The STRAT on the north end of the Strip has yet to see any benefit from the opening of nearby Resorts World in June, but Golden Entertainment executives said that more guests will eventually arrive, as they also touted a planned golf attraction on seven acres next the resort.
In October, Golden announced a deal with Flite Golf & Entertainment that plans to build a $70 million four-story golf attraction called Atomic Range. The 92,000-square-foot indoor golf attraction will have 103 hitting bays. Construction will start next spring and be completed by the end of 2023.
The STRAT will share in the revenue, but executives are mainly counting on Atomic Range to keep hotel guests on the property and attract additional visitors from downtown and the Strip, as well as Las Vegas residents.
Golden Entertainment President and Chief Financial Officer Charles Protell said in a third-quarter earnings call that The STRAT will get about 5% of the revenue, which would amount to $3.5 million to $5 million a year from the golf amenity, but that’s not the focus.
“The focus is more on driving bodies to the property with somewhere between 700,000 to 800,000 additional visitation. We believe it adds another amenity that is meaningful to our side of the Strip.”
Chairman and CEO Blake Sartini said The STRAT has a 4,000-car garage that accommodates the additional traffic. The facility will keep hotel guests on site and attract others who will spend money on food and beverage in addition to gaming.
“That design is providing a confidence level that we can generate some significant spending from the visitation from the Atomic Range,” Sartini said.
During the third quarter, revenue at The STRAT was up 50% compared to 2020, while adjusted earnings were up 150%.
The STRAT’s occupancy was 73%, even without strong midweek room sales, Protell said. It was 50% during the third quarter of 2020. Historically, occupancy is 90% during the quarter, he said.
Without that midweek traffic, there were 35,000 missing room nights during the quarter and 70,000 over the last two quarters, worth an additional $10 million in hotel revenue a year. That’s not including additional spending from guests, Protell said.
“That’s why we feel very strongly that the property that is running $6 million a month in (adjusted earnings) could be a $100 million property once the town comes back and once we see citywide group business come back to 2019 levels.”
When asked about the impact from Resorts World that opened in late June, Protell said it’s too early to tell. “But we really haven’t seen much of an impact at all.” Without citywide convention business and international travel, Protell said they haven’t seen the full potential of Resorts World.
Sartini cited construction on the Las Vegas Strip for impacting foot and vehicle traffic and as that work ends and conventions return, Resorts World will capitalize, especially with its upcoming entertainment residencies.
“All of that will benefit The STRAT,” Sartini said.
Golden Entertainment reported $282 million in revenue and adjusted earnings of $73 million, both third-quarter records. Adjusted earnings were 70% higher than the third quarter of 2019.
Protell said not only was there a strong performance at The STRAT, but at its two other Las Vegas properties, along with Laughlin and distributive operations in Montana and Nevada.
In Laughlin, revenue rose 20% and adjusted earnings rose 24% compared to 2020, Protell said. October got off to a strong start with 28,000 attending the return of concerts, he said.
