Dive Brief:
- Caesars Entertainment Inc. posted net revenues of $2.83 billion in the fourth quarter of 2023, up from $2.82 billion during the same period last year, according to an earnings report published Tuesday. The company saw same-store adjusted EBITDA decline 2% year over year in the fourth quarter, though.
- In Las Vegas, where the company operates Caesars Palace and several other notable resorts along the Strip, Caesars saw net revenues decline 5.5% year over year in Q4. Adjusted EBITDA was also down in the market during the quarter.
- Caesars’ Las Vegas segment experienced several one-time headwinds during Q4 that negatively impacted results, President and COO Anthony Carano said during a Tuesday earnings call with analysts. The company remains optimistic about future growth in the market driven by group demand and a robust events calendar, he added.
Dive Insight:
Factors that impacted Caesars’ Las Vegas results in the fourth quarter include a new union contract reached in November, Caesars CEO Tom Reeg shared during the earnings call.
“[W]e were accruing for the new union contract that was signed in the fourth quarter, but the accruals that we had put in place since June 1 were not quite at the level where the contract ultimately landed, so there's a catch-up payment in there,” Reeg said.
He added that the approximately 700 rooms within the Jubilee Tower at Horseshoe Las Vegas, which Caesars is transforming into the Versailles Tower at the adjacent Paris Las Vegas, were completely offline in the quarter as part of the $100 million project.
Caesars saw the declined performance despite Formula 1’s inaugural Las Vegas Grand Prix in November, which Reeg touted as a growth opportunity during a third-quarter earnings call.
In the Tuesday call, Reeg said F1 did provide a 4% lift to Caesars’ Las Vegas EBITDA in the fourth quarter, with luxury properties like Caesars Palace and Paris Las Vegas seeing a more significant bump.
Las Vegas competitors MGM Resorts and Wynn Resorts both posted revenue growth in the market in the fourth quarter, which they attributed, in part, to the F1 race.
Reeg said during the earnings call that EBITDA growth is expected in Las Vegas in 2024. Carano said group and convention demand, specifically, remains encouraging.
Earlier this month, CoStar reported that Las Vegas hotels have seen recent performance growth driven by heightened group demand. And across the country, a resurgence of group business has led to increased hotel profits in markets like New York City.
Carano also noted during the call that the events calendar in Las Vegas — including Super Bowl LVIII earlier this month, which drove record-breaking ADR citywide — remains robust.
Looking ahead to 2025, Reeg said he expects Super Bowl LIX in New Orleans to be another significant growth driver for Caesars. The company is set to open The Nobu Hotel and Restaurant Caesars New Orleans later this year.
