Las Vegas Sands (LVS), the owner of The Venetian and The Palazzo, committed to paying its employees through October 31. The company will also continue paying benefits for its employees for this period.
LVS Chairman and Chief Executive Officer Sheldon Adelson also informed his staff that LVS is the only casino operator that has not furloughed or laid off employees because of the coronavirus pandemic.
Tough times for Las Vegas Sands
In a letter to employees, Adelson expressed his commitment to paying them. He stated:
“This pandemic has not only changed how our business operates; it has changed almost everything about our daily lives. What has not changed is our commitment to you. As such, even in the face of declining business demand, we are extending our commitment to maintaining pay and benefits through at least October 31.”
The letter comes after the company’s president and COO, Rob Goldstein, said, “we’re in a world of hurt here in terms of Las Vegas.” During the recent earnings call, he also said, “I’ve never felt more gloomy than I do today about what’s happening in Las Vegas.”
This is a unique time for Nevada casinos.
LVS, and all casino operators, reported much lower second-quarter earnings than the previous year. Casino revenue for LVS was down 87.5% from the same period last year in Las Vegas.
That’s not the worst of it. Revenue from hotel rooms at The Venetian and The Palazzo was down 94.2% from the second quarter in 2019. Food and beverage were just a little “less bad,” dipping 93.3% from last year.
The company might have turned the corner from the worst part of the year, but it isn’t close to being back to normal. The Palazzo tower is closed during weekdays due to low demand. Lagasse’s Stadium and Morels Steakhouse at The Palazzo have also closed for good.
The Venetian remains open daily.
Sands sets the gold standard among casino operators
Paying employees while business is slow isn’t unprecedented for LVS. Earlier this year, Adelson said that casino operators should pay employees while being closed.
Adelson put his money where his mouth is and paid Sands employees while its Nevada casinos were shuttered in order to help slow the spread of the coronavirus.
Despite the trouble the company sees ahead, LVS is committed to paying its staff while other casino operators continue laying off employees.
Coming back slowly
Nevada casinos are on the rebound. It’s a slow rebound, but it’s better than staying closed. A consensus from different casino corporation earnings calls shows that hotel occupancy is about 30% during weekdays and 50% or slightly better on the weekends.
Casino operators that typically focus on business and international travelers have turned their attention to regional guests driving in from California, Arizona and Utah.
Wynn Resorts CEO Matt Maddox referred to the Wynn and Encore as a “super-regional” property for the time being, since many of their fly-in customers are staying away from Las Vegas.
MGM Resorts is also focusing on these customers. The company is using its M Life Rewards loyalty program to extend offers to customers who will drive to Las Vegas from neighboring states. MGM Resorts is using this time to streamline expenses.
Keeping only enough staff on hand while demand is low is one way to create an efficient staffing structure.
Station Casinos and Boyd Gaming have noticed a change in their respective customers since reopening. Both companies have a large base of older customers. While these customers are staying home to avoid the coronavirus, both companies have noticed more young guests gambling.
The rebound for the Nevada casino business will take a long time. Some companies like LVS are investing in employees while others are more focused on reducing expenses to save money.