[ad_1]
Caesars Entertainment Corp. announced Wednesday that it should offset an increase of $ 80 million in labor costs this year with recently announced company-level layoffs and fewer gifts.
Last month, the station operator announced that it would reduce annual labor costs by $ 40 million by removing some positions within the company, such as as finance, legal and marketing. In a call for results Wednesday, he said it could further reduce costs this year.
"Thanks to the combination of these efforts (departmental cuts) and additional efficiencies in marketing and manpower for the entire year, we plan to be able to to successfully offset the $ 80 million annualized workforce and we now anticipate margin growth on an annual basis, "said chief financial officer Eric Hession to Wall Street analysts.
Striptease operators face rising costs as revenue growth remains low, prompting them to look for new ways to increase deficiencies and profit margins.
MGM Resorts International announced earlier this week that it had eliminated 1,000 jobs in June in an effort to boost profits. Caesars has already cut real estate employment by 12 percent since 2014, Hession said.
Last year, Caesars and MGM signed a new five-year contract with culinary syndicate Culinary Local 226, which includes pay increases. Hession said that Caesars was also under pressure on labor costs in the Midwest due to a tight job market. Unemployment in the United States is close to its lowest level in 50 years.
"This is largely due to a lack of manpower – or difficulties in finding great talent in many of these markets – and, as a result, an increase in the price of labor. work, "he said.
The chief financial officer said the company would continue to improve marketing costs – such as equipped rooms and food – through better technology. However, gains in marketing efficiency will be less than those of previous years, he added.
"We are always trying to improve the way we can market our customers. We have significantly changed the amount we give back to our customers, "he said.
150,000 additional nights
Hession reported that the company's non-group bookings in the second quarter represent approximately 150,000 more overnight stays compared to the same period last year. Higher hotel bookings will result in increased revenue from food, beverages and games, he said.
At the end of last year, Caesars began aggressively marketing its Las Vegas rooms to vacationers as a result of a low conference and entertainment schedule in the third quarter, which resulted in a sharp decline of his turnover.
Hession stated that these efforts had paid off in the first two quarters of 2019 and provided that the company would continue to follow this strategy for the remainder of the year.
However, Hession said Caesars was not increasing its forecast of revenue growth for Las Vegas 2019 by 2.5%.
Higher occupancy
Larger occupancy and percentage of stake in the game enabled Caesars to increase net sales in Las Vegas by 5.8% in the first quarter, the company said on Wednesday.
Caesars said its net business figure in Las Vegas had reached 953 million USD, against 903 million USD for the same period last year. Its occupancy rate for hotels in Las Vegas rose 250 basis points to 95%, while revenue per available room increased 4.9%. The higher holding percentage accounted for about half of Las Vegas' net income gains.
Las Vegas cash flow jumped 12% to $ 360 million from $ 321 million in the same quarter last year.
The resort operator's regional revenues also increased, with the acquisition of Centaur offsetting stiffer competition in Atlantic City and the temporary closure of Midwest casinos due to poor weather conditions.
Caesars' net revenues at the corporate level increased by 7.3% to $ 2.12 billion. However, the company's quarterly loss was $ 217 million, up from $ 34 million in the first quarter of last year. The largest quarterly loss results from a $ 322 million change in the fair value of a derivative security.
Contact Todd Prince at 702-383-0386 or [email protected]. To follow @toddprincetv on Twitter.
[ad_2]
Source link