Demand does not seem to be diminishing. In fact, the opposite seems to be happening. Total occupancy for Q1 2021 was 63% with weekend occupancy rates at 85% and mid-week rates at 52%. However, March total occupancy was at 77% and April's was 84%, demonstrating a significant and positive rise. Additionally
Events Rebound
“Looking ahead, we remain encouraged by booking trends for the second half of the year,” said Anthony Carano, President and Chief Operating Officer. “Group and convention room nights on the books for the second half of 2021 versus 2019 are currently pacing up approximately 20%, and we're seeing good rate growth as well.”
Additionally, 2022 group revenue on the books is pacing up approximately 15%. According to Carano, Caesars Forum for all future periods has booked more than 165 events, 1.6 million room nights and $633 million of revenues, with 80% of this business being new to Caesars.
“We're very optimistic regarding the remaining three quarters of the year in Las Vegas and the return of the group and convention business and entertainment offerings that will drive incremental demand to the market,” Carano added.
EBITDA Soars
According to Reeg, in April 2021, Caesars Entertainment did more than $300 million of consolidated EBITDA as a company. This is 25% ahead of 2019 numbers. Additionally, the consolidated margin was more than 37% which is 1,000 basis points ahead of 2019.
When looking at specific markets, Vegas set a quarterly record for EBITDA margin at 43.5% and Reno had its third best month ever in April, despite the fact that Easter was in April and its typically not a great month for the casino business.
“If you look on a property basis, in April we had 36 properties in our portfolio that were over 40% EBITDA margin,” Reeg added. “Fourteen of those were over 50% EBITDA margin, and one was over 60%. And as a result, in April, at our current run rate, we're generating over a $100 million of free cash flow per month right now.”
Room Rates Still Recovering
One thing that has not yet recovered to 2019 levels are room rates. According to Reeg, weekends are approximately $20 below 2019 ADR.
“That’s where the return of group business can really help us in terms of compression because it will fill both that mid-week gap and will provide those customers that extend their trip on either end to help us yield on weekends as well,” Reeg noted.
Once room rates and occupancy recover, Caesars Entertainment will be seeing more than $20 million in EBITDA.
Tags: Caesars Entertainment
