Dive Brief:
- Caesars Entertainment saw declined year-over-year net revenues in the second quarter of 2024, as well as flat adjusted EBITDA, according to an earnings report. The results come after a “terrible” April, CEO Tom Reeg said during a Tuesday earnings call.
- In Las Vegas, though, where the company operates several prominent resorts, Caesars reported increased net revenue and adjusted EBITDA for the quarter. According to the earnings report, Caesars’ net revenue in Sin City grew 1.9% year on year, while adjusted EBITDA was up 1.2% for the same period.
- Growth in the Las Vegas segment in Q2 was driven by “record same store revenues, hotel occupancy and Average Daily Rate,” Reeg said in a statement. He said he remains “optimistic for the balance of 2024 driven by strong operating trends in Las Vegas” as well as the end of some regional disruptions.
Dive Insight:
Factors that negatively impacted Caesars in the second quarter include “peak construction disruptions” in the center of the casino at the company’s project in New Orleans, where it is transforming Harrah’s New Orleans into Caesars New Orleans, Reeg said during the call. These disruptions are expected to continue for the next month or so.
Additionally, in Reno, Nevada, bowlers are one of “the biggest groups” Caesars sees business from, and that group was 20% smaller in the quarter compared to last year, Reeg detailed. “We’re missing well over 40,000 direct room nights from them,” he added.
“The combination of those two items in the quarter cost us over $25 million of EBITDA, and those will continue into the third quarter,” Reeg said during the call.
In Las Vegas, though, Reeg said he was “very pleased with the quarter.” The company’s newly renovated Versaille Tower at Paris Las Vegas performed well and is proving to be Caesars’ “most successful hotel renovation,” he added.
The Versaille Tower rooms were up $65 in ADR year over year in the quarter, a roughly 60% lift, Reeg said. Caesars President and COO Anthony Carano said during the call that the Versaille Tower rooms, along with the renovated Colosseum Tower at Caesars Palace, are “driving above-plan returns on investment, driven by strong gains in cash ADRs.”
Carano also said the group and convention segment delivered an increase in occupied room nights year over year in Q2. In May, particularly, Las Vegas outpaced all other top 25 U.S. markets for events volume growth, up 18.5% year over year in the month, according to Knowland.
The rest of the year “looks strong” for Las Vegas, Reeg said.
“Expect Vegas to post growth. I know that that's not what's been reflected in estimates, but we feel very good about the rest of the year into ‘25,” he added.
In its regional segment, Reeg said Caesars’s third quarter results will likely look similar to the second quarter. The fourth quarter, though, will see benefit from a full quarter of “New Orleans rolling out its new product.”
Carano noted Caesars’s rebranded New Orleans property is set to be completed in October.
