LAS VEGAS (KLAS) – Video poker machines are full. Hotel parking is expanding. The new food is drawing crowds. This isn’t a Las Vegas Strip casino—it’s in the city’s suburbs.

Red Rock Resorts, owner of seven major Las Vegas Valley casinos, reported $526.3 million in revenue, a new record high, during a Q2 earnings call with investors.

“By every measure, our Las Vegas operations delivered its highest quarterly net revenue and adjusted [earnings before interest, taxes, depreciation, and amortization] in our 49-year history,” Stephen Cootey, Red Rock Resorts Executive Vice President, said.

The record revenue marks an 8.2 percent increase for the company compared to this time last year. Cootey attributed much of the success to the 108,000 new customers brought in with investments such as the Durango Casino Resort.

“Durango continues to expand the Las Vegas locals’ market, drive incremental play from our existing customer base and attract new guests to the Station Casinos brand,” he said. “The property once again demonstrated strong momentum within the quarter with increased visitation, higher spend per visit and elevated net theoretical wind from our cargo customers in the surrounding Durango area.”

Steve Weiss, an investment caller, questioned the strong growth from Red Rock Resorts, pointing to ongoing struggles on the Las Vegas Strip.

“What I’m trying to understand here is, if you guys have seen any pickup in new customers given the well-documented slowdown along the Las Vegas Strip,” Weiss said.

“We’re seeing particularly strong growth in our VIP, our core customer, our regional and national customer,” Scott Kreeger, Red Rock Resorts Casino Resort Executive, said. “But in this quarter, specifically, not to be outdone, we also saw a considerable improvement in what we would call our retail customer, our non-rewards customer.”

The dichotomy of the excitement in the suburbs as compared to the pessimism on the Strip has been highlighted with the dropping of hotel room rates.

For comparison, Caesars Entertainment conducted its earnings call the same day, reporting a 3.7 percent decline in year-over-year revenue for the Las Vegas sector.

The Flamingo, a Caesars Entertainment property, is dropping some rooms to $18 rooms as soon as Aug. 28, according to the Caesars.com rate calendar.

Post Related

Post Related