Renovations at Las Vegas’ The Strat drive Q2 revenue decline for Golden Entertainment

Golden Entertainment, operator of Las Vegas’ The Strat Hotel, faced a challenging second quarter with a decline in both revenue and earnings. The setbacks were primarily attributed to strategic room renovations, which rendered several Strat rooms offline throughout the quarter that concluded on June 30.

The Las Vegas-based gaming and hospitality firm reported total revenue of $286.7 million and a net income of $12.3 million for the second quarter. The overall revenue experienced a decline of approximately 4% compared to the previous year.

It also reported an Adjusted EBITDA of $58.4 million in Q2 of 2023, compared to $75 million in the second quarter of 2022. However, the results were up on a quarterly basis, as in the first quarter of 2023, the company reported $278.1 million in revenue and $11.6 million in net income.

Specifically at The Strat, the revenue decrease was more significant, reaching 10%, primarily due to around 15% of the rooms being unavailable during the quarter, the report said. As per 8 News Now, the company incurred a revenue loss of around $40 million as a direct consequence of ongoing renovations that resulted in the elimination of 50,000 potential room nights for guests.

During an earnings call with investors, Blake Sartini, Chairman and Chief Executive Officer of Golden Entertainment, said the company is making every effort to ensure a smooth transition as the last set of rooms is scheduled to come online by the end of September. The company’s primary focus for the renovations has been on upgrading the Strat pool and 537 rooms.

As the highly anticipated events of F1 and the Super Bowl approach, Golden Entertainment is seeking to capitalize on its freshly updated rooms. Charles Protell, President and Chief Financial Officer of the company, revealed that these upgraded accommodations are fetching $20-$25 more per night, presenting a promising revenue opportunity during these high-profile occasions.

During the second quarter of this year, Golden Entertainment successfully concluded the sale of its Rocky Gap Casino Resort in northern Maryland for $260 million. In addition, the company made headlines by announcing a $322.5 million agreement to sell its slot routes in Nevada and Montana to J&J Ventures Gaming of Illinois. The completion of this deal is anticipated to take place by the end of the year. The routes accounted for a little less than a third of Golden’s revenue in 2022.

In addition to The Start, Golden Entertainment owns two more Las Vegas casinos, Arizona Charlie’s Decatur and Arizona Charlie’s Boulder. Golden also owns Laughlin properties Aquarius Casino and Resort and Edgewater Casino and Resort, along with three casinos in Pahrump: Pahrump Nugget, Gold Town Casino and Lakeside Casino and RV Park.