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State of Play
- Caesars Entertainment remains optimistic about a strong comeback for Las Vegas, anticipating a rebound following the summer travel slump.
- Despite a dip in occupancy and room rates, the company expects next year to be a record-breaking year for conventions and group business, vital for its recovery.
During a recent earnings call, Caesars Entertainment CEO Tom Reeg acknowledged that Caesars’ Las Vegas properties experienced a decline in average daily room rates and overall occupancy this summer.
Net revenue fell to $952 million in the third quarter, marking a 7% decrease year-over-year and a sig. However, Reeg noted signs of improvement in August and September that could signal a turnaround as the year comes to a close.
This may result in more competitive pricing and attractive offers as Caesars, which also operates Caesars Palace Online Casino, strives to bring leisure customers back to Las Vegas.
Earlier this week, it was also announced that Caesars Entertainment suffered a significant loss in Q3. The company reported a quarterly loss of $0.27 per share, significantly lagging behind revenue expectations. This marks a significant dip from the smaller loss of $0.04 per share reported at the same time last year. The company’s revenues hit $2.87 billion but fell short of expectations.
This decline is a continuation of a challenging trend for the company, with only one positive earnings report in the last four quarters for Caesars. The company’s stock has struggled, dropping approximately 32.5% since the start of the year, in stark contrast to the S&P 500’s gain of 16.9%.
Return of conventions key for Caesars
As for the retail side in Las Vegas, with occupancy rates over 90% in the last quarter, operators like Caesars are keenly aware of market dynamics and potential room for adjustment in pricing strategies.
The anticipated uptick in group business suggests an increase in events and visitors, which could enhance the overall gaming and entertainment experience in the city.
Caesars plans to leverage next year’s anticipated surge in group bookings to drive revenue recovery. As conventions return, players can expect increased activity in Las Vegas, leading to more opportunities for gaming and entertainment.
What would also help is a little bit of stabilization in the economy and the political landscape in the US. There’s so much uncertainty from day to day, let alone month to month. Until that happens, doubt will remain for those who may travel to Las Vegas.
Based on reporting by Matthew Seeman for KSNV.
