Although Caesars Palace’s Bacchanal Buffet, which underwent a $2.4 million renovation before reopening this week, is reported by ownership to be doing sellout and profitable business, it’s not the beginning of a trend, according to Caesars Entertainment CEO Tom Reeg and Senior Vice President for Finance & Investor Relations Brian Agnew. They told a group of JP Morgan analysts that, in the interest of cost saving, it was likely only one or two other buffets would reopen company-wide.
Toward that end, Reeg stated that one of the key incentives for Eldorado Resorts to acquire Caesars was its loyalty program.
Lead analyst Joseph Greff explained, “Management expects to utilize this database and structure rewards in a way that drives customer acquisition (without the cash promo spend).”
Further evidence of Caesars’ belt-tightening is that, unlike other operators in the sports-betting sphere, the company does not plan to offer high-dollar free-bet promotions to gain market share for William Hill sportsbooks, now that Caesars’ acquisition of William Hill has closed. Greff described Caesars as having “zero interest” in going that route, which has proven costly to sports betting operators vying for supremacy, especially in emergent markets.
On the revenue-generating side of the ledger, Caesars leadership was described as encouraged by recent trends in the Las Vegas market, including the return of Baby Boomers (age 55-plus), a demographic that is still lagging slightly at its regional casinos. Strip occupancies were among the tendencies that surpassed management’s expectations, with the weekend before Memorial Day surpassing even Memorial Day weekend of 2019. Convention-driven business is “still very limited,” but room revenues are said to be benefiting from strong consumer demand, with 70 percent occupancy on Monday nights and 85 percent to 95 percent during the remainder of the week. (It was 72 percent in March.)
Reeg and Agnew also reported an immediate benefit from the lifting of capacity constraints in Clark County and the rescinding of the mask mandate in Las Vegas. They expect results in Atlantic City (which just reinstated smoking in its casinos), New Orleans, Reno, and Lake Tahoe to improve as restrictions are lifted in those markets.
As for non-destination casinos, “Pent-up consumer demand, a higher savings rate, and asset-value appreciation over the past 18 months … continue to drive impressive results,” Greff wrote. Revenues in those markets, according to Caesars, are 15 percent to 20 percent higher than 2019 levels.
