A Few Las Vegas Resorts and Casinos Could Be Closed for Good
Las Vegas is no excuse when it comes to the Covid-19 pandemic and this is why many establishments in the city have temporarily closed up until now. Sin City has always been known as a getaway place with its luxurious and big hotels and casinos.
The closure of non-essential businesses in Nevada was ordered by Governor Steve Sisolak on March 17, 2020. Many casinos were affected by this and the lucky ones are the operators with online services. For the two months that the land casinos were closed, many people turned to Vegas poker online and other online gambling activities for entertainment.
It was in June when bars, restaurants, and casinos were then allowed to operate. However, a few casino places remained closed and some of these are the four Station Casino Resorts. Frank Fertitta III, the CEO of Station’s parent company Red Rock Resorts, talked about this in the company’s second-quarter 2020 earnings call.
Fertitta said, “We don’t know if—or when—we’re going to reopen any of the closed properties. We think it’s too early to make that decision at this time. So far, we’re very pleased with the results that we’ve had, the ability to move some of the play from the closed properties to our existing properties, and we’re going to continue to try to get clarity and navigate the situation to make well-informed decisions, but whatever decisions we make will be in the best interest of shareholder value.”
In total, Station Casinos closed its 20 properties that are located in Southern Nevada since March to comply with the order of the state’s governor regarding the non-essential businesses. The majority of these properties have already reopened, but before deciding on whether the four remaining closed properties should be reopened, the chief financial officer of Red Rock, Stephen Cooley, said that the company should first learn whether there is data that would show a healthy demand for these resorts to reopen.
Currently, the four Station Casinos that remain closed are the Texas Station, Fiesta Henderson, Fiesta Rancho, and the off-Strip Palms.
Red Rock Resorts is just one of the businesses in Nevada that are negatively impacted by the pandemic. The company reported a shard revenue decline during the second quarter of 77.5%. Red Rock Resorts reported net revenue of $108.5 million for its second quarter with a net loss of $118.4 million.
While Red Rock Resorts is taking the time to decide on the fate of the casinos that are still closed, in July, the Caesars Entertainment Corp. reopened its fifth casino, Bally’s. The Las Vegas Sands Corp. has already opened its business. However, they decided to close the Palazzo hotel tower during the weekdays.
Experts say that it will take some time for the businesses in Nevada to grasp where the customer demand stands when it comes to the reopening of the resorts. This is especially because Nevada’s health and safety policies keep on changing.
Union Gaming analyst John DeCree who is based in Las Vegas spoke about this and said, “I think demand signals are mixed, and probably will be for some time. Right now, Las Vegas is mostly reliant on drive-in visitation and gaming customers. The midweek piece of the business is much harder to come by without big groups coming to town.”
However, Caesars Corp. seems to already have a view on this. The company’s CEO, Tony Radio, said in a news release that they decided to reopen Bally’s in July because they saw a solid customer interest in visiting Las Vegas this summer.
Meanwhile, Las Vegas Sands announced last month that starting July 21, they will no longer accept reservations on the weekdays as their response to the travel demand for the summer and to better reflect occupancy patterns.
Wynn Resorts, so far, has declined to comment on the visitor demand and whether they will follow what Las Vegas Sands did. The MGM Resorts International, Boyd Gaming Corp., and Station Casinos also did not have a response on this as well.
The founding partner of The Strategy Organization in Las Vegas, John Swissman, said that not operating on weekdays, like what the Palazzo is doing, could help these businesses cut costs in cleaning supplies, utilities, and more. He finds this logical and this would also help better match the midweek supply to the midweek demand.
Brendan Bussman, the director of the government affairs for Las Vegas-based Global Market Advisors said that it is the weekend traffic that is showing recovery and this is why businesses chose to operate on the weekends more. He also said, “Vegas means business, and until that segment of the economy comes back, the midweek will continue to be soft.”