Updated August 4, 2021 - 6:16 am
Caesars Entertainment Inc. isn’t expecting Nevada’s newest mask mandate to slow things down.
Overall occupancy rates for the quarter at the company’s Strip resorts hit 89 percent, the company said, and Caesars expects those numbers to climb through the remainder of the year.
“There could be bumps along the way in terms of masks and protocols that we have to follow, but the demand is exceedingly strong and has continued to build. So, we feel good about where we are in the bricks-and-mortar business,” Caesars Entertainment CEO Tom Reeg said Tuesday during a quarterly earnings call with investors.
After dropping the mask mandate in early May, Nevada last week reimplemented the requirement in 12 of 17 counties identified by the Centers for Disease Control and Prevention as areas of high transmission for COVID-19. Key metrics, including infection rates, hospitalizations and deaths, have been on the rise since mid-June as the more contagious delta variant has become the dominant strain in Nevada and the state’s vaccination rate, which sits below the national average, has stagnated.
Despite the recent surge in COVID-19 cases in Southern Nevada, the company expects its Las Vegas resorts to remain in the low to mid 90 percent occupancy rate range going forward, according to Reeg.
“What’s going on with the mask mandate is far less onerous than the restrictions we dealt with in the last quarter,” Reeg said.
Caesars brought in $2.5 billion in net revenues during the quarter that ended June 30, nearly 20 times what the company generated in the same period of 2020 when casinos and most other businesses were forced to close their doors as the COVID-19 pandemic took hold across the globe. The company reported a net income of $72 million on those revenues last quarter, compared with a net loss of $100 million in the same quarter of 2020.
The company noted that the quarter’s good showing came while significant restrictions, including capacity limits, social distancing requirements and the original mask mandate, were still in place on Strip properties through March and April as well as part of May.
A lot of that success also came while the ever-important convention and group business travel, which typically buoy midweek occupancy at resorts, was just starting to trickle back to Las Vegas. As those types of travelers return, business at the company’s Strip resorts should only improve, Caesars President and Chief Operating Officer Anthony Carano said.
Carano said that group and convention revenues for the second half of 2021 compared with the same period in 2019, a time before the pandemic had hit, are pacing up at roughly 18 percent.
“We remain encouraged by booking trends for the second half of 2021. We’re expecting group business to start returning to Vegas, with each month getting better as we progress throughout the second half of the year,” Carano said.
Sale still on horizon
Reeg said that the company still plans to sell off one of its eight Strip properties, a move that has been planned since Caesars Entrainment merged with Eldorado Resorts.
“Nothing has changed there,” Reeg said. “We still expect to sell a Vegas Strip asset, and I would expect that sale to take place in 2022.”
Reeg also said that he has “no interest” in expanding Caesars Entertainment’s footprint to Chicago, which in April published a request for proposal for a new casino in the nation’s third-largest metropolitan area.
The company was also bullish on its plans for sports betting, pointing to the revamped Caesars Sportsbook mobile betting app and nationwide marketing campaign that launched Monday as part of a rebranding initiative following its acquisition of sports betting giant William Hill earlier this year.
Reeg said Caesars intends to more than $1 billion over the next 2½ years to build its customer base within the sports betting market. “We realized that we operate in a world that is competitive and that we’ve got to jump in and compete,” he said.
Caesars shares, traded on the Nasdaq, closed up 28 cents, 0.3 percent, to $86.78.