Strength іn the Las Vegas Locals market propelled Red Rock Resorts tо a record third quarter for revenue and adjusted earnings. Stephen Cootey, the company’s executive vice president and chief financial officer, said Red Rock approached its historical adjusted earnings margin іn the quarter.
Durango’s Impact On The Las Vegas Locals Market
“Durango continues to grow the Las Vegas locals market, as the team executes and improves the property’s operational performance, while at the same time driving incremental play from our existing customers and attracting new customers to our brand,” Cootey told Wall Street analysts Thursday.
Strong Growth At Durango
During the three quarters of 2024 after opening in December, the Durango increased visitation and net theoretical win in the surrounding area by 91% and 92%, respectively, while signing up more than 70,000 new customers to the database, Cootey said.
Durango Set To Become One Of Red Rock’s Highest-Margin Properties
“Durango is on track to become one of our highest-margin properties and generate a return of 15% net cannibalization through its first year of operation,” Cootey said. “Cannibalization remains in line with our expectations, as impact is primarily felt at our Red Rock property.”
Expansion Plans For Durango
The Durango expansion of $116 million is on tap for the end of the year to add 25,000 square feet of additional casino space, including a new high-limit slot and bar area. The expansion will add 230 slot machines to the floor, including 120 for the high-limit room.
A 2,000-space parking garage will also be added that will provide flexibility for future expansion, Cootey said. The project is expected to take 12 months to complete. There will be some disruption to the south side of the property.
Continued Growth In Visitation And Spending
Cootey said they continue to see strong visitation and carded slot play in the majority of their database, including their regional and national segments. The strong spend-per-visit allowed the operator to earn near-record revenue and show profitability across gaming segments.
Record Revenue In Hotel And F&B Segments
The hotel and food and beverage segments continued to grow and delivered record revenue and profitability in the third quarter. The hotel division had an all-time record of revenue and profit with the addition of higher room rates.
Challenges In Group Business And Catering
Group business, however, faces tough year-over-year comparisons, both the third and fourth quarters. “As we look forward to the fourth quarter, other than playing unlucky in sports in October and soft business in group and catering lines, we’re seeing strength and stability in our core slots and table business in the locals market and in our carded database,” Cootey said.
Tough Comparisons And Super Bowl Impact
When it comes to group bookings and catering, Red Rock President Scott Kreeger added that the operator will have tough year-over-year comparisons in the fourth and first quarters, because of the Super Bowl in February. Beyond that, it will improve through the rest of 2025 and 2026.
“The Super Bowl was a huge benefit to the overall city and we benefited from that as well,” said board member Lorenzo Fertitta. “We actually lost money on the game and hopefully, that won’t be a headwind to be repeated from a comp perspective.”
Presidential Election’s Potential Economic Impact
As for the outcome of the presidential election, executives said the biggest impact would be the no-tax-on-tips proposal that would add about $200 million to the local economy, of which Red Rock would benefit. It would also save the company about $2 million to $3 million in payroll taxes.
