Sin City is one of the entertainment capitals of the world, and the seemingly eternal changing of hands of gaming properties has become part of that. Caesars Las Vegas is soon to open another chapter of that never-ending drama.
The company’s CEO recently hinted that the company wants to sell one of its Vegas properties. The guessing game about which property that might be and who might be a buyer can now begin.
Caesars Las Vegas portfolio about to shrink
According to Daniel Kline of The Street, Caesars’ Tom Reeg wasn’t shy about the company’s intent when it comes to its current Las Vegas holdings.
“Well, we’re 23,000 rooms today,” Reeg said on the earnings call.
“You’re taking out the Rio rooms and then you take out a property, depending on which property it is, let’s say 3,000 to 4,000 rooms. So you’re going to be down to, call it, 16,000, 17,000 rooms in the market. That’s about 1/4 of our existing capacity.”
Why cut down the company’s capacity in Las Vegas? To have a better chance at actually reaching that capacity without having to rely on paid marketing platforms.
“The less we need to rely on [online-travel-agency] business to fill our rooms, the better both from a customer quality perspective and an ultimate profitability perspective,” Reeg continued.
“And removing the 5,000 or 6,000 rooms from our system while introducing all of those customers that came in through Eldorado should have an extremely positive effect on rates once we’re — once all the deals are closed.”
Although Reeg provided zero intel into which property Caesars might want to unload or who might be interested but it’s fair to suppose the latter could drive the former. Additionally, Reeg’s comments signal another way the company is prioritizing its marketing strategy.
Caesars Rewards are all the rage
Earlier this year, Reeg made headlines in another way. He shared that the company would stop investing so heavily in advertising for its online gambling products. In his words, ads for Caesars Sportsbook will start to disappear after March Madness.
Instead of spending billions on such marketing, it seems Caesars is going to push its rewards program. The rewards program’s ties to its brick-and-mortar properties are essential to that push.
That fits into the strategy of reducing capacity to enhance the likelihood of filling the available space. With more customers seeking accommodations through Caesars’ app, spurred on by the company’s rewards program, that’s a far less costly method of customer acquisition.
One of Caesars’ Vegas properties could change hands in the near future. When that happens, it will be just another chapter in the non-stop cavalcade of Las Vegas casinos under new management.