Golden Entertainment is optimistic that it will be able to pull in more guests as it continues renovations on The Strat and opens more taverns.
The Las Vegas-based company, which owns 10 casinos and more than 60 pubs and taverns, announced in its first quarter earnings call Thursday that it hopes to capture an additional $20 spend per person after The Strat renovations are complete. The $140 million project is expected to be wrapped up in 2021.
“All of our renovations have received positive feedback from our guests and the community, which we believe will drive brand recognition and increase customer loyalty,” said Chairman and CEO Blake Sartini.
As of March 31, Golden has invested $38 million on The Strat renovations, and has an additional $39 million budgeted for renovations throughout the end of the year.
Updates include a new tap room, a renovated sports book and lounge, 150 renovated rooms and suites, a remodeled casino floor and more. The company said anticipated construction disruption offset some of its growth in the first quarter.
The company is “cautious in terms of how that can potentially disrupt guests and ultimately revenue to the property,” said Charles Protell, Golden’s executive vice president and chief strategy and financial officer.
But executives remained confident that the remodeled space will bring in more guests.
New meeting spaces are expected to drive in more business guests, and Sartini said renovations in the tower have already shown positive signs of growth. Revenue at the Top of the World restaurant was up 13 percent in the first quarter, the 108 Eats restaurant saw a 14 percent jump in revenue in the quarter, and the recently opened Taphouse made 2.5 times more revenue than prior venues in its first full month of operations.
Additionally, the company expects more foot traffic as properties on the north end of the Strip — including the Drew Las Vegas, Resorts World Las Vegas and the Las Vegas Convention Center — continue to develop.
Golden, the owner of PT’s Entertainment Group, anticipates operating 66 taverns by the end of next quarter. With a 25 to 30 percent return-on-investment at its taverns, executives believe there’s plenty of room to grow in Nevada, especially with the Vegas Golden Knights in town.
“The taverns we operate benefit quite a bit from the Golden Knights,” Protell said. “We saw that last year, it continued this year. At times when the Knights are playing, whether they’re home or away, our food and beverage revenues are up 20 to 25 percent.”
The company said it will continue to open new taverns and improve chain store performance in Nevada.
Golden’s first quarter net revenue was $239.9 million, up 11.7 percent compared to the first quarter of 2017. Segment revenue growth was primarily driven by the company’s purchase of two Laughlin resorts in January; the company now controls about 40 percent of the Laughlin hotel market.
The company reported a net loss of $8 million, or 29 cents per share, for the quarter. The company closed a $190 million deal for the two Laughlin resorts during the beginning of the first quarter, and Protell said Golden’s casino growth in Nevada was offset by construction disruption at The Strat and increased expenses for the initial rollout of its new True Rewards players club.
Golden shares closed up 11 cents to $14.49 on Thursday.
Golden Entertainment Inc.
First-quarter revenue and earnings for Las Vegas-based Golden Entertainment Inc., which owns 10 casino resorts — nine in Southern Nevada and one in Maryland — and more than 60 taverns in Nevada. (Nasdaq: GDEN)
1Q 2019: $239.9 million
1Q 2018: $214.8 million
1Q 2019: ($8 million)
1Q 2018: $3.9 million
Earnings/(loss) per share
1Q 2019: (29 cents)
1Q 2018: 13 cents