Las Vegas Hotel-Casino Giants Fall Short of Q3 Revenue Expectations
Three major Las Vegas hotel-casino operators—Caesars Entertainment, MGM Resorts International, and Wynn Resorts—failed to meet Wall Street’s revenue expectations for the third quarter of 2023. However, the shortfalls were relatively small, and analysts had already anticipated a potential decline in gaming revenue due to the summer season.
Caesars Entertainment’s Revenue Miss
Caesars Entertainment reported $2.87 billion in net revenue for the third quarter, falling short of analyst expectations by 1.5%. Despite a 1.3% year-over-year decrease, Caesars’ Las Vegas hotel revenue still performed solidly, with $1.06 billion in revenue generated just from its properties in Las Vegas.
MGM Resorts’ Slight Increase
MGM Resorts also reported a slight miss, generating $4.18 billion in net revenue. However, the company did see a 1.3% increase in revenue compared to the same period last year. Of that total, $2.13 billion came from MGM’s Las Vegas properties, reflecting solid performance in the city despite the overall revenue shortfall.
Wynn Resorts’ Revenue Decline
Wynn Resorts experienced a 2.4% revenue miss, reflecting the overall trend across the major gaming companies. Though the shortfall was more significant compared to Caesars and MGM, Wynn remains a key player in the Las Vegas market, particularly with its premium offerings and high-end casino properties.
Analysts Express Caution Amid Future Concerns
Despite the small discrepancies between actual earnings and analyst expectations, some Wall Street analysts have expressed concerns about future performance. Chad Beynon, a senior analyst at Macquarie, remains cautiously optimistic about Las Vegas’ non-gaming outlook, pointing to strong group travel and the city’s event calendar as potential growth drivers. However, Beynon warned that slowing leisure travel demand could result in a more competitive promotional environment, which may negatively affect margins for these resorts.
“As we lap events like F1 and the Super Bowl in Q4 and Q1, comparisons become increasingly difficult,” Beynon stated in an investor’s note. “The slowing of leisure demand could hurt margins and increase competition in the promotional space.”
High-Profile Events in Las Vegas
Las Vegas has been working to attract more visitors through high-profile events, including the Formula 1 Grand Prix and the Super Bowl. These events are expected to help offset some of the downturn in leisure travel, though analysts remain cautious about the ongoing competitive landscape.
In total, Caesars, MGM, and Wynn control 19 properties across the Las Vegas Strip, and while their third-quarter results did not meet expectations, the long-term outlook for the city remains tied to both gaming and non-gaming revenue streams. As Las Vegas continues to host major events and attract tourists with its vibrant entertainment and hospitality scene, these casino giants will look to adapt to changing travel patterns in the coming quarters.
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