The bottom line for Boyd Gaming? The second-quarter numbers don’t tell the whole story.
Boyd executives said Tuesday that 25 of its 26 casinos have posted positive cash flow results after being closed since mid-March because of the coronavirus pandemic. And the property that was cashflow negative, the California in downtown Las Vegas, broke even when its results are combined with those of the Fremont.
Downtown Las Vegas has been Boyd’s most challenging market in the company’s recovery after the COVID-19 influenced shutdowns. The California resort draws the vast majority of its customers from Hawaii, but the Hawaiian governor has instituted a mandatory 14-day quarantine on anyone – tourist or resident – who flies in from the Continental United States.
“In downtown Las Vegas, the business model that has sustained us for over 40 years is presenting a temporary challenge,” Boyd Gaming CEO Keith Smith said on a conference call with analysts. “Combined with reductions in overall tourism to Las Vegas, we are seeing lower traffic counts throughout the downtown market. As a result, our downtown business is not performing at the same level as our other two segments right now.”
Boyd began its relaunch on May 20 with Delta Downs, Evangeline Downs, and Treasure Chest in Louisiana, followed by IP Biloxi and Sam’s Town Tunica in Mississippi a day later. By July 1, with the opening of the Par-A-Dice riverboat casino in Elgin, Illinois, the company had 26 of its 29 properties in 10 states all reopened.
As of Tuesday, three of its Las Vegas-area casinos remained closed: Eastside Cannery on the Boulder Highway, Eldorado in Henderson, and Main Street Station in downtown Las Vegas.
Smith said there is currently no time frame for reopening those casinos. It depends primarily on business levels, he told analysts.
As for the second quarter, Boyd’s revenues overall fell 75.2% to $209.9 million. The company’s Las Vegas locals’ casinos saw a 78% revenue decline, with downtown Las Vegas revenues off 92.8% with just two of the company’s three casinos in the market operating.
Boyd’s regional casinos in the Midwest and South reported revenues of $156.7 million, a decline of 72.1%.
“Across the country, our team members did a tremendous job getting our properties back open quickly and safely over the final six weeks of the quarter,” Smith said. “And since reopening began, we are off to an excellent start.”
Smith said the company’s Midwest and South properties have posted double-digit cash flow gains.
“While overall visitation and revenues are down, spend per visit is robust, and we have successfully streamlined operating and marketing expenses to drive margin gains,” Smith said. “These positive operating trends are continuing into July, giving us confidence that we can sustain increased efficiencies in our operating model.”
In the quarter, Boyd reported a net loss of $108.5 million.
“We are driving strong visitation among high-value players, and the average spend per visit and spend per admission are up significantly,” Smith said. “In general, our core customers have not been deterred by the social distancing measures, limited amenities, or masking requirements.”
In response to questions from analysts, Smith said he has not seen evidence of customers from Boyd’s Las Vegas locals properties being courted by Las Vegas Strip properties, where visitation levels are down due to reduced airline arrivals and lost convention and meetings business due to the pandemic.
In an interview following the conference call, Smith said the whole market will suffer due to the loss of the Consumer Electronics Show, which earlier in the day announced it was cancelling its 2021 tradeshow in January, originally scheduled for the Las Vegas Convention Center.
With lower visitation, two of Boyd’s locals’ properties with large hotel facilities off the Strip, Orleans and Gold Coast, were still contributors to the bottom line.
“When you factor out the softness in that segment of the business at these properties, our local customers performed similarly to our Midwest and South customers, with strong visitation trends and increased spend patterns across the Valley,” Smith said.
Smith said in an interview the company doesn’t anticipate any additional layoffs following a staffing reduction earlier this month. Boyd said the layoffs were “at the lower end of the range outlined” in WARN Act letters the company sent to employees in 10 states in early May.
Shares in Boyd closed at $22.11 on the New York Stock Exchange Tuesday, up 48 cents or 2.22%.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
