Caesars Entertainment Reports High Occupancy Rates, the Return of Business

During its Q2 2021 earnings conference call, Caesars Entertainment revealed that the company had an exceptionally great quarter. Total occupancy for Q2 was 89% with weekend occupancy at 99% and mid-week occupancy at 85%.

“We delivered these outstanding Las Vegas segment results despite operating with capacity and social distancing restrictions for the first 2-plus months of the quarter,” said Anthony Carano, president and chief operating officer. “In addition, we had minimal group business and weak table hold in the quarter.”

For the second half of 2021 and into 2022, Caesars remains optimistic, expecting groups to begin returning to Las Vegas in force.

“Group and convention revenues on the books for the second half of '21 versus '19 are currently pacing up approximately 18%,” Carano added. “2022 group revenues on the books are pacing up approximately 15%.”

Specifically, CAESARS FORUM currently has 176 events booked that represent 1.7 million room nights and $657 million of revenue for future periods. Interestingly, 76% of this business is brand new to Caesars.

Additionally, the company has now integrated its Caesars Sportsbook online betting app with Caesars Rewards which allows customers to place bets either online or in physical casinos while still earning loyalty rewards. Caesars is labeling this Caesars Digital Segment, and in Q2 of 2021 – this segment generated revenues of $117 million.

Delta Variant

When asked if the company was worried about the Delta variant of COVID-19 hurting business in a significant way – especially in light of the new mask restrictions put into place by the state of Nevada – Tom Reeg, CEO, indicated that Caesars was cautiously optimistic.

“What's going on now with the mask mandate is far less onerous in terms of restrictions that we have dealt with in the last quarter,” Reeg said. “I don't know what impact that [Delta variant] will have ultimately on groups coming back. We had the widely leaked internal memo last week on cancellation rate, which measures a week's worth of reservations. If I get 10,000 reservations and 4,700 cancellations, that's a 47% cancel rate versus what's typically 27%. It's not that we went from 98% occupancy to 50% occupancy. So, we fully expect to remain in the low to mid-90s of occupancy in Vegas through this current situation with the Delta variant.”

Labor Issues

When asked how Caesars is doing with the staffing issues facing all companies within the hospitality industry, Reeg responded that it has been difficult for the company to find enough frontline employees. And while this labor shortage is impacting what they’re able to do, “we’re behaving as if there isn’t some magic date where it’s all going to be better. We’re hopeful that as supplemental unemployment rolls off that the picture will get better.”

The company is also trying to draw in new employees via incentives such as higher minimum wages, referral bonuses, and job fairs.

“We're doing everything we can to find as many employees as we possibly can,” Reeg added. “But there’s a lot of stress to the system, and there are times where we’ve got to pull back on the throttle to make sure that the customer experience endures.”