Record hotel revenues in the second quarter at The Strat helped push Golden Entertainment to second quarter revenue of $167.3m with the company looking to reinvest in the Nevada tavern sector.
Charles Protell, President and Chief Financial Officer, said: “At the STRAT, we achieved record Q2 hotel revenue with ADR up eight per cent and total occupancy up four per cent to 73 per cent for the quarter. Weekend occupancy at the STRAT was 97 per cent and midweek occupancy improved two per cent to 64 per cent. We see opportunity in continuing to improve midweek occupancy as we are still missing nearly 18 per cent of occupancy compared to 2019.
Golden is also looking at options for its Colorado Belle site in Laughlin. The iconic riverboat-themed casino didn’t reopen after the pandemic swith Mr Protell confirming tha it was unlikely that gaming would ever be relaunched at the site.
“It’s approximately 1,000 feet of Colorado River frontage, which does not exist anywhere else along that resort corridor down there. We believe it has significant future value,” Blake Sartini, Chairman and Chief Executive Officer of Golden. “We’re exploring from A-Z what the possibilities are for that piece of property to enhance the already robust room inventory that exists in Laughlin.”
Golden operates the Aquarius Casino Resort and the Edgewater Casino Resort in Laughlin.
The company reported that lower entertainment-related revenue in the second quarter was partially offset by the company’s locals initiatives and bingo program that improved its market share in Laughlin during the quarter. For Nevada Locals Casinos, revenue declined 4.9 per cent and EBITDA declined 13 per cent, primarily due to decreased visitation and spends from lower-tier customers. The largest revenue and EBITDA declines came from the company’s Arizona Charlie’s Boulder property, which caters to its most value-oriented guests.
In addition, road construction negatively impacted entry to the Arizona Charlie’s Decatur property in April and May. Golden Entertainment started modest renovations to the 259-room hotel at Decatur, which should be completed in 2025. Despite lower margins year-over-year, the Locals segment has operated at approximately 45 per cent margins over the last four quarters. For the second quarter, Golden’s Nevada tavern revenue was up three per cent over last year, supported by the purchase of six new taverns compared to the prior year period. This brings Golden’s total locations to 71 at the end of June. It anticipates opening its 72nd Tavern in Q3.
Mr. Sartini added: “In the second quarter, we continued to strengthen our balance sheet by fully repaying our outstanding bonds in April and reducing our interest rate on our term loan in May. We also aggressively returned capital to shareholders through our recurring dividend and repurchasing nearly one million shares. Our healthy operating cash flow and strong balance sheet will continue to provide us with strategic and financial flexibility while we return capital to shareholders throughout the year.”
