I listen to earnings and investors calls so you don’t have to. I often find a few nuggets that are useful or interesting to visitors to Las Vegas that the mainstream media might overlook. Caesars just had their first investors call since emerging from bankruptcy and I have a lot spinning in my head.
Corporate earnings calls usually focus on revenue. This call was used more to discuss the future plans for Caesars Entertainment. Caesars rang the bell at NASDAQ this morning. This is all an effort to reach out to people who might be interested in buying stock in the company. The information was probably news for investors even though we know some of it already.
My notes are below. I’ll expand on some of the information in future articles. Feel free to comment below or tweet me with any questions. You can view the presentation here.
- Revenue: Las Vegas > Regional > Managed (corporate etc)
- CEOC similar to MGP
- More side bets for table games.
- Hold increasing this year. Goal is to increase hold again next year
- eSports events with Amazon & Microsoft (Make money on f/b)
- 50% rooms renovated past 2.5 years. 6k this year, 10k overall. Still touting The Linq as new. Expect great results from Flamingo. Will continue through 2020.
- Pronto (Giada) is a fast casual restaurant.
- Frissora calls “Hell’s Kitchen” piece of art. Says new Ramsay restaurant should be one of best revenue on the strip.
- 5% of revenue goes to celebrity chefs, all other revenue to CZR.
- F&B + 210%
- JLo 2nd highest ticket price worldwide.
- CZR is #3 live entertainment promotor in the world behind AEG and Live Nation.
- The Who was pictured with other resident artists. Confirmation for 2018 return?
- Major focus on Trip Advisor rankings.
- +10.5% buffet covers through tech.
- Looking to reduce costs and increase margins. New phase beginning soon. Similar to PGP.
- Salesforce value added >$80m – Salesforce will help upselling, push messages to customers (i.e. eat at Old Homestead after seeing Celine).
- Las Vegas 63% of CZR business.
- Conventions make hotel occupancy 97% w/higher ADR. F/B revenue is $120-$150 per person in for conventions. That’s more than gamblers.
- CZR gaming revenue was +9% 2014 to 2017.
- 90% of rooms will be upgraded by 2020.
- *Not investing in Rio.
- Total Rewards app increases revenue by 11% per customer.
- Credit Card signups = +26% revenue. Best part of business (joke, but sounded serious).
- Expansion opportunities – 7 acres at Caesars Palace, 39 acres next to The Linq, 50 next to Bally’s, Paris and Planet Hollywood.
- Master plan awaiting approval.
- Caesars studio by Bally’s confirmed.
- Convention center near Flamingo will be for meetings. No exhibition space.
- Old buildings don’t have convention space. CZR behind competition.
- Licensing: 10-15% increase in revenue for anyone becoming a Total Rewards property.
- CZR licensing all brands. (p 33 of presentation).
- CZR looks at Total Rewards similar to Hilton Loyalty and other hotel loyalty programs.
- 70-80% of population are active in some form of gaming (gaming & gambling).
- 54% of millennials are casino gamers per survey. More than Gen X and Boomers.
- Salesforce will trigger offers to casino games. (i.e. leave show message and get message to play gamblit games, “here’s 100 free credits”).
- Expirations on offers lead to greater revenue.
- New side bets show +11 % increase.
- New slot tech leads to +15% revenue increase.
- Table game progressives show +8% increase.
- Proprietary baccarat game +18%? *Not sure what this is*
- Caesars sport betting app news.
- – 8700 bets and $1.4 mm in deposits in opening weeks for sports betting app
– They expect 25% of volume
– App will relaunch as Caesars Sports soon. - 1% increase of gaming revenue = $50-60 million.
- Increased spend on slots in 2017 because of new slot tech and higher returns. Will increase budget again as needed.
- Guests don’t get offers unless booking a room.
- They’re developing systems to stop people who book just for offers and don’t spend. *I’d like to know more.
- Meetings in Las Vegas have more attendees than when the same meeting in another location.
- Master Plan – 4 projects that are fairly significant for ROI. TBA soon. Awaiting board approval.
- 94% occupancy overall. 97% during conventions
These are just notes. You can confirm most of the information in the presentation. Some information was discussed only during the webcast. There’s a lot of information here. I have a lot of thoughts that need to be sorted through before diving deeper.
Marc grew up on the mean streets of the South Bronx. He's the rare combination of Yankees and Jets fan which explains his often contrarian point of view. He learned about gambling at a young age working down the street from a bookie who took action on anything from the mainstream sports to the last three digits of the purse for certain horse races. Yeah, that's a thing. Today Marc is a freelance writer and social media consultant which allows him to work anywhere there's a wifi signal. This allows him to work from the sportsbook at Red Rock Resort or the food court at The Venetian where you’ll find fast and free wifi. Writing about steak, booze, gambling and Las Vegas is a tough job but somebody has to do it.
Really interested in the “Not investing in Rio” bit.
Not much surprising here. They’re focusing their renovation budget on the Vegas Strip. This was part of room renovation segment of the call but it felt as though Rio was singled out to make a point.
“Looking to reduce costs and increase margins. New phase beginning soon. Similar to PGP.” UGH!
I guess from a business stand point, they can get away with it, so why not? But, it’s still a bummer from a customer viewpoint.
Caesars has been doing this for awhile but they don’t make a big deal about it like MGM/PGP. As a customer I don’t like it. As a business owner I appreciate it. As both I’m conflicted. Haha.