The Caesars Entertainment executives are confident that the Las Vegas economy will stay strong in the forthcoming period. Although the second-quarter results slightly fell behind the last year’s figures, the company expects that the major sporting events to be held by the end of 2023 and early in the 2024 will help maintain the revenues at significant levels, as Las Vegas Review-Journal (LVRJ) reports.
”No Discernible Impact”:
During the second-quarter earnings call held in Reno, CEO Tom Reeg addressed the questions of a potential recession in the Las Vegas economy raised by industry analysts earlier this year. As the source reports, it seems that such concerns were not the indicator of the actual condition of the local macro economy as Reeg said that the recently experienced minor declines have had “no discernible impact” on the future economic prospects. According to LVRJ, such a firm stand point seems based on the two major events taking place soon.
F1 and Super Bowl Ahead:
The Formula One Grand Prix will reportedly be held already in November while the Super Bowl XLVIII will run as soon as in February 2024. These two events seem the main reason for the Caesars executives’ optimism about the revenue performance in the near future. Also, Reeg reportedly told investors that the company has experienced a steady revenue level across all customer segments and have 96 to 98 percent of accommodation facilities already booked for the forthcoming period.
“It feels really strong out here. Today, volumes are as they’ve been for a year and a half and continue to be very strong,” Reeg reportedly said. “It’s really hard to tell you anything that would give you a bearish set stance on Vegas.”
High Booking Levels:
LVRJ reports that the company’s Las Vegas segment generated $1.13 billion in gross revenues in the second quarter of 2023, which is 1.2 percent lower level than $1.14 billion reached over the same period in 2022. The Caesars executives reportedly attributed the decline to the strong performance in Q2 2022 and expect a similar trend during the F1 and the Super Bowl events. As reported by LVRJ, the company expects that the hotel bookings will rise by 5 percent during the F1 event held November 16 to 18 and be followed by casino operations.
Also, the company reportedly expects that both international and domestic high-rollers will strongly contribute to the handle to be made during each of these events. Reeg reportedly said: “If you anecdotally look at who’s going to be getting our tickets, the average customer that will come to the game with us is substantially more valuable than prior Super Bowls.”
Complex Labor Negotiations:
As reported by the source, Caesars CEO also told investors that the company’s contract with Culinary Union Local 226 representing most casino workers expired at the end of May and that it has since been performed as an extended contract. The delayed new contract is reportedly due to ”complex” negotiations. Reeg reportedly said: “You’re talking about complex stuff that takes a little while but I’d expect that we’ll have new agreements by the fall and I’m not expecting a whole lot of drama around them.”
Caesars Entertainment shares reportedly fell about 2.1 percent to $57.79 on August 1, 2023.
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