As the Covid-19 pandemic and its worst effects begin to recede, Nevada-based casinos hope to extend the momentum gained in record-setting 2021 through to the new year. At least that was the impression executives for major companies left after an investment forum this week at Wynn Las Vegas, reports Las Vegas Review-Journal.
As Nevada casinos set an all-time record of $13.4 billion win last year, with December marking a 10th straight month over $1 billion –now extended to 11 straight months-, there is little room for doubt on whether the industry is rebounding: many companies are not only reaching pre-Covid levels but, in some cases, even surpassing them.
“Demand is strong and highly correlated with virus trends,” said of Caesars Joe Greff, a gaming industry analyst for J.P. Morgan, according to the cited source. “Inflation, which has been around for several quarters now, has had zero impact on demand, and management anticipates any potential weakness in spend-yield to be offset by the continued improvement in visitation.”
Greff has now published a series of reports following the executive presentations at the J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum. The reviews confirm companies are showing favorable business calendars, with two key takeaways to pay attention to: consumer demand is strong, and younger customers are making their way to casinos.
While Caesars announced last month it would be cutting back its marketing efforts, Greff points out that this is due to its sportsbook product having accomplished its customer acquisition targets faster than expected: the gaming giant has launched “a brand that is synonymous with sports betting,” with a strong sense of loyalty, according to the report.
But Caesars is not the only Vegas operator expecting strong group business over the course of the year. After a minor hit from the omicron variant, MGM Resorts now has a positive outlook on the consumer, with demand inflecting positively beginning in October.
The company has seen a strong demand in leisure-weekend, and business buildup in Q1 and into Q2 for group-midweek demand, with management now expecting to be at 90% of pre-Covid level by year-end 2022. Meanwhile, for 2023, group business “should be at or above 2019,” Greff wrote, according to Review-Journal.
Wynn Resorts is also seeing strong forward bookings from leisure customers, as longer-term investment has allowed them “to double down on the younger and more affluent demographic,” bringing the average customer age down eight years.
“Management feels confident about their ability to take price going forward,” Greff reported. “On the labor side, the full-time equivalent count is down relative to 2019 levels, but Wynn expressed continued confidence regarding hiring referencing thousands of applicants, a relatively positive sign that we have not heard from peers.”
The business is also seeking to advance on a multibillion-dollar integrated resort development on Al Marjan Island in Ras Al Khaimah, United Arab Emirates, announced in January. With over twice the airlift capacity of the Las Vegas market, and about 85 million passengers per, the opening of the property would allow 95% of the global population to access a Wynn venue within an eight-hour flight.
Boyd Gaming and Red Rock Resorts have both indicated they found greater stability amid sustainable demand and normalized business trends. Steve Cooter, CFO for Red Rock, said management has seen a nice inflection in demand following removal of the mask mandate in February.
Boyd has noted “the younger demographic came back” as omicron cases eased, while it does not expect gas prices to have a significant impact going forward given the localized and drive-to nature of its properties. Red Rock has too posted solid retention across the younger base, which remains above pre-Covid. Spending per visit is also above 2019 levels, with strong demand on weekends.
Lastly, Las Vegas Sands, which last month exited the Vegas market upon completion of a $6.25 billion sale of The Venetian, Palazzo and Venetian Expo to Apollo, now focuses on its Asian operations. While Singapore is anticipated to benefit from a higher level of Covid-19 vaccination, Macau remains a fairly uncertain market, although Sands expects an eventual return of demand.
Original article: https://www.yogonet.com/international/news/2022/03/10/61743-nevada-casinos-expected-to-extend-momentum-in-2022-amid-strong-bookings–younger-demographic-demand
