Resorts World Las Vegas has seen its first full quarter operating on the Vegas Strip. According to the Q3 2021 reports from the Genting Group, Resorts World Las Vegas “achieved revenue of almost USD175.0 million.” Though this translated into $27 million in adjusted EBITDA.
“EBITDA” is an accounting acronym for Earnings Before Interest, Tax, Depreciation, and Amortization. Readers would do well to note that the report has not yet been audited.
Resorts World is the first new integrated resort to appear on the Strip in over a decade. As such, its launch back in June 2021 was a big event. There were vast queues down the street despite the Vegas summer heat. So, the slow performance from the resort is a little disappointing.
$27 million sounds like a lot of money at first. However, Resorts World Las Vegas has cost $4.2 billion to get up and running.
In fact, Genting as a whole lost money this quarter. The report puts some of the blame for that loss on “financing and depreciation” for Resorts World Las Vegas.
That could prove to be bad news for the poker room at Resort’s World.
Poker is one of the first games to go when casinos hit hard times. For example, the Flamingo’s poker room closed temporarily a few months ago. Confirmation arrived this week that the room flew west permanently.
Resorts World’s poker room, however, does remain open. It has also had several PR coups since opening day.
At one end, these coups include small victories like the smooth introduction of daily tournaments. At the other end, there were splashy headlines about Guinness World Record attempts and a live edition of the Galfond Challenge.
Trouble in Paradise, NV
Unfortunately, launching an entertainment business in the middle of a global pandemic is tricky. The bizarre economic conditions haven’t given Resorts World the start that Genting was hoping for.
In fact, the notes to the financial statement read almost petulant in their assessment of Nevada’s mask mandate.
“[Resorts World Las Vegas’s] results in the current quarter were impacted by the State of Nevada’s mandate requiring face masks while in public indoor spaces regardless of vaccination status on 30 July 2021,” the accountants wrote. “Hotel occupancy rate for the current quarter was 54.9%, as several conventions were canceled as a result of the mandate. […]Average hotel occupancy rate during the current period was approximately 56%.”
However, the report does seem hopeful that the widening gyre of amenities will suck in more holiday goers and big spenders.
“The Zouk Nightclub, the Spa, additional retail outlets, and restaurants were opened during the current quarter,” the report says. “Additional retail, restaurants, and The Theatre at [Resorts World Las Vegas] are expected to open in the fourth quarter.”
These openings could help boost revenue.
It is also worth remembering that losing money early in a company’s operation is not unusual. Resorts World is, after all, still finding its feet.
The report is another reminder of how sprawling and arcane casino corporate structures can be.
The Resorts World Las Vegas property is owned by Resorts World Las Vegas LLC, owned in turn by Genting Berhard, an investment company that owns brands like Crockfords, Maxims, Crystal Cruises, Dream Cruises, and Star Cruises. Not to mention a half dozen Genting brands including Genting Energy.
The Genting Group as a whole “reported a loss before taxation of RM278.3 million [~$65.68 million] for the current quarter compared with a profit before taxation of RM60.1 million [~$14.1 million] in the previous year’s corresponding quarter.”
The report from the Genting Group puts this down, in part, to financing and depreciation on Resorts World Las Vegas. However, it also lists several other causes for this nosedive in profitability. These causes include losses on Genting’s partnership with Empire Resorts and the company’s holdings in a Chinese power plant.
In the plus column, these losses were mitigated by the continued successes of Genting’s plantation holdings.
A butterfly flaps its wings in Vegas and, across the world, palm oil prices change.
Featured image source: Flickr by Tomás Del Coro