Boyd Gaming Corporation, who owns 10 properties across the Las Vegas valley and 29 properties nationwide, may not be reopening its three downtown properties right away once Governor Sisolak lifts the shutdown order on casinos in Nevada.
Since downtown Las Vegas relies heavily on tourism, Boyd’s three down properties, California Hotel, Main Street Station, and the Fremont Hotel, may most likely have to wait until tourism starts to ramp back up downtown before they can open their doors to the public again.
Boyd’s California Hotel, for one, relies heavily on Hawaiian tourists for business. Las Vegas is also referred to as the “Ninth Island” for many who either visit from the state or have come to make Las Vegas their home. California Hotel gears its marketing specifically toward its Hawaiian crowds, with specific cultural events and dining options.
Boyd Properties Rely a Large Percentage of Business on Local Retirees
Just a couple of weeks ago, Boyd Gaming’s CEO Keith Smith said he believed that local casinos could be the driving force behind Las Vegas’ rebound.
According to Smith, the last time Las Vegas experienced an economic downfall was the recession period between 2008-2009, and what that situation proved was that the Strip didn’t refuel the locals market.
Although Strip properties were able to rebound quicker during the 2008 financial crisis, Boyd Gaming Corp. doesn’t see the same thing happening with the pandemic causing more worries to arise in travelers.
With confidence in air travel wary amid the coronavirus pandemic, the local market could very well prove to be Las Vegas’ saving grace once casinos reopen soon.
Boyd’s properties outside of downtown Las Vegas, including The Orleans, Gold Coast, Suncoast, Aliante Casino, Eastside Cannery, Cannery, and Sam’s Town, rely heavily on local retirees for their business.
“Those retirees didn’t have a job before this started, don’t have a job now. They still have their income,” Smith pointed out.
Local Gamblers Will Want to Return Once Casinos Reopen
With many Las Vegas residents having cabin fever due to stay-at-home orders, especially retirees without work, it’s predicted that many will want to drive down to their nearest local casino once they’ve been given the green light to reopen.
The local market will be vital in Las Vegas’ economic rebound, as it’s unsure how the Strip properties will do, especially since their business relies heavily on out-of-state and international visitors.
Boyd properties, on the other hand, doesn’t see much visitation from international guests.
Josh Hirsberg, Boyd’s executive vice president and CFO, pointed out that people aren’t going to want to travel. He believes that most people are just waiting to get back to “normal life,” or what they considered to be normal before the coronavirus hit.
Hirsberg said that for the locals market, that returning to normal can happen “pretty quickly” with Boyd’s properties.
Boyd Gaming Experiences 18% Revenue Drop in First Quarter
It’s no surprise that Boyd Gaming and other casino operating companies have experienced big revenue drops in the first quarter due to the pandemic.
According to preliminary results, Boyd Gaming’s revenue dropped 18 percent to $680.5 million for 2020’s first quarter.
Even with the revenue drop, CEO Keith Smith believes the company is in a good position to sustain itself throughout the shutdown. The company even plans to come out on the other side “more efficient” and “operationally-focused.”
In an effort to save on payroll costs, Boyd furloughed many of their team members. A common move for casino properties in Las Vegas to combat the economic downfall caused by the closures. Company executives are also expected to see “significant salary reductions.”
It will definitely be interesting to see what happens when casinos reopen in Las Vegas. In the same fashion as Boyd Gaming, casino operators on the Strip are also planning on not reopening all of their properties at once, such as Caesars Entertainment and MGM Resorts.
Whether downtown Las Vegas will take a while to rebound or not is something we’ll have to wait and see about.
Do you think tourism will return once casinos reopen in Las Vegas? Share your thoughts with us below!