Red Rock Resorts, Inc. (NASDAQ:RRR) Q3 2023 Earnings Call Transcript

Shaun Kelley: Great point. Thank you for pointing that out. And then my other question would just be sort of behavior kind of behind the scenes as you dig into what you saw in Q3. I think what we heard broadly speaking, around the casino landscape has been up in rated play. And I think you called out a couple of segments that were strong for you, down still a little bit as you see some normalization in unrated. Is that a fair characterization when we just sort of decompose your casino revenues I think were down roughly 3% year-on-year if we just look at that casino line? Is that still kind of the broad prevailing behavior? Any nuance to that?

Frank Fertitta: Yes. Look, I think you nailed it. We see relative consistency in the trends. We did have some disruption impact at GVR. We have a new slot and a new table games high-limit room coming online. So we kind of had to move those customers to temporary locales within the property while we are bringing on those new products. So it did have a bit of impact. We think we outperformed the market in the quarter. And as we kind of take a peek into the fourth quarter, we like the trends so far.

Sean Kelley: Thank you very much.

Operator: Next question comes from Jordan Bender with JMP Securities. Please go ahead.

Jordan Bender: Thanks for taking my question. Nice acceleration hotel revenue during the quarter. Just kind of looking to the first half of the year, occupancy trending near pre-pandemic levels. I assume it kind of ticked up year-over-year as well here. But as we look forward, is there anything telling us that occupancy will grow off of this base? Or should we expect this to be more rate driven into 2024? Thank you.

Stephen Cootey: Yes. I can take this one. I mean right now, I think we’re right around 86% or 86.2%. It’s still below our historical highs because we’re still looking to get our group and sales business back.

Jordan Bender: Okay. And then just on the follow-up, I know there was quite a bit of weather, fires in hurricane in the Valley during the quarter was any operations impacted from those weather events? Thank you.

Stephen Cootey: No. No. We operate as normal.

Jordan Bender: Thank you very much

Operator: Next question comes from Steve Wieczynski with Stifel. Please go ahead.

Steve Wieczynski: Yeah. Hey, guys. Good afternoon. So Steve, I just want to be clear here, I think you said this, but there were no operating expenses related to Durango that hit the income statement in the third quarter, meaning those — those essentially were all in that write-down line. Just trying to make sure that margins here are on a like-for-like basis, and there’s nothing we really need to strip out and then somewhat unrelated, Steve, just wondering what drove the corporate expense line down about 10% year-over-year?

Stephen Cootey: Yes, I think you actually — you kind of led me the question. So the one expense we recognized that was — it probably shouldn’t have been where it was, was in corporate. So there was some preopening expense that we reclassified from corporate this quarter into the Durango project, and that caused the reduction into corporate. But to your point, no other expense related to the Durango opening has led into the operations.

Steve Wieczynski: Okay. Got you. Thanks. And second question, Steve, in your prepared remarks, you talked about group sales — you mentioned those. We’re kind of pleased with how those are trending right now heading into next year, but they were pretty high-level remarks. Just wondering maybe if you could provide a little bit more detail about those group sales heading into next year?