Was Grand Prix a financial hit? Gaming numbers will offer clearer picture
Two of the reports we have been waiting to see for months arrive this week.
At the end of every month, the Nevada Gaming Control Board releases gaming win statistics that usually are telling about gambling trends statewide and in Southern Nevada submarkets.
A few hours after the Control Board’s statistics are released, the Las Vegas Convention and Visitors Authority reports its visitation numbers for the month. Its report includes the categories of occupancy rates and average daily room rates for Strip and downtown hotels.
Separately, the Clark County Department of Aviation reports its own monthly passenger numbers, figures that are included in the LVCVA report.
The reports expected to be released by around midweek are highly anticipated because they’re for the month of November — the month during which the Formula One Las Vegas Grand Prix blasted into town. Anecdotally, resort operators have been crowing about the success of the city’s first F1 event to use the bulk of the Strip. The reports are expected to quantify some of the financial aspects of the event, possibly swaying opinion on F1’s long-term viability.
Deeper dives into financial results will come in late January and early February when publicly traded companies release their fourth-quarter earnings reports. Most eyes and ears will be on earnings calls from Caesars Entertainment Inc. and MGM Resorts International, the biggest Strip players, although it’s possible we also would get some insights from Bally’s Corp. (Tropicana), Golden Entertainment Inc. (The Strat) and locals companies Red Rock Resorts Inc. and Boyd Gaming Corp.
It’s a good bet that numbers are going to be higher than a typical November — but how much higher?
Over lunch, an analyst friend of mine and I made our guesses as to how high they would be. I suggested 15-20 percent higher than normal for the average daily room rate and 5 percent higher on gaming win.
My friend took the over.
The Clark County Commission has promised to analyze the costs-benefits figures for F1 and report them publicly. The public hopes that analysis will include losses suffered by local small businesses and restaurants in addition to the profits generated for Strip resorts.
The November figures also will be important as a baseline looking ahead. How much different will November 2024 and November 2025 figures compare with this year?
Room rates, it can be presumed, may be lower than this year because many resorts found themselves lowering room prices as the date of the race grew closer. But a case could be made that they will be higher because this year’s event was good enough that it will stimulate demand and draw the F1 crowd back in greater numbers in the future. It’s something we’ll have to wait and see.
Meanwhile, gaming win and visitation numbers should continue to grow in December and beyond because Las Vegas will have added hotel room capacity thanks to the back-to-back openings of Durango and Fontainebleau in early December.
The market will have roughly 2.5 percent more rooms to fill, approximately 156,100 total.
The last time Las Vegas had two resort openings so close to each other on the calendar was in October 1993 when Treasure Island and Luxor opened nine days apart.
The openings of Durango on Dec. 5 and Fontainebleau on Dec. 13 were a contrast in styles, driven by the customer base they serve.
Locals-driven Durango opened in its southwest Las Vegas neighborhood on a Tuesday morning and, throughout the day, had a steady flow of customers enjoying a bright and airy environment resulting from floor-to-ceiling glass windows that let outside daylight in.
The north Strip Fontainebleau was bathed in luxury with the public entering only after VIPs gathered for an invitation-only party.
Both openings were festive and exciting in their own way. Fontainebleau may get higher critical marks because of sheer volume with the Strip megaresort having 18 times more rooms than Durango — and a price tag nearly five times higher, $3.7 billion to $780 million.
Both should be successful, with Fontainebleau having the higher financial bar to clear to reach that success.
But both are welcome additions to the community and should have many months of success in 2024 and beyond.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.