Posted on: May 4, 2022, 11:27h.
Last updated on: May 4, 2022, 11:54h.
Station Casinos’ publicly traded subsidiary Red Rock Resorts (RRR) missed Wall Street earnings estimates this week. But that didn’t subdue billionaire Frank Fertitta III’s enthusiasm regarding the firm’s next investment in Southern Nevada.
During RRR’s first-quarter earnings call with investors and analysts, Fertitta, who controls Station Casinos and Red Rock Resorts with his brother, Lorenzo, detailed the firm’s Durango project in Las Vegas. Officially called Durango, A Station Casinos Resort, the $750 million undertaking is being built on 71 acres of vacant land on Durango Drive at the 215 Beltway.
Fertitta reasoned of the investment that Las Vegas’ gaming industry has rebounded nicely from the pandemic. The continued migration of Californians to Nevada renders the Durango development attractive.
Station Casinos has long targeted Las Vegas locals with its nine properties in Southern Nevada.
We have A-plus locations where the majority of the growth in Las Vegas is taking place. If you go back five or 10 years, a lot of these customers weren’t in Las Vegas,” Fertitta said on the call. “I think the market has changed pretty dramatically with people moving from California to Las Vegas, and it is a different customer profile than what we were seeing 10 years ago.”
Station Casinos owns and operates nine casinos in the Las Vegas Valley. Three, however, remain closed since the onset of the pandemic — Fiesta Henderson, Fiesta Rancho, and Texas Station.
Durango Dodging Competition
Station Casinos CEO Stephen Cootey discussed construction specifics regarding the Durango casino. The chief executive said the casino site is located within the fastest-growing area in the valley and comes with a favorable demographic that warrants three-quarters of a billion-dollar spend.
Adding to the excitement is that there are no other non-restricted gaming facilities within a five-mile radius of the Durango site. Cootey said progress is being made, and construction remains on schedule, with the resort set to be complete within 24 months.
Durango, A Station Casinos Resort will feature a casino floor measuring 73,000 square feet equipped with 2,000 slots, 46 table games, and a sportsbook. A 200-room hotel, four full-service restaurants and bars, and a resort-style pool are also in the works.
Cootey added that the $750 million — which Fertitta said is a hard cap — is inclusive of all design, construction, financing, and preopening costs and expenses.
“We are extremely excited about this project,” Cootey concluded.
Visitor Traffic Down, But Gaming Time Up
Discussing the company’s financials, Cootey explained that the first quarter experienced a reduction in visitation compared with the same three months in 2021. However, the customers who did patronize Station/RRR casinos more than made up for the reduced visitation by spending more time gambling.
Cootey said time on the device (TOD), a key metric that measures a game’s attractiveness and, subsequently, its profitability, increased from January through March 2022.
“While a combination of omicron and inflationary pressures, offset by the lifting of the mass mandates across the state of Nevada on February 10th, resulted in a quarter-over-quarter reduction in visitation, this trend was more than offset by increased time on device as well as strong spend per visit across our entire portfolio,” Cootey detailed.