Red Rock Resorts CEO Frank Fertitta said Tuesday the Palms hotel-casino and three other properties in Las Vegas will likely reopen when the company is confident their customer bases will return.
Red Rock Resorts is a publicly-traded company that owns a portion of Station Casinos. The company has four closed properties in Las Vegas including Texas Station, Fiesta Rancho, Fiesta Henderson and Palms Casino Resort. The firm also owns Red Rock, Green Valley Ranch, Santa Fe Station, Boulder Station, Palace Station and Sunset Station, together with its Wildfire properties. It also owns the Graton Casino Resort north of San Francisco.
Fertitta said there were "two buckets" that the properties fall into, the tourist customer base and the customer base of older Las Vegas locals, according to transcripts from his earnings call Tuesday, KTNV reports. "I think the Palms is very oriented towards the tourist market visitation to Las Vegas," said Fertitta, "getting that business to return to normal."
"And in the local properties, we're going to continue to look at how the older demographic response, given the vaccine, and get business back to normal before we do anything unless we're certain that we can be cash-flow positive," he added.
Red Rock Resorts reported Tuesday a $174.5 million loss for 2020, which compares to a net loss of $6.7 million in 2019. Net revenues for the year were down about 36%, dropping from $1.9 billion to $1.2 billion.
The casino operator reported an adjusted EBITDA of $368.5 million for 2020, compared to $509.0 million in 2019. “The decrease in year-over-year adjusted EBITDA was primarily due to the ongoing impacts of the COVID-19 pandemic,” Red Rock said. As with most other Las Vegas resorts, Red Rock has found a solution to fewer customers by cutting expenses in segments of its business that doesn’t yield high profits.
For the fourth quarter, Red Rock Resorts reported net revenues of $343.4 million, a decrease of 25.5% from the same period of the prior year, while net income was $49.6 million, an increase of $42.8 million. Casino revenues amounted to $240 million at its Las Vegas operations — about $15 million less than the fourth quarter of 2019, though Adjusted EBITDA was up 5.5%.
With less revenue and lower expenses from non-casino operations including food and beverage and hotel rooms, the higher margins in casino operations helped the bottom line. Adjusted EBITDA was $150.5 million for the fourth quarter of 2020, an increase of 9.4%.