Four Station Casinos Properties in Las Vegas May Never Reopen

  • CEO and chairman Frank Fertitta III made his comments during a Q2 earnings call
  • Texas Station, Fiesta Henderson, Fiesta Rancho, and Palms remain closed 
  • Despite a 77.5% drop in Q2 revenue, EBITDA was up 47% compared to 2019
  • Fertitta gave Station Casinos’ gaming core as reason for the robust performance
Palms Casino Resort
Four Nevada resorts owned by Station Casinos, including the off-Strip Palms Casino Resort, may never reopen, according to company CEO Frank Fertitta. [Image:]

Comments made during earnings call

Frank Fertitta III, the CEO and chairman of Station Casinos’ parent company Red Rock Resorts, has cast doubts over whether four of his Las Vegas resorts will ever reopen.

 We don’t know if, or when, we’re going to reopen”

“We don’t know if, or when, we’re going to reopen any of the closed properties,” Fertitta said during a Q2 earnings call on Tuesday.

Texas Station, Fiesta Henderson, Fiesta Rancho, and the Palms Casino Resort closed on March 17 following Nevada’s COVID-19 shutdown order, meaning they have been shuttered for over 130 days. Red Rock’s CFO Stephen Cootey said data showing healthy demand at reopened resorts would need to be studied by the company before deciding to reopen any of the resorts.

Meeting the COVID-19 challenge

Despite reporting a 77.5% drop in Q2 revenue, Fertitta said the company was “very pleased” with results, citing its ability to “move some of the play from the closed properties to our existing properties.”

Station properties that have opened in recent weeks include Boulder Station, Green Valley Ranch, Palace Station, Red Rock, Santa Fe, Sunset Station, and Wildfire.

Underscoring how the pandemic challenged his organization to “rethink everything we do,” Fertitta pointed to Station’s 16 casino properties that reopened in June. One of the results of the forced “streamlined cost structure” applied to the operational Las Vegas-area resorts was that earnings before interest, taxes, depreciation and amortization, (EBITDA), were up 47% compared to the same period last year.

Sink or swim

During the conference call, Fertitta also stressed the importance of Station Casinos being “primarily a gaming company” in explaining why it posted robust numbers for June.

“Primarily, 80% of our business comes from the casino, so we’re able to have the results that we had in the short-term without strong hotel, catering and convention,” he explained. “Hopefully those will return as we get the COVID-19 crisis under control, but our primary business is suburban Las Vegas local business.”

survival of the fittest going forward”

Nehme E. Abouzeid, president of consulting firm LaunchVegas LLC told the Las Vegas Review-Journal in an email, “The shutdown has forced every operator to take a hard look at the profit and loss statements of each business unit. It will be survival of the fittest going forward with no sacred cows.”

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