Las Vegas Casino Operators Great First Quarter Earnings
First quarter earnings were great for the largest Las Vegas casino operators. New Year’s Eve bled into the first quarter. The extra day of revenue was helpful for casino operators. The year always starts with a bang. The Consumer Electronics Show (CES) is the largest convention and expo of the year with well over 100,000 attendees.
The first quarter was bolstered by a second major convention and expo. ConExpo isn’t an annual event but it was a boost to casino operators in the first quarter. The convention business helps fill rooms, bars, restaurants, and even the casino floor.
The busy week of ConExpo led into the busy NASCAR weekend. A good number of agriculture workers also enjoy NASCAR and stayed for the race and surrounding events. Just about every weekend in March had a major event. March Madness continued and helped generate nearly $1 billion in gambling win for the month.
Casino operators recently reported earnings and were more upbeat than usual. I’ll focus on what’s relevant to Las Vegas and link to reports if you’re curious to learn more.
Wynn Resorts had a terrific quarter worldwide that you can read about here. Las Vegas was pretty stagnant with single digit growth. However, there was some major forward-looking news. Wynn Paradise Park was finally approved! Construction will begin in late 2017 or early 2018. My money is on the later start date.
The approval of Wynn Paradise Park comes with some limitations. The board has decided to reduce the size of the Wynn Las Vegas expansion. Room capacity will remain the same. The new hotel tower has been nixed from original plans.
The lagoon, beach and convention space will be built on land currently occupied by the golf course. Complete plans haven’t been revealed yet and there will be space for further expansion should there be a need for a hotel tower or anything else. You can read more on the tentative plans and earnings here.
MGM Resorts International
MGM Resorts International is showing some serious post-expansion financial growth. Casinos in Atlantic City and Maryland greatly helped the bottom line in the first quarter. Las Vegas wasn’t too bad either. Occupied rooms in the first quarter of 2017 were 91% and in line with 2016.
However, hotel room rates rose from $162 in the first quarter of 2016 to $176 this year. Expect a similar increase in 2018, especially at MGM Resorts International hotels. Actually, the increase in hotel room prices for the first quarter might be even greater next year.
There was some seemingly good news for Las Vegas visitors who are fed up with nickel and diming at MGM Resorts International properties. It appears as though MGM Resorts International is done adding to the Profit Growth Plan (PGP). They might adjust what’s already been put into play but they appear done adding new fees and decreasing expenses.
In a press release, MGM Resorts International says that they’re “on track to completing Profit Growth Plan goal of $400 million Adjusted EBITDA contribution.” Time will tell how PGP affects the growth. There are plenty of people upset with the changes. It doesn’t seem to be hurting revenue in the short term.
Las Vegas Sands (The Venetian and The Palazzo)
LVS (Las Vegas Sands) showed another huge increase in revenue around the world. You can read the financial details here. Earnings missed on forecasts but we’ll leave that to the financial people like CNBC.
The news as it related to Las Vegas is massive. The first quarter for Las Vegas Sands was its best quarter since 2008. The two hotels and the Sands Convention Center helped boost earnings in Las Vegas. Room occupancy increased to almost 95% while the average daily room rate increased $17 to $268.
Las Vegas Sands is generating more revenue from the casino too. Customers don’t seem dissuaded by the casino offering worse odds at the tables (000 roulette, 6:5 blackjack). The increase of convention business at the hotel is also leading to more revenue from restaurants and bars. The Venetian is constantly upgrading their restaurants so you might want to make reservations before getting to Las Vegas.
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