Dive Brief:
- Caesars Entertainment reported its second quarter 2023 earnings on Tuesday, posting growth in net revenues and adjusted EBITDA. In Q2, revenues totaled $2.9 billion, up from $2.8 billion at the same time last year, and adjusted EBITDA increased to $1 billion from the $978 million reported for Q2 of 2022.
- Caesars net revenue in Las Vegas increased by 1.2%, up to approximately $1.13 billion from $1.14 billion at the same time last year.
- Performance growth in Las Vegas is expected to continue at a higher rate for the rest of the year and into next year, Caesars CEO Tom Reeg said in an earnings call with investors, as major upcoming events drive travelers to the city and the company invests in capital improvements at Paris Las Vegas.
Dive Insight:
Following trends over the past year and a half, guest volumes at Caesars’ properties in Las Vegas continued to be “really strong” in Q2, Reeg detailed in the earnings call. The Caesars CEO expects guest volumes in the city to remain robust, with occupancy rates, depending on the property, leveling at around 96% to 98% over the next three months.
Looking at the next six to nine months, Reeg expects increased occupancies as a result of major events happening in Las Vegas, namely Formula 1 and Super Bowl LVIII.
International racing competition Formula 1 will host its Grand Prix event in Las Vegas in November, with a track set to run a portion of the Strip. Bringing an estimated 150,000 travelers to the city, the event is expected to generate at least $1.3 billion for the local economy in the first year. Super Bowl LVIII will follow in February, expected to draw some 450,000 visitors to Las Vegas.
Caesars’ renovation and renaming of the Jubilee Tower at Horseshoe Las Vegas to the Versailles Tower at the adjacent Paris Las Vegas is also expected to enhance future performance. Announced in Q2 this year, the $100 million project is slated for completion in early 2024.
One of Caesars’ Las Vegas properties, however, has been under performing. Rio Las Vegas Hotel & Suites, while a revenue producer, is a “drag on EBITDA,” not producing enough EBITDA to offset its lease payment, Reeg said. The property will likely “leave the portfolio” on Oct. 1, benefiting EBITDA and margins in the fourth quarter, Reeg added.
