers. They’ve also reduced expenses to increase profits. Some of the amenities that have been reduced will not return to Boyd properties. The same with employees.
While these reductions might be profitable, it’s possible there will be fewer amenities to return to if you haven’t visited a casino in a while. Additionally, fewer employees might mean that there’s less attention to detail by casino employees. It’s difficult when one job becomes three or a has reduced hours. Managing a job with fewer hours and/or more duties may be more difficult to manage.
This is the case with all of the companies reporting earnings. Casino corporations are finding ways to reduce expenses in order to make a greater profit per guest. Corporations should have been running this way already but the COVID-19 outbreak is ensuring the companies trim the fat wherever possible.
This tactic has helped boost earnings for Boyd Gaming, Red Rock Casino and Penn National Gaming. During the previous earnings call, MGM Resorts said the pandemic pushed up their digital and online efforts.
Some of the changes may be noticeable, but not all are obvious. Similarly, this of the financially inefficient venues may not return. For example, as we’ve been discussing for a while, buffets may not return. Think about other things that are no longer part of the casino experience due to Covid too because they may not return.
Specific Earnings Notes – Casino Earnings
Boyd Gaming’s Las Vegas locals casinos are doing better than downtown properties. As we mentioned a couple of weeks back – Boyd will resume charters from Hawaii. This will directly impact The California. It could also lead to Main Street Station opening sooner than later.
There was an interesting comment from Boyd’s CEO, Keith Smith, about the opening of Circa. He said great things about the property. He also mentioned that he doesn’t expect much of a revenue boost since Circa is a premium (higher end) property and they have different customers. Smith also said that guests from Hawaii will have a bigger impact on the bottom line than the extra foot traffic from Circa.
SUBTLE BOMB – MGM – Casino Earnings
MGM Resorts dropped a subtle bomb during its earnings call. The company said that it could close some hotel towers in November and early December. Without NFR (National Finals Rodeo) this will be a quiet period in Las Vegas. It wouldn’t be a surprise to see others closing towers without making a grand announcement.
MGM Resorts said that Park MGM is the only property that isn’t profitable right now. Mandalay Bay was previously the only property that was cashflow negative. That changed over the summer as families stay at Mandalay Bay for the massive pool complex.
MGM Resorts’ hotel occupancy in Las Vegas was 38% during weekdays and 60% during weekends in the third quarter. The weekends are as good as can be expected in this market. The company is going to try and find a way to boost weekday visits. Expect to hear more about this.
Penn National Gaming had zero information available for Las Vegas. Evidently, the company is still fielding calls from interested buyers in the Tropicana. Meanwhile, the company is reducing staff at both of its Las Vegas properties (Tropicana and M Resort).
Red Rock Resorts earnings almost mirror Boyd’s business so I’m not going to dive deep into things. There’s no real news about reopening Palms and the other closed properties.
You can read the earnings releases here:
- Did you know the players club for Circa, The D Las Vegas and Golden Gate now has an app? I just found out. iPhone peeps can download here.
- Stiffs and Georges always has an interesting look at earnings. Here’s their take on MGM and PNG.
- As I mentioned earlier Trop and M are laying off people. Eater has more info.
- Las Vegas Sands is exploring selling its Las Vegas assets (The Venetian and The Palazzo). Presumably, the company will just be known as Sands after they leave Las Vegas. Read more here.
- Bad news: No fireworks on the Vegas Strip for New Year’s Eve. Good news: The Plaza will have fireworks on New Year’s Eve. Read more here.
- It’s somewhat surprising Guy Savoy never took his French cuisine to Paris. Eater has details.
- Here’s a press release about Circa opening if you can’t get enough.
- Plaza will have comedy once again. Read more here.
- A sex worker is suing the Nevada Governor to reopen brothels or allow them to WFH. Read more here.
- The chairwoman of the Nevada Gaming Control Board is leaving for an “exciting” corporate job. It’s not exciting but it probably pays well. Read more here.
- The headline for this article about the new sports bar at Palace Station has me interested.
- Vegas Advantage has a breakdown of the games at Circa.
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