Caesars Entertainment saw a small rise in its net revenue, as the company continues to pursue its “cornerstone initiatives” including room refurbishments and express check-ins.
Caesars Entertainment announced a 1.4 percent growth in revenue year on year, with the figure rising to $963m for the first quarter of 2017. The company attributed this growth to improved hotel performance, particularly in the Las Vegas region.
While the Las Vegas-based casino operator reported a loss of $546m in its first quarter, the company’s stock continues to increase in value, with analysts noting that Caesars shares have climbed 34 percent since the beginning of the year.
“Enterprise wide revenues were up year-over-year, we generated all time record hotel cash revenues [and] grew two out of the three months in the quarter, leading to 9.4 percent year-over-year increase in this vertical,” said Mark Frissora, president and CEO of Caesars Entertainment, speaking during the company’s earnings call.
“The positive impact of our ongoing investments in our properties especially room product is particularly evident in these results.
“We achieved this monthly hotel cash revenue record even with over 90,000 room nights out of service for renovation.”
Management expects that by the end of 2017 more than 50 percent of Caesars’ Las Vegas portfolio will have been upgraded since 2014, while 7,000 rooms will be renovated throughout the company’s US properties during this year.
Caesars Entertainment Resort Properties’ hotel performance benefited as room nights out of service in the first quarter of 2017 dropped to 19,000 compared to 47,000 out of service in the year ago quarter.
However, CFO Eric Hession cautioned that the company is likely to see a reversal in this trend and predicted a negative impact as rooms will be out of service due to renovations in Harrah’s Las Vegas, Flamingo and Laughlin during the second half of the year.
Frissora acknowledged that Caesars’ Vegas venues continue to be the company’s bread and butter. “Our Las Vegas investments continue to be an excellent use of capital representing low risk and high return opportunities,” he affirmed.
However, regional markets as a whole underperformed Las Vegas, which the company attributed to a generally weaker regional economic environment, singling out ongoing weakness in the Louisiana Mississippi region.
Caesars continues to work on its so-called “cornerstone initiatives”, which include areas such as improving the company’s hospitality and loyalty marketing programs and making investments in hotel room, entertainment and food and beverage infrastructure.
“During the first quarter, we continue to focus on growing the number of members in the elite tiers of our total rewards program and enhancing members benefits,” said Frissora.
“First quarter’s spending by total rewards members reflects our success with VIP members spending up 6.8 percent.”
Caesars has been testing express check in and check out kiosks in selected Las Vegas properties and has reported encouraging early results, with the company’s Atlantic City venues next on the list to trial the new system.
“At Planet Hollywood, where we launched our latest generation kiosk hardware, utilisation rates of the kiosk hit 26 percent of all guests within weeks of deployment,” explained Frissora.
“Overall, kiosks are reducing front desk check-in times by 40 percent while improving total service scores more than any other single initiative on record.”
Frissora stated that Caesars is “optimistic” that its majority owned subsidiary Caesars Entertainment Operating Company will emerge from Chapter 11 protection during the second half of the third quarter.
“With the restructuring concluded management will be able to turn its full attention towards strategic priorities and realise the full growth potential of the business,” he added.
