LAS VEGAS (KTNV) — "Taking one for the team."
That's how Golden Entertainment, who owns The STRAT, described Formula 1 week.
On Thursday, during a fourth quarter earnings call, President and Chief Financial Officer Charles Protell said the race didn't boost their bottom line.
"Unfortunately, we did not see any benefit from the Formula 1 initial race in Las Vegas with The STRAT's EBITDA down about $800,000 year-over-year," Protell said. "Despite the disappointing F1 experience for us, STRAT occupancy in Q4 was 79%, up 2% over last year, with the weekends full and the midweek occupancy improving but still low compared to 2019."
Despite not meeting expectations this year, Chairman and Chief Executive Officer Blake Sartini said a group of operators are working with F1 to figure out ways to expand activities to other parts of the valley ahead of this year's race.
"There is an organized, non-mid Strip co-op that is working together. There is a significant number of people involved and operators involved working with F1 to activate more of the city during the event," Sartini said. "I personally think it was a great event for the city. I think taking one for the team last year was probably something that, knowing what we know now, we would do again. But going forward, we want to work with them to be more involved in the activities around that week or 10 days and this co-op of these non-mid Strip operators, I think, will be successful to gain traction and certainly be better than last year."
Some of the suggestions that Protell said they've floated by F1 include selling individual day tickets instead of packages, making start times earlier, and allowing dedicated casino areas so it's easier for guests to access.
"I think there is a general acknowledgement that the event needs to appeal to more than just high-end properties on center Strip that are connected to the event to make it a real success for all of Las Vegas," Protell said.
It's a sentiment echoed by MGM Resorts International Chief Executive Officer and President Bill Hornbuckle. During the company's recent earnings call, he said they will be more cautious about operations outside of the premium properties along the track.
"The South Strip, we'd probably treat like a normal weekend moving forward because of the lack of activation there," he said.
RELATED LINK: Big events boost MGM Resorts International to record fourth quarter profits
While start times aren't getting any earlier for this year's race, Formula 1 officials are looking at cheaper ticket prices, more general admission tickets, and single-day tickets.
"This is largely driven to accommodate the lower-end properties on the Strip and bring downtown into the mix," Renee Wilm, the Chief Executive Officer of the Las Vegas Grand Prix, said this week. "We are working with the LVCVA to engage downtown with activations and watch parties so everyone can benefit."
Another factor Golden Entertainment said played a role in lower revenue in the fourth quarter was renovations at the STRAT. The company has put in over $30 million in renovations since last March.
"In October, we completed the renovation of the STRAT's original 118-room tower, the last of the major upgrades to the property, bringing out total renovated rooms to 1,300," Protell said.
According to Protell, room renovations led to a shortfall of 125,000 room nights compared to a normal year, which equates to about $40 million in revenue.
However, he added attractions like Atomic Golf should help bring more customers to the property. Atomic Golf is scheduled to open on March 22.
