STRAT renovations set up for F1, Super Bowl success, Golden Entertainment says
Nov 2, 2023
LAS VEGAS (KLAS) � Revenue is up 8% at The STRAT, 537 room renovations are done, and a new neighbor down the street � the Fontainebleau � is expected to bring more foot traffic to the resort that features the fifth-tallest structure in the U.S.
Golden Entertainment, the company that owns The STRAT and P.T.'s Taverns reported $257.7 million in revenue during the third quarter, down 7.6% from 2022. But the completion of most of the room renovations is fueling high expectations, along with the January debut of the $70 million Atomic Golf attraction.
"We feel that the property is now well-positioned to capitalize on the high-traffic events like F1 and Super Bowl coming to Vegas over the coming quarters and beyond," Charles Protell, president and chief financial officer of Golden Entertainment, told investors on the Q3 earnings call.
Like other hotel operators, Golden Entertainment is watching the ongoing negotiations between the Culinary Union and the largest resort operators on the Strip.
About 850 of The STRAT's 1,800 employees are union members. "We feel like we have good union relationships, so we expect that to go fairly smoothly for us once that contract gets ironed out with the bigger guys," according to Charles Protell, president and chief financial officer of Golden Entertainment
Blake Sartini, chairman and CEO of Golden Entertainment, said the company began saving for the expense in June.
Earnings of $53 million were down by about $8 million. That's mostly because Golden Entertainment sold off its Rocky Gap resort in Maryland as it consolidates operations in Nevada and the West.
The company also operates Laughlin's Aquarius Casino Resort and Edgewater Casino Resort, as well as two Arizona Charlie's casinos in Las Vegas and three casino properties in Pahrump. Golden Entertainment is in the process of selling its slot route business in Nevada, and has completed the sale of its Montana slot routes.
Pahrump casinos were without traffic from Death Valley after floods damaged California Highway 190 in August. The park didn't reopen until Oct. 15.
And the tavern business saw expenses go up 7% as the minimum wage increased in Nevada. Tavern revenues were described as "flat" during the summer months, when business is typically slower. Still, Golden reports that the last eight taverns it has opened are generating a return on investment of 25%.
The company expects to complete the purchase of four more taverns by the end of the year, and two more early next year. It's also exploring sites for future tavern development.
