Las Vegas Sands, the world’s largest casino company, is painting a bleak picture of the US gambling capital for investors, saying COVID-19 has devastated the city’s bread-and-butter convention business, with no significant recovery in sight.
“We’re in a world of hurt here,” Sands President Rob Goldstein said on a conference call, after the company reported a 97 per cent drop in second-quarter revenue. Sands’ two properties in Vegas, the Venetian and Palazzo, reopened June 4 and generated just $US36 million ($50.7 million) in business during the quarter.
Las Vegas Sands, which runs the Venetian and Palazzo hotels in Las Vegas, reported a 97 per cent drop in second-quarter revenue.
Unlike the global gaming capital of Macau, Vegas is dependent on business and convention groups for much of its revenue. The coronavirus pandemic has put a halt to those, along with leisure travel. And Sands suggested they won’t be coming back quickly, even with progress against the disease.
“The slowest return of our business will be large-scale group business because it tends to skew younger, it’s more tech-driven and those people are more reluctant to travel,” Goldstein said.
Operators in Las Vegas can’t make money with negligible midweek hotel occupancy and half-filled properties on the weekends. Air traffic to the city is less than half of what it was, and the city is looking more like a drive-to, regional market, according to Goldstein.
“Las Vegas cannot perform without a return of these segments,” he said.
Shares of gambling companies tumbled Thursday in New York, with Sands down as much as 5.5 per cent to $US44.25 before recovering somewhat. Wynn, which began furloughing workers in Las Vegas, slumped as much as 3.1 per cent to $US73.74, while Caesars, the largest US casino owner, declined 5.4 per cent to $US36.17. Caesars was taken over this week by much-smaller Eldorado Resorts, which then adopted its target’s better-recognised name.
Wynn had previously continued to pay employees through a three-month pandemic shutdown, and its furloughs were another sign America’s gambling capital faces a long recovery.
“Although we retained all of our people while we were closed, we now know how challenged business volumes in Las Vegas are and are staffing to the significantly reduced demand,” Wynn said in a statement Wednesday.
The company, which reopened its two Las Vegas properties on June 4, declined to say how many employees will go on unpaid leave, but said it’s in the single digits as a percentage of total staff. As of December 31, Wynn had approximately 30,200 employees, with about 13,800 in Macau and 16,400 in the U.S.