Las Vegas Sands (LVS), the proprietor of The Venetian and The Palazzo, pledged to compensate its employees until October 31. During this time, the company will also maintain payment of employee benefits.
Sheldon Adelson, the Chairman and CEO of LVS, also notified his team that LVS is the unique casino operator that hasn’t furloughed or laid off workers due to the coronavirus pandemic.
Tough times for Las Vegas Sands
Adelson communicated his commitment to compensating his employees in a letter. He conveyed:
The pandemic has altered not just our business operations, but virtually every aspect of our daily lives. Despite these changes, our dedication to you remains steadfast. Thus, even amidst a decrease in business demand, we are affirming our promise to uphold pay and benefits until at least October 31.
The message followed comments made by the company’s president and COO, Rob Goldstein, reflecting on the current situation in Las Vegas. During the recent earnings call, Goldstein expressed his concern saying that he had never felt more negative about what’s happening in Las Vegas. He also stated, “we’re in a world of hurt here in terms of Las Vegas.”
Nevada casinos are experiencing a unique period.
LVS, along with all other casino operators, recorded significantly lower earnings in the second quarter compared to the previous year. The casino revenue for LVS dropped by 87.5% from the same period last year in Las Vegas.
It gets worse. The Venetian and The Palazzo reported a 94.2% drop in hotel room revenue compared to the second quarter of 2019. Food and beverage revenues also took a hit, decreasing by 93.3% from the previous year, though slightly less drastic.
While the company may have moved past the year’s most challenging period, it is still far from returning to normalcy. The Palazzo tower remains closed on weekdays due to insufficient demand. Furthermore, both Lagasse’s Stadium and Morels Steakhouse, located at The Palazzo, have permanently shut down.
The Venetian is open every day.
Sands sets the gold standard among casino operators
LVS is not unfamiliar with the concept of paying employees during slow business periods. Earlier this year, Adelson, a casino operator, stated that employees should still receive their pay even when the businesses are closed.
Adelson backed up his words with action by continuing to pay Sands employees while its Nevada casinos were closed to help curb the spread of the coronavirus.
Even though the company anticipates difficulties, LVS is determined to continue paying its employees while other casino operators persist in laying off workers.
While furloughing and laying off day-to-day staff, the recently merged Caesars Entertainment is also giving raises to its executives.
Coming back slowly
Casinos in Nevada are gradually recovering. Though the rebound is slow, it’s preferable to remaining shut. A collective agreement from earnings calls of various casino corporations reveals that hotel occupancy is around 30% on weekdays and slightly over 50% on weekends.
Casino operators, who usually concentrate on business and international travelers, have shifted their focus to regional guests traveling from California, Arizona, and Utah.
Wynn Resorts CEO, Matt Maddox, described Wynn and Encore as a “super-regional” property at the moment, as many of their customers who usually fly in are avoiding Las Vegas.
MGM Resorts is also concentrating on these customers, leveraging its M Life Rewards loyalty program to present offers to those driving to Las Vegas from neighboring states. Additionally, the company is utilizing this period to consolidate its expenses.
Maintaining just the necessary number of staff during periods of low demand is one method to establish an efficient staffing structure.
Both Station Casinos and Boyd Gaming have observed a shift in their customer demographics since reopening. The companies, who both cater to a substantial number of older clients, have noted a rise in younger patrons gambling, while their older customers stay home to evade the coronavirus.
The recovery of the Nevada casino industry will be a lengthy process. Certain companies, such as LVS, are directing their investments towards their employees, while others prioritize cost-cutting measures to conserve funds.
