Caesars news dominates in and around Las Vegas this week. Last week they released an investors presentation and this week they held a meeting with investors at the 2018 Gaming & Lodging Conference. You can listen to that call here. We’ll get to that shortly.
We’re going to flip the script this week and start the Vegas News with Quick Hits since there’s one main topic. We’ll dive into the Caesars Entertainment call, presentation and news next. In the meantime, here’s a look at the news in Las Vegas.
- You might remember that the Westin was renovated earlier this year. The property has been sold for just under $200 million. There’s no word if the hotel will remain a Westin. Read more here.
- George Clooney is going to have a Halloween party in Vegas. Evidently, there will be plenty of celebrities in town. Read more here.
- I’m told that people like the Mac King show at Harrah’s. He’ll remain there until 2023. Read more here.
- Floyd Mayweather says he’ll come out of retirement to fight Manny Pacquiao again before the year is over. A conspiracy theorist might say that MGM is paying out the wazoo to get another event at T-Mobile arena before the end of the year to bump revenue. If you’re curious about little old men fighting you can read more here.
- FRIENDS! The Musical Parody opens at The D Las Vegas on October 26. Read more here.
- Global Gaming Expo (G2E) Preview: Gamblit will be showing off a new PAC-MAN Cash Chase casino game. This game should be in casinos early next year. Aristocrat will show off Mad Max: Fury Road. Read more about the latter game here.
- Cat’s Meow karaoke bar is coming to Neonopolis. There’s no opening date yet. Read more here.
- The owners of Herbs & Rye opened a steakhouse named Cleaver. This is a good option for those of you that want the steak from H&R without standing in line at the original place. No word if the half price steak during happy hour available at H&R will be available at Cleaver. See pics and read more here.
- The Final Fight Championship will begin at Rio All-Suite Hotel on September 28. Read more here.
- A Mob Story at The Plaza will drop money on the crowd. That sounds like fun. Read more here.
- The zipline at The Linq will be open in November. Read more here.
- The Grand Cafe at Palace Station is closing for renovations. That’s a good thing as it sticks out like a sore thumb with all the other renovations at the property. It will reopen next year. Read more here.
- Las Vegas locals hate paying for parking but they love to pay for the right to buy food at the San Gennaro festival. Admission is $12 per adult. Read more here.
- Las Vegas locals who hate paying for parking to Vegas Golden Knights games can pay $2 each way on the bus. Read more here.
- There are more bollards being placed on the Vegas Strip. There could be more than 3,000 more protective posts by February. Read more here.
- Four new crocodiles have joined the party at the Mandalay Bay Shark Reef Aquarium. Read more here.
- Kind Heaven looks awesome!
Caesars is Full of News
Caesars Entertainment has a new corporate website. This website is a way for those looking to own part of the company to find information. The investor page has links to press releases, earnings information and presentations.
Towards the bottom of the main corporate page there are links to Caesars properties around the world. I had no idea that Caesars Entertainment – Egypt was a thing. There are casinos at the Four Seasons, Hilton, and Fairmont. This could be fun if you’re looking to spice up your next vacation.
Flamingo Macau? The Cromwell Macau?
It could happen. Caesars Entertainment filed for trademark protection for Flamingo and The Cromwell in Macau. There have been no announcements so the company could just be protecting those brands. It’s also possible that they will partner with one of the nearly 400 existing hotels in Macau to open a casino. You can read about Caesars history of protecting their trademark in Macau here.
Caesars Could Be Sold Or Sell Parts
The headline from Reuters says “Hedge fund HG Vora builds Caesars stake, to push for divestiture or sale: sources.” Hedge fund HG Vora Capital Management owns almost 5% of the company and would like to see Caesars divest some assets (goodbye Rio?) or sell the company outright.
Nothing is being done yet but after their recent investors call I think Caesars might need some kind of kick in the butt. There was a strange kind of “matter of fact” vibe during the investor presentation. Efforts they committed last year like Salesforce tech upgrades and decreasing the effect of unprofitable comp grifters haven’t even been started. There was no explanation given but the information was presented as though it was new. My non-corporate outsider point of view is that there’s some kind of disconnect here.
Parking Fees are Cool at The-Linq
During the investors call CEO Mark Frissora mentioned that they offered customers at The Linq free parking for a month. The promotion that most people didn’t know existed had no effect on business. This result shows that parking fees don’t have a negative effect. Fees will continue.
The Las Vegas Review-Journal has more details on this topic. Once again, the tone of this part of the investors meeting/call sounded just a little strange.
Caesars Quick Hits
The following are just some notes and thoughts I have from the Gaming & Lodging Conference investors meeting.
- 40% of Caesars Las Vegas revenue comes from gaming. That’s higher than most operators in Las Vegas today. The goal of most corporations today is to have gaming account for approximately 30% of revenue. In case you’re curious, 50% of Caesars company-wide revenue comes from gaming. You can see the slide from the presentation here.
- 55% of Caesars Entertainment revenue comes from Las Vegas. 45% of their revenue comes from the rest of the world. You can see the slide from the presentation here.
- Business for Caesars in July was slow, August was better, and September is slower than expected. The fourth quarter looks to be up substantially. Business was way down in the fourth quarter last year because of the shooting on October 1st.
- Expect to see a lot of offers from Total Rewards in the fourth quarter. Caesars isn’t good with short-term fixes and have a big fourth quarter promo push in the works.
- Last year during one of their earnings/investor calls Caesars said they wanted to try to lessen the number of people who took advantage of their Total Rewards comps. They refer to these guests that use comps and rewards that don’t spend money with them as “unprofitables.” This isn’t meant to be literal but a generalization that Caesars doesn’t make as much money from people that have learned to game the system. Caesars has estimated this to be about 15%-20% of their customer base. That seems a bit high, but that’s their math.
- Caesars-Entertainment’s profitability strategy is interesting. Caesars has lower net revenue from customers who receive full comps or pay full price for hotel rooms than those who just receive discounts. They plan to increase the number of discount room promotions in order to increase revenue. You can see the chart here.
- Caesars is trying to increase “controllable hold” by changing the rules of games. Look for more bad rules changes to your favorite casino games.
- For some reason, Caesars is just getting around to placing games with a high hold in high traffic areas of casinos. Most casino operators are doing this already.
- Evidently, skill-based games are doing well at Caesars properties.
- The Book at The Linq could be a template for sportsbooks at other Caesars casinos. They want to take the concept to Atlantic City and Mississippi if it increases revenue. You can see an overview here.
- I found this interesting when discussing technology. Caesars says that they can’t cut their paper mailing list any further. Approximate 15-20% of Total Rewards customers prefer snail mail offers over email offers. They just like seeing the offer on paper.
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