Q3 2023 Red Rock Resorts Inc Earnings Call

[music].

Speaker 1: Good afternoon and welcome to Red Rock Resort's third quarter 2023 conference call. All participants will be in a listen only mode. Please...

Good afternoon, and welcome to Red Rock Resorts' third quarter 2023 conference call.

All participants will be in a listen only mode.

Please note this conference is being recorded.

Speaker 1: I would now like to turn the conference over to Steven Cudi, Executive Vice President, Chief Financial Officer, and Treasurer of Red Rock Resort. Please go ahead.

I would now like to turn the conference over to Stephen Curry Executive Vice President Chief Financial Officer, and Treasurer of Red Rock resorts.

Please go ahead.

Thank you operator, and good afternoon, everyone.

Speaker 2: Thank you for joining us today on Red Rock Resort's third quarter of 2023 earnings conference call. Joining me on the call today are Frank and Lorenzo Fertitta, Scott Krieger and our Executive Goddess role modelUt Cris

Thank you for joining us today on Red Rock Resorts' third quarter 2023 earnings Conference call. Joining me on the call today are Frank and Lorenzo Fertitta, Scott Krieger, our executive management team.

I'd like to remind everyone that our call. Today will include forward looking statements under the safe Harbor provisions of the United States Federal Securities laws developments and results may differ from those projected.

Speaker 2: I'd like to remind everyone that our call today will include forward-looking statements under the safe harbor provisions of the United States federal securities laws. Developments and results may differ from those projected. In this call we will...

During this call we will also discuss non-GAAP financial measures.

Speaker 2: For definitions and a complete reconciliation of these figures to GAAP, please refer to the financial tables in our Earnings Press Release Form 8K Investor Deck, which were filed this afternoon prior to the call. Also, please note that this call is being recorded.

The definitions and complete reconciliation of these figures to GAAP. Please refer to the financial tables in our earnings press release form 8-K, and Investor deck, which were filed this afternoon. Prior to the call also please note that this call is being recorded.

Before we get into any of the details similar to our financial and operating results in the first half of the year. The third quarter represented another strong quarter for the company.

Speaker 2: Before we get into any of the details, similar to our financial and operating results in the first half of the year, the third quarter represented another strong quarter for the company.

Speaker 2: quarter represented our third best third quarter in the history of the company in terms of same store net revenue adjusted EBITDA and adjusted EBITDA margin only surpassed by the unprecedented third quarters of 2021 and 2020.

Quarter represented our third best third quarter in the history of the company in terms of same store net revenue adjusted EBITDA and adjusted EBITDA margin only surpassed by the unprecedented third quarters of 2021 and 2022.

Speaker 2: continue to validate our core strategy of reinvesting in our properties to deliver fresh and relevant amenities to our guests while remaining focused on best-in-class customer service.

As the team continued to validate our core strategy of reinvesting in our properties to deliver a fresh and relevant relevant amenities to our guests while remaining focused on best in class customer service.

Speaker 2: In executing this strategy, the team delivered another strong quarter across all businesses.

In executing this strategy the team delivered another strong quarter across all business lines this quarter, marking the 13th consecutive quarter that the company delivered adjusted EBITDA margins in excess of 45%.

Speaker 2: this quarter marking the 13th consecutive quarter that the company delivered adjusted EBITDA margins in excess of 45%.

And through the first nine months of the year. The company remains on pace to have the best financial year in the history of our company.

Speaker 2: through the first nine months of the year, the company remains on pace to have the best financial year in the history of our company.

Speaker 2: Now let's take a look at our third quarter results. With respect to our Las Vegas operations, third quarter net revenue was $408 million, down $3.6 million from the prior year's third quarter. Adjusted EBITDA margin was $191.4 million, down $8.5 million year over year. Our adjusted EBITDA margin was 46.9%, a decrease of 69 basis points year over year.

Now, let's take a look at our third quarter results.

As respect to our Las Vegas operations third quarter net revenues of 408 million down $3 6 million from the prior year's third quarter. Adjusted EBITDA margin was $191 4 million down $8 5 million year over year.

Our adjusted EBITDA margin was 46, 9% a decrease of 69 basis points year over year.

Speaker 2: On a consolidated basis, the third quarter net revenue was $411.6 million, down $2.8 million from the prior year's third quarter.

On a consolidated basis third quarter net revenue was $411 6 million down $2 8 million from the prior year's third quarter adjusted.

Adjusted EBITDA was $175 2 million down $6 $7 million year over year.

Speaker 2: adjusted EBITDA was $175.2 million, down $6.7 million year over year.

Speaker 2: Our adjusted EBITDA margin was 42.6% for the quarter, a decrease of 132 basis points year before the pandemic.

Our adjusted EBITDA margin was 42, 6% for the quarter, a decrease of 132 basis points year over year.

Speaker 2: In the quarter, we converted 53% of our adjusted EBITDA to operating free cash flow, generating $91.9 million or 88 cents per share.

In the quarter, we converted 53% of our adjusted EBITDA into operating free cash flow generating $91 9 million or 88 per share.

Speaker 2: When looking at our year-to-date cumulative free cash flow, we convert 53% of our adjusted EBITDA to operating free cash flow generating $290.5 million or $2.78 per share.

When looking at our year to date cumulative free cash flow, we converted 53% of our adjusted EBITDA to operating free cash flow generating $295 million or $2 78 per share.

Speaker 2: This significant level of free cash flow is reinvested in our long-term growth strategy, including our Durango project, or return to our stakeholders via debt pay down and dividends.

This significant level of free cash flow was reinvested in our long term growth strategy, including our Durango project will return to our stakeholders via debt Paydown and dividends.

Throughout the quarter remained operational discipline and focus on our core local gas as we continue to grow our regional and national segments.

Speaker 2: Throughout the quarter, we made operational discipline and focus on our core local guests as we continue to grow our regional and national.

Speaker 2: Comparing our results to last year's third quarter, we continue to see upside from strong visitation in our regional, national, and VIP sectors.

In comparing our results to last year's third quarter, we continue to see upside from strong visitation in our regional national and VIP segments.

Speaker 2: This strength, coupled with strong spend per visit across the majority of our portfolio, allowed us to enjoy near-record third quarter revenue and adjusted EBITDA results across our gaming segment.

This strength, coupled with strong spend per visit across the majority of our portfolio I'll, let us to enjoy near record third quarter revenue and adjusted EBITDA results across our gaming segments.

Speaker 2: Turning to the non-gaming segments, both hotel and food and beverage continue to grow year over year and deliver near record profitability in the third quarter.

Turning to the non gaming segments, both hotel and food and beverage continued to grow year over year and delivered near record profitability in the third quarter.

Speaker 2: our hotel division experiences highest third quarter revenue and profit in our company's history.

Our hotel division experienced its highest third quarter revenue and profit in our company's history.

Driven by our team's success and continue to drive higher occupancy and ADR across our hotel portfolio.

Speaker 2: driven by our team's success and continue to drive higher occupancy and ADR across our hotel portfolio.

Speaker 2: Food and beverage experience near record third quarter revenue and profitability driven by higher average checks across our food and beverage outlets and the continued strength of our catering.

Food and beverage experienced near record third quarter revenue and profitability driving driven by higher average check across our food and beverage outlets and the continued strength of our catering business.

Speaker 2: Arcading revenue continues to remain strong as this quarter represented the ninth consecutive quarter of double-digit year-over-year growth in this business segment.

Our catering revenue continues to remain strong as this quarter represented the ninth consecutive quarter of double digit year over year growth in this business segment.

Speaker 2: We've got to go to our group sales business. We continue to see positive momentum driven by the growth of Room Nights, ADR and our catering revenue. As our pipeline continues to grow into the rest of this year and into the beginning of 2024.

With regard to our group sales business, we continue to see positive momentum driven by the growth in room nights ADR and our catering revenue as our pipeline continues to grow into the rest of this year and into the beginning of 2024.

Speaker 2: As we begin the fourth quarter, we like what we see so far as our business across both our gaming and non-gaming segments remain stable and consistent.

As we begin the fourth quarter, we like what we see so far as our business across both our gaming and non gaming segments remained stable and consistent to what we've seen throughout this year, though we will continue to face challenging year over year comparisons over the next several quarters.

Speaker 2: to what we've seen throughout this year, but we will continue to face challenging year-over-year comparisons over the next several quarters.

On the expense and labor side remain operation discipline and continue to look for ways to become more efficient while providing best in class customer service to our guests and continue to be a top employer of choice in Las Vegas Valley.

Speaker 2: On the expense and labor side, remain operation disciplined and continue to look for ways to become more efficient while providing best in class customer service to our guests and continue to be a top employer of choice in Las Vegas, Val.

Speaker 2: by a tougher year comparable, but company was able to manage its expenses and generate near record financial performance and continue to return to capital our share.

Despite a tougher year over year comparable but company was able to manage its expenses and generate near record financial performance and continued to continue to return capital to our shareholders.

These results demonstrate the resilience of our business model the sustainability of our operating margin the ability of our management team to execute on our long term growth strategy and take a balanced approach to returning capital to our shareholders.

Speaker 2: These results demonstrate the resilience of our business model, the sustainability of our operating margin, the ability of our management team to execute on the long-term growth strategy and take a balanced approach to returning capital to our shareholders.

During the quarter, we remain committed to strategically investing in our core strategy, which includes expanding our footprint in Las Vegas, and offering new amenities to our guests at our existing locations over the past several months, we successfully opened stone who's North 40 bar, a new poker room in a high and a new high limit slot room at our Santa Fe station property as well as <unk>.

Speaker 2: During the quarter, we made committed to strategically investing in our core strategy.

Speaker 2: which includes expanding our footprint in Las Vegas and offering new amenities to our guests at our existing locations. Over the past several months, we successfully opened Stoney's North 40 Bar, a new poker room and a new high-limit slot room at our Santa Fe Station property, as well as Game On Sports Bar at our Boulder Station.

I'm on sports bar at our Boulder station property we.

Speaker 2: We are pleased with the early results from all the amenities we've opened up in 2023 and expect to continue to invest in additional amenities, which will include our new high limit slot and table room at our Green Valley Ranch properties opening later this year. Now let's cover...

We are pleased with the early results from all of the amount of these we've opened up in 2023 and expect to continue to invest in additional amenities, which will include a new high limit slot and table room at our Green Valley Ranch properties opening later this year.

Now, let's cover a few balance sheet and capital items.

The company's cash and cash equivalents at the end of the third quarter were $122 8 million and the total principal amount of debt outstanding was $3 3 billion, resulting in net debt of $3 2 billion.

Speaker 2: The company's cash and cash equivalents at the end of the third quarter were $122.8 million and the total principal amount of debt outstanding was $3.3 billion resulting in net debt of $3.2 billion.

Speaker 2: at the end of the third quarter, the company's net debt to EBITDA and interest coverage ratios.

As at the end of the third quarter, the company's net debt to EBITDA and interest coverage ratios.

Speaker 2: 4.37 times and 4.5 times respect.

4437 times and four five times respectively.

Speaker 2: As we stated on previous earnings calls, our leverage will continue to tick upwards as we complete the construction of our Durango project.

As we stated on previous earnings calls our leverage will continue to tick upwards as we complete the construction of our Durango project and upon the completion of Durango, We will expect to delever towards our long term net leverage target of three times net leverage.

Speaker 2: Upon the completion of Durango, we will expect to deliver towards our long-term net leverage target of three times net leverage.

Capital spend in the third quarter was $135 4 million, which includes approximately 119 point by $4 million in investment capital inclusive of Durango, as well as $16 million in maintenance capital.

Speaker 2: Capital spent on the third quarter was 135.4 million, which includes approximately 119.4 million in investment capital, inclusive of Durango, as well as 16 million in maintenance.

Speaker 2: For the full year 2023, we now expect to spend between $70 and $90 million in maintenance capital and a total of $550 to $600 million in growth capital, inclusive of Durango.

For the full year 2023, we now expect to spend between $70 million to $90 million in maintenance capital and a total of $550 million to $600 million growth capital inclusive of Durango.

Now lets provide an update on our development pipeline.

We continue to prepare for the scheduled opening of our Durango resort, which we've now moved to December 5th in order to ensure our first class opening of the resort.

Speaker 2: We continue to prepare for the scheduled opening of our Durango Resort, which we have now moved to December 5th in order to ensure a first-class opening of the resort.

Speaker 2: As we mentioned before, we are extremely excited about the addition of this resort to the Red Rock family, which is situated on a 50-acre site, ideally located off the 215 Expressway and Durango Drive in the Southwest Las Vegas Valley.

As we've mentioned before we are extremely excited about the addition of this resort to the Red Rock family, which is situated on a 50 acre site ideally located off the $2 15 Expressway in Durango, driving the southwest Las Vegas Valley.

Speaker 2: The resort is located in the fastest growing area in the Las Vegas Valley, with a very favorable demographic profile and no unrestricted gaming competitors within a 5 mile radius.

<unk> is located in the fastest growing area in the Las Vegas Valley. So the very favorable demographic profile with no unrestricted gaming competitors within a five mile radius.

Speaker 2: As we looked at open Durango, we expect some movement in the budget, but we do not expect the budget to be materially different than the $780 million we were disclosing in our prior earnings.

As we looked at the open Durango, we expect some move in the budget, but we do not expect the budget to be materially different than the $780 million, we disclosed in our prior earnings call.

Speaker 2: The company still anticipates the return profile for Durango to be consistent with our prior Greenfield development.

The company still anticipates the return profile for Durango to be consistent with our prior greenfield developments.

Turning now to North Fork as we noted last quarter after favorably resolving all of its other litigation. The tribe has a single remaining case in the California courts.

Speaker 2: Turning now to North Fork, as we noted in our last quarter, after favorably resolving all of its other litigation, the tribe has a single remaining case in the California under followup.

Speaker 2: We do not believe the case will interfere with the right or ability of North Fork to conduct gaming on its Federal Trust land, and we continue to work with the Tribe to progress our efforts with respect to this project, including working toward the approval of aMusic playing

We do not believe the case will interfere with our with the right or ability of North Fork to conduct gaming on its federal Trust land and we continue to work with the tribe to progress our efforts with this with respect to this project, including working towards the approval of a management agreement.

Continuing our work on the development and design and having preliminary talks with respect of lending partners.

Speaker 2: continue our work on the development and design and having preliminary talks with prospective lending.

Speaker 2: We are making good progress on these fronts and will continue to provide updates on our quarterly earnings.

We are making good progress on these fronts and will continue to provide updates on our quarterly earnings calls.

On the real estate front as noted on our last earnings call. We have made significant progress with respect to the sale of our former Texas station and Fiesta Rancho properties.

Speaker 2: On the real estate front, as noted in our last earnings call, we have made significant progress with respect to the sale of our former Texas station and Fiesta Rancho property.

Speaker 2: While we cannot disclose the terms, we anticipate the closing of these two real estate parcels later this week.

While we cannot disclose the terms we anticipate the closing of these two real estate prices later this quarter. These.

These potential transactions represented continued execution of our long term real estate development strategy as we look to reposition and upgrade our real estate portfolio for the next chapter of growth at station casinos.

Speaker 2: These potential transactions represent a continued execution of our long-term real estate development strategy as we look to reposition and upgrade our real estate portfolio for the next chapter of growth at Station.

Lastly on November six the Companys Board of directors declared a cash dividend of <unk> 25 per class a common share payable on December 29, two class a shareholders of record as of December 15th.

Speaker 2: Lastly, on November 6th, the company's board of directors declared a cash dividend of 25 cents per Class A common share. Payable on December 29th to Class A shareholders of record as of December 15th.

Speaker 2: With our best-in-class assets and locations, coupled with our development pipeline of seven owned development sites located in the most desirable locations in the Las Vegas Valley, we have an unparalleled growth story that will allow us to double the size of the portfolio and capitalize on the very favorable long-term demographic trends and high barriers to entry that characterize the Las Vegas locals market.

With our best in class assets and locations coupled with our development pipeline of seven owned development sites located in the most desirable locations in the Las Vegas Valley, we have an unparalleled growth story that will allow us to double the size of the portfolio and capitalize on the very favorable long term demographic trends and high barriers to entry that characterized the Las Vegas locals Mark.

Okay.

We'd like to recognize and extend our thanks to all of our team members for their hard work our success starts with them and they continue to be the primary reason why our guests return time after time.

Speaker 2: We would like to recognize and extend our thanks to all of our team members for their hard work. Our success starts with them and they continue the primary reason why our guests return time after time.

Speaker 2: We'd like to thank them for voting us the top casino employer in the Las Vegas Valley for the third consecutive year.

We'd like to thank them for voting us the top casino employer in the Las Vegas Valley for the third consecutive year.

Speaker 2: We were also very proud to share that form selected our Red Rock Casino Resort in Spa as the top overall Casino Resort Hotel in Las Vegas, which we consider a tremendous recognition of our efforts and those of our team members.

We're also very proud to share that Forbes selected the Red rock Redrow slipped at our Red Rock Casino resort and Spa as the top overall casino resort hotel in Las Vegas, which we consider a tremendous recognition of our efforts and those of our team members. Finally, we would like to thank our guests for their loyal support each of those six decades.

Speaker 2: Finally, we would like to thank our guests for their loyal support each of the last six...

Speaker 2: Operator, this concludes our prepared remarks today and we are now ready to take questions.

Operator. This concludes our prepared remarks today and we are now ready to take questions.

We will now begin the question and answer session.

Speaker 1: To ask your question, you may press star than one on your touchtone phone.

I'll ask a question you May press star one on your Touchtone phone.

Speaker 1: If you are using a speakerphone, please pick up your handset before pressing the keys.

If you are using a speakerphone please pick up your handset before pressing mckeith.

Speaker 1: If at any time your question has been addressed and you would like to withdraw your question, please press star then two.

Is it any time your question has been addressed and you.

I would like to withdraw your question. Please press Star then two.

Speaker 1: In the interest of time, please limit yourself to one question and one follow-up.

And the answer at this time, please limit yourself to one question and one follow up.

Speaker 1: At this time, we will pause momentarily to assemble our roster.

At this time, we will pause momentarily to assemble our Rocco.

Okay.

The first question today comes from Joe Greff with Jpmorgan. Please go ahead.

Speaker 1: The first question today comes from Joe Brest with JP Morgan. Please go ahead.

Speaker 3: Great afternoon everybody. Just an under-ango, that's a big deal, but the movement to December 5th can talk about why, and it's only a couple of weeks. And then Steve, you mentioned there might be some movement in the budget of 780 million, but it wouldn't be material. You define material as being within 5% of the variance to that budget, and then I will follow up.

Good afternoon everybody.

Just on Durango.

It's a big deal, but the movement to December 5th can you talk about.

Why.

A couple of weeks and then Steve you mentioned there might be some movement in the budget.

$780 million, but it wouldn't be material you define material is being within 5% of.

The variance to that budget and then I have a follow up.

I'll go with the last one first and then I'll turn to Lorenzo for the first one the answer is yes, you are correct.

Speaker 2: I'll go with the last one first and then it'll turn until the runs open the first one. Your answers, you're correct.

And that 5% movement, yes, that's accurate.

Speaker 4: Mr. Lorenzo Joe, relative to moving back the day, the reality is as we've, you know, you try to predict when a lot of these areas are gonna be handed over. And as of right now, when we start to look at the calendar, certain areas that are critical to the opening, just we're not turned over in the time that we had to,

This is lorenzo Joe relative to moving back the day the reality is as we've.

To try to predict when a lot of these areas youre going to be handed over.

And as of right now when we started to look at the calendar or certain areas that are critical to the openings.

We're not turn it over.

In the time that we had originally anticipated which in turn we didn't feel like gave us enough time to properly train our staff and our team members and venue to be able to have the appropriate load in days and then play days our operations are a little bit different from the strip in the sense that we're primarily a locals.

Speaker 4: Which in turn, we didn't feel like gave us enough time to properly train our staff and our team members in venue to be able to have the appropriate load in days and then play days. You know, our operations are a little bit different from the strip in the sense that we're primarily a local's property. And we're going to obviously have a lot of repeat customers. This isn't where you're just going to see a new face every day.

<unk>.

And we're going to obviously have a lot of repeat customers. This isn't where you're just going to see a new face every day.

Speaker 4: And for me and Frank, the most important thing is that

And for me and Frank the most important thing is that.

Speaker 4: the level of service on the day that we open is at the highest quality that it can be. So we think it's obviously the right thing to do to make sure that when the doors open for a long term investment, we're fully ready and you know, we're going to own this asset for a very long time. And the first impression is very important. And quite honestly, we just have very high standards and we want to make sure that we nail the old.

The level of service on the data we opened at the highest quality that it can be so we think it's obviously the right thing to do to make sure that when the doors open for long term investors fully ready and we're going on this this asset for a very long time and the first impression is very important in <unk>.

Quite honestly, we just have very high standards that we want to make sure that we nailed the opening.

Speaker 3: Fair enough and then might my follow up question and over once the answer go ahead. This is the operator was taking

Fair enough and then my follow up question whoever wants to answer go ahead.

This is the operator speaking privately can I have your name please.

Speaker 5: Hello, are you there are you in the question queue? Would you like to. Provide a name and company.

Hello are you. There is one question here would you like to provide a name and company.

You are now rejoining the main conference.

Speaker 3: You are now rejoining the main conference. Yeah, hi, Joe. This is Scott Prager.

Joe This is Scott Brinker.

Sure.

Speaker 6: We are really comfortable with our expense structures right now. And we think our expenses are in line. Our team's out at the properties are doing a great job to create efficiency. When we break down some of the major categories, let's start with labor at first. As we said in past calls, we really

We are really comfortable with our expense structures right now and we think our expenses are in line. Our teams out of the properties are doing a great job to create efficiency when we break down some of the major categories, let's start with labor first as we.

We've said in past calls, we really think between our wage or benefits in our company culture, We're an employer of choice.

Speaker 6: our wage, our benefits, and our company culture were an employer of choice. And that's evidenced by the strong outcome we had with our hiring campaign at Durango. So while you have to stay competitive in the market, in the market, it has to be monitored. We feel like we're in the right spot when it comes to salaries and wages.

Evidenced by the strong.

Outcome, we had with our hiring campaign of Durango, So well you have to stay competitive in the market and the market has to be monitored we feel like we're in the right spot when it comes to salaries and wages.

Speaker 6: and were able to hire a quality talent. We were able to get their angle hired very quickly with top quality candidates.

And we're able to hire quality talent, we were able to get Durango.

Very quickly with top quality candidates.

Speaker 6: We don't see that changing materially into the future.

Not see that changing materially into.

Into the future.

Speaker 6: When we talk about cost sales, we're actually down your over here in cost sales. So the teams have been able to manage cost sales, whether that's through creative menu pricing or composition or other factors. We've been able to stay pretty consistent there.

When we talk about comp sales were actually down year over year and cost of sales. So the teams have been able to manage cost of sales whether that's through creative menu.

On pricing or composition or other factors, we've been able to stay pretty consistent there.

Speaker 6: And as we've talked about in the past acquisition costs remains rational and stable within the market.

As we've talked about in the past acquisition cost remains rational and stable.

The market.

Speaker 6: There are a couple of things that do weigh us down a bit that are less in our control. One of those is energy. It still remains high, specifically in electricity.

There are a couple of things that do weigh us down a bit that are less in our control one of those is energy it still remains high specifically.

Electricity.

Speaker 6: And we believe in keeping our properties fresh. And we spend quite a good amount of money on repairs and maintenance, making sure we have a first-class experience. But those spends are within our control. We think we have spent a good amount of repairs and maintenance. And we think our properties are in.

And we believe in keeping our properties fresh and we spend quite a good amount of money on repairs and maintenance, making sure. We have a first class experience, but those.

Spends are within our control we think we have spent.

A good amount of repairs and maintenance so we think our properties.

Speaker 6: top shape and we can control the repairs and maintenance costs going forward if we feel the need to ratchet that down a bit.

Top sheet and we can control the repairs and maintenance costs going forward, if we feel the need to to ratchet that down.

Thank you.

Speaker 1: The next question comes from Carlos Santorelli with Deutsche Bank. Please go ahead.

The next question comes from Carlo Santarelli with Deutsche Bank. Please go ahead.

Speaker 7: Hey, everybody, good afternoon. You're just trying to kind of think from a modeling perspective and thinking about, you know, kind of the seasonality and big is specifically the fourth quarter and how, generally speaking, historically, you know, one queue and four queue were your best quarters. So...

Hey, everybody good afternoon.

Steve just trying to kind of think from a modeling perspective, and thinking about kind of the seasonality in Vegas specifically.

In the fourth quarter, and how generally speaking historically <unk> and <unk> what are your best quarters, So you're putting that kind of within the framework and then thinking about how we should contemplate the impact that Durango will have over the 26 days.

Speaker 7: putting that kind of within the framework and then thinking about how you know, we should contemplate the impact that Durango will have over the 26 days.

Speaker 7: Any call outs for pre-opening type of expenses or things like that that will be excluded from EBITDA and anything else you could share on that front?

Any callouts for Preopening type of expenses or things like that that it will be excluded from EBITDA and.

Else you could share on that front.

Yes, I think on the pre opened.

Karla.

Speaker 2: As we've been ramping up the project over the past year, you've been gradually seeing an increase in those expenses. And they just happen to be underneath the right office and other line at them below the line. And so we do see that ramping up as we can go right up to the opening of Durango when we start and those expenses slip to our...

We've been ramping up the project over the past year, you've been gradually seeing an increase in those expenses and they just happen to be in either the write offs and other line item.

Below the line and so we do see that ramping up as we go right up to the opening of Durango. When we start to then those expenses flipped to operational.

Okay got it.

Speaker 7: Okay, got it. And then just in terms of as you look out to next year, obviously, you guys talked a little bit about the cost headwinds that are present in the market. But from a demand standpoint, from a health of Las Vegas standpoint, is there optimism that you could see top line flattish to slight growth in 2024 on a same store basis?

And then just in terms of as you look out to next year, obviously, you guys talked a little bit about the cost headwinds.

That are present in the market, but from a.

Demand standpoint from a health of Las Vegas standpoint.

Is there optimism that you could see top line flattish to slight growth in 2024 on a same store basis.

Yes. This is Scott, yes for sure.

Speaker 6: Yeah, this is Scott. Yeah, for sure. You know, it's art pieces and we believe in Las Vegas. There's no one more bullish than us about the Las Vegas market.

Our thesis in the <unk>.

Believe in Las Vegas, There is no one more bullish than us about the Las Vegas market.

Speaker 6: We're bringing on new product. We're entering markets that are under-penetrated.

We're bringing on new product, we're entering markets that are underpenetrated.

Speaker 6: We're adding high limit rooms across our brand that have met with strong success already at Red Rock. So we're optimistic about going into 2024. And I think the population migration into Nevada remains totally intact. I mean, that's kind of our long term thesis is net inflow of growing population here.

We're adding high elaborate rooms across our brands that are met with strong success.

At.

Red rock, so we're optimistic about going into 2024, and I think the population migration and Nevada remains totally intact. I mean, that's kind of our long term thesis has not been flow of growing population here.

Speaker 3: And the fact is the people who are moving here have higher annual income than they've ever had in the past. So we remain bullish on the Las Vegas story. And it's not just people, it's business.

And the fact is people are moving here have higher annual income than we've ever had in the past. So we remain bullish on the Las Vegas story, and it's not just people Harlow its businesses.

Speaker 2: So not only is the people that are moving here, to Frank's point, getting wealthier, but the economy is getting more diverse. which all bodes well.

So not only is the.

A few people that are moving here to Frank's point getting wealthier, but the economy is getting more diverse.

Job bodes well for our business.

Great. Thank you all very much.

Yeah.

Speaker 8: The next question comes from Sean Kelly with Bank of America. Let's go ahead. I get up in the afternoon. Everyone.

The next question comes from Shaun Kelly with Bank of America. Please go ahead.

Hi, good afternoon, everyone. Thanks for taking my question.

Two for me first off just wanted to just you already gave us the answer I believe on the labor and cost environment. So if we know the answer but I kind of wanted the particulars around just.

Speaker 9: Two for me, first off, you already give us the answer, I believe, on the labor and cost environment. So, we know the answer, but I kind of wanted the particulars around just any thoughts on the union progress and how that may impact prevailing wages more broadly around the valley. Again, it seems like you all are pretty insulated and very comfortable with where you sit, but I'm just kind of curious on your observations more broadly as those discussions sort of kick into high gear here in the next couple weeks.

Just any thoughts on the union progress and how that may impact prevailing wages more broadly around the valley again. It seems like you are pretty insulated very comfortable with where you sit but I'm just kind of curious on your observations more broadly as those discussions sort of kick into high gear here in the next.

The next couple weeks.

Yes, John this is Scott.

Speaker 6: Yes, this is Scott. I'll kind of take it from two angles.

It from two angles one.

Speaker 6: No one's really sure what the outcome will be on the negotiations.

No one's really sure what the outcome will be on the negotiations certainly it does have a knock on effect to us we don't mark ourselves to strip wage, but we certainly want to stay competitive in the market. So to the degree we have to look at those positions and adjust we're prepared to do that.

Speaker 6: Certainly it does have a knock-on effect to us. We don't mark ourselves to strip wage But we certainly want to stay competitive in the market. So to the degree we have to look at those

Speaker 6: positions and adjust were prepared to do that. But the flip side on the positive is any raises that the culinary workers on the strip receive. Keep in mind that those are our customers when they come home at night. So there's a knock on benefit in our business model for higher discretionary income for Las Vegas residents.

Sure.

But the flip side on the positive is any raises the call on our culinary workers on the strip receive keep in mind that those are our customers when they come home at night. So there is a knock on benefit.

Our business model for higher discretionary income for Las Vegas residents.

Great. Thank you for pointing that out and then my other question would just be sort of behavior kind of behind the scenes as you as you dig into what you saw in Q3, I think what we heard broadly speaking around <unk>.

Speaker 9: A great point. Thank you for pointing that out. And then my other question is just to be sort of, you know, behavior kind of behind the scenes as you dig into what you saw on Q3. I think what we heard broadly speaking around, you know, the casino landscape has been, you know, up in rated play. And I think you called out a couple of segments that were that were strong for you. Down still a little bit as you see some normalization and unrated, is that a fair characterization when we just sort of decompose?

No.

The casino landscape has been.

Up in rated play and I think you called out a couple of segments that were that were strong for you.

It's still a little bit as you see some normalization in unrated is that a fair characterization, we just sort of decompose your casino revenues, which I think were down roughly 3% year on year. If we just look at that casino line.

Speaker 9: Your casino revenues, I think we're down, you know, roughly 3% year on year. If we just look at that casino line, that's still kind of the broad prevailing behavior any nuance to that.

Is that still kind of the broad prevailing behavior any nuance to that.

Yes look I think you've nailed it.

Speaker 6: Yeah, Laura, 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 bit of impact.

Relative consistency in the trends.

Did have some disruption impacted CVR.

Our 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 an impact we think we outperformed the market in the quarter.

Speaker 6: We think we outperformed the market in the quarter. As we take a peek into the fourth quarter, we like the trends so far.

And.

As we kind of take a peek into the fourth quarter, we like the trend so far.

Thank you very much.

The next question comes from Jordan Bender with JMP Securities. Please go ahead.

Speaker 1: The next question comes from Jordan Bender with JMC Security. Please go ahead.

Speaker 3: Great, thanks for taking my question. Nice acceleration hotel revenue during the quarter. You know, 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 space or should we expect this to be more rate driven into 2024? Thank you.

Great. 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.

But as we look forward is there anything telling us that occupancy will will grow off of this base or should we expect this to be more rate driven into 24. Thank you.

Yes.

Speaker 2: Yeah, I mean, I can take this one. I mean, right now I think we're right around 86%, you know, 86.2%. It's still below our historical highs, because still we're still looking to get our group and sales.

I can take this one I mean right now I think we're right around 86% or six 2%, it's still below our historical highs, which is still we're still looking to get our group and sales. This is back.

Speaker 10: OK, and then just on the follow up, I know there was quite a bit of weather. Fire is when hurricanes in the valley during the quarter was any operations impacted from those weather events. Thank you. No, no.

Okay.

And then just on the follow up I know there was quite a bit of weather fire is wayne's hurricane in.

In the valley during the quarter was any operations impacted from those weather events. Thank you.

Now now the operating as normal.

Thank you very much.

Speaker 1: The next question comes from Steve Wiesenski with Cycle. Please go ahead.

The next question comes from Steve <unk> with Stifel. Please go ahead.

Yes.

Speaker 11: Hey guys, good afternoon. So Steve, just want to be clear here there. 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 right down line. Just trying to make sure that margins here are gonna 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-of-year?

Hey, guys. Good afternoon, so Steve just want to be clear here.

I think you said this but there were no operating expenses related to Durango that hit the <unk>.

<unk> statement in the third quarter meeting nodes. So is essentially we're all in that write down.

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.

Somewhat unrelated Steve just wondering what drove the corporate expense line down about 10% year over year.

Speaker 2: Yeah, I think you actually, you're gonna let me the question. So the one expense we recognized that was probably shouldn't have been where it was, was in corporate. So there was some pretty open expense that we classified from corporate, this quarter into the Durango project to that cause the reduction into corporate. But to your point, no other expense related to the Durango opening has bled into the office.

Yes, I think you actually you kind of led me to questions. So one expense we recognized it was probably shouldnt be where it was was in corporate.

So there was some pre opening expense that we reclassified from corporate this quarter into the Durango project and that caused the reduction into into corporate but to your point no. Other expense related to the Durango opening has bled into the operations.

Okay got you Thanks, and second question, Steve in your prepared remarks, you talked about group sales.

Speaker 11: Okay, gotcha, thanks. And second question, Steve, in your prepare remarks, 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 just wondering, maybe if you could provide a little bit more detail about those group sales heading into next year.

You mentioned those were kind of pleased with how those are trending right now heading into next year, but.

Were pretty high level remarks, just just wondering maybe if you could provide a little bit more detail about it.

Group sales heading into next year.

Speaker 6: Yeah, this is Scott. Let's take this year and the remainder of this year, we snapped the line.

Yes. This is Scott.

Let's take the this.

This year in the remainder of this year, we snap the line and compare to same time last year room nights are up roughly 20% revenues are up nearly 40% catering is up over 50%.

Speaker 6: parapses at the same time last year. Room nights are up, roughly 20%. Revenues are up, nearly 40%. Caterings up, over 50%. In the quarter, you see similar performance. One thing to note, so that's super strong. We're really happy with the results across the board as it relates to hotel and hotel sales and catering. One note, as you go into 24.

In the quarter you see similar.

Performance.

One thing to note so super strong and we're really happy with the results across the board as it relates to hotel and hotel sales and catering.

One note as you go into 2004.

Speaker 6: and compare year over year, we're up against tough cough because we had latent bookings that were booked during the COVID period that turned off in the first part of the year. So while we like the pace of where we're going, when you start to look at next year on a year over year cough basis, it's going to be a pretty high cough. So.

And compare year over year, we're up against a tough comp because we had leighton bookings that were booked during the COVID-19 period that burned off in the first part of the year. So while we like the pace of where we're going when you start to look at next year on a year over year comp basis, it's going to be a pretty high comp.

Got you Thanks, Scott appreciate it.

Okay.

The next question comes from Barry Jonas with <unk> Securities. Please go ahead.

Speaker 1: The next question comes from Barry Jones with Truist Securities. Please go ahead.

Hey, guys. Appreciate the positive commentary for Q4, just curious how trends are looking specifically for F. One and maybe for Super Bowl into Q4, Q1 as well thanks.

Speaker 12: Hey guys, appreciate the positive commentary for Q4. Just curious how trends are looking specifically for F1 and maybe for Super Bowl into Q4, Q1 as well. Thanks.

So Lorenzo I mean, we're not quite as tied to.

Speaker 4: So, this Lorenzo, I mean, we're not quite as tied to F1 as some of the properties on the script. So they can probably give a lot better color just what we're seeing in the marketplace looking at room rates and whatnot.

F one and some of the properties on the strip. So they can probably give a lot better color just what we're seeing in the marketplace looking at room rates and whatnot. It seems as though that there has been some steam come out of the.

Speaker 4: as though that there has been some steam come out of the...

People's expectations for maybe what they thought better that would be maybe a year ago.

Speaker 4: people's expectations for maybe what they thought that event would be maybe a year ago. With that said, we do think it's still going to be a great weekend and a positive event. At least for us, we're not leading the charge there from an F1 standpoint, but we are getting the benefit of all the guests.

That said, we do think it's still going to be a.

Great weekend and a positive event.

At least for US I mean, we're.

We're not leading the charge there from an F. One standpoint, but we are getting the benefit of all of them.

People coming into town and whatnot, but room rates certainly have come down from where people's expectations were.

Speaker 4: what not, but you know, room rates certainly have come down from where people's expectations were.

Speaker 6: as recent as maybe three or four months ago. And I think the Super Bowl we would expect to have very strong demand.

Even as recent as maybe three or four months.

Super Bowl, we would expect to have very strong demand.

Yes, we're super bullish on the Super Bowl, we're seeing very strong bookings there that should be it.

Speaker 4: We're super bullish on the Super Bowl. We're seeing very strong bookings there. That should be it.

Pretty.

Speaker 4: pretty, you know, an outlier from a weekend to the positive. I think for everybody.

An outlier from a weekend to the positive I think for everybody in town.

Got it and then just as a follow up you guys have a number of great options, but any updated thoughts on what's next in the development pipeline and I guess timing.

Speaker 12: Got it. And then just as a follow up, you know, you got as a number of great options, but any of the thoughts on what's next in the development pipeline and I guess timing, you know, for specifically for Vegas post your angle. Thanks.

Specifically for Vegas post Durango. Thanks.

Well I think as we've said before we're going to want to get Durango open and get it stabilized.

Speaker 4: Well, I think, as you know, as we said before, we're going to want to get Durango open and get it stabilized. We've got a number of development opportunities waiting for us, about six opportunities.

A number of development opportunities.

Waiting for us about six opportunities.

Speaker 4: I would say that from a design standpoint, as far as starting. We're probably furthest along with either Durango Phase 2 or the Anspurata project.

I would say that from a design standpoint, as far as starting probably furthest along with either Durango phase II or the <unk> project and then after that Skye Canyon is probably right behind that we have been actively working on all those developments but.

Speaker 4: And then after that, Sky Canyon is probably right behind that. We've been actively working on all those developments, but we just want to get Durango open and stabilized before we make a decision on what's next.

Just want to we want to get Durango opened and stabilized before we make a decision on what's next.

Great. Thanks for answering my questions.

Speaker 1: The next question comes from Dan Paul, so it was more fun to go ahead.

The next question comes from Dan <unk> with Wells Fargo. Please go ahead.

Thanks for taking my questions I just wanted to follow up on the Formula One question. The Formula one topic I mean, as you think about there's a lot of disruption as it relates to roads and construction.

Speaker 13: Thanks for taking my questions. I just wanted to follow up on the formula one topic. I mean, as you think about the, there's a lot of disruption, you know, as it relates to roads and construction in Las Vegas. Is there a scenario where you actually could be a, you know, net beneficiary, just to the extent that there's less, you know, traffic into the strip and maybe to the peripheral areas where you're, you know, as well located.

In Las Vegas is there a scenario, where you actually could be a net beneficiary just to the extent that there's less traffic into the strip and maybe to the peripheral areas where youre located.

Yes, Dan its Scott I think we would characterize the first the first year of that one is a learning experience none of us really know we can make.

Speaker 6: Yeah, Dan, it's Scott. I think we would characterize the first year of F1 as a learning experience. None of us really know. We can make assumptions of things. We thought that there would potentially be a benefit, both from locals.

Assumptions of things, we thought that there would potentially be a benefit.

Both from locals.

Speaker 6: And also from out of town folks, maybe art is interested in the, you know, all of the energy around Formula One and want something that's a little bit more of a relaxed, resort experience and may choose us as an option. So that's just to be seen. So we'll learn from that.

And also from out of town folks that maybe arent as interested in.

All of the energy around Formula one and want something that's a little bit more of a relaxed resort experience and may choose us as an option. So that's yet to be seen so we'll learn from that.

Speaker 2: But we think there could be a positive effect. Dan, this is just another step in the evolution of Vegas, right? It's just another large weekend in the scheme of large weekends, which seem to be now 52 weeks a year. There's going to be a lot of people visiting the town, so that means there's going to be a lot of tips.

But we think there could be a positive effect. It Dan. This is just another step in the evolution of Vegas is just another large weekend in the scheme of large weekends, which seem to be now 52 weeks a year is going to be a lot of people visiting the town that means there's going to be a lot of tips.

Speaker 2: and those, you know, those tipped employees on the strip are generally our customers. So, and Scott touched on it earlier, but there's kind of a two-pronged.

Those tipped employees on the strip our generally our customers. So Scott touched on it earlier, but this is kind of a two pronged benefit there.

Speaker 13: Got it. And then just for my fall, I know you guys have, you know, a well documented set of opportunities, you know, within Las Vegas. But I guess as you think about the company as a whole, are there other opportunities that you've looked at or would consider, you know, outside of Nevada or, you know, even outside of the US.

Got it and then just for my follow up I know you guys have.

A well documented set of opportunities within Las Vegas, but I guess as you think about the company as a whole.

Are there other opportunities that you've looked at or would consider outside of Nevada.

Even outside of the U S.

Yes, I mean, we're always looking at all opportunities that are out there but.

Speaker 6: Yeah, I mean, we're always looking at all opportunities that are out there, but for any opportunity, we really have a high, high benchmark of what it would have to be in terms of the opportunity and the risk reward profile.

Any opportunity, we really have a high high benchmark.

What it would have to be in terms of the opportunity and the risk reward profile.

Speaker 4: We're in some. No, that's fair. I mean, it would have to be an exceptional opportunity, given the fact that we do have a pipeline.

No that's fair I mean, it would have to be an exceptional opportunity.

Given the fact that we do have pipeline in Las Vegas.

Sure.

Understood. Thanks.

The next question comes from Chad Beynon with Macquarie. Please go ahead.

Speaker 1: The next question comes from Chad Banon with Macquarie. Please go ahead.

Speaker 14: Good afternoon. Thanks for taking my question. Wanted to ask about the Durango EBITDA ramp and also how we should think about margins maybe compared to some of your other bigger resort properties in the market as it pertains to the mix of gaming versus non-gaming. Thanks.

Good afternoon, and thanks for taking my question wanted to ask about the Durango EBITDA ramp and also how we should think about margins maybe compared to some of your other bigger resort properties in the market as it pertains to the mix of gaming versus non gaming.

Okay.

Yes, so maybe I'll start and I'm sure Scott will flip in but I think we've been pretty consistent in terms of the ramp.

Speaker 2: So I'm now starting to ensure that the scale will flip in, but I think we've pretty consistent in terms of the ramp.

Speaker 2: When we take a look at this property, there are no real loss leaders here. You add slots, you add tables, you have to, a little bit over 200 rooms, we're operating two restaurants with the system wide, we tend to operate very properly in terms of the oyster's art and stake.

When we take a look at this property there are no real loss leaders here you have slots you have tables.

Little bit over 200 rooms were operating two restaurants system wide, we tend to operate very profitably in terms of the oyster bar in the stake and the rest of the restaurants are leased so 100% profit margins. So we think the property would profit right out of the gate.

Speaker 2: And the rest of the restaurants are lease, so 100% profit margin. So we think the property would profit right out of the gate. It will reach kind of what we view as kind of stability, though it will never be, it will never reach, it will keep growing, probably at year three.

Will reach kind of what we view as kind of stability, though it will never be it will never reach will keep growing probably in year three.

Speaker 2: I mean, Red Rock is skilled ramping after opening up in 2006. So we would expect the same thing for Derango moving forward. And then we think to answer your second question, that stability, we think this will most likely be one of our highest, is not our highest margin property.

Red rockets skill ramping after opening up in 2006 so.

We would expect the same thing for Durango moving forward and then we think to answer your second question Adnan.

Stability, we think this will most likely be one of our highest it's not our highest margin property in the system.

Speaker 6: And I think on the early side of it, we just want to make sure that the customer experiences is as good as it can be. So while efficiency is important out of the gates, we want to make sure that the customer experiences the best it can be. And then as we level out, we can slowly bring a efficiency into the business as we go.

And I think on the early side of it we just want to make sure that the customer experiences is as good as it can be so while efficiency is important out of the gates, we want to make sure that the customer experience is the best it can be and then as we level out we've been slowly bringing efficiency into the business.

As we go forward.

Perfect. Thank you and then as it pertains to the cash that you'll be bringing in from Texas station in Fiesta Rancho.

Speaker 14: Perfect, thank you. And then as it pertains to the cash that you'll be bringing in from Texas Station and Fiesta Rancho, how should we think about the use of that capital? Is that going to earmarked for 24 CAPX or should we think about that being used potentially for additional dividends or share repurchases? Thanks.

How should we think about the use of that capital is that kind of earmarked for 'twenty four capex or should we think about that being used potentially for <unk>.

Additional dividends or share repurchases I think I think Lewis well.

Right now the balance sheet flexibility to anything in the first priority is to pay down the revolver.

Speaker 3: Right now the balance has flexible to do anything. The first priority is to pay down the revolver. Great.

Great. Thank you very much guys best of luck on the opening.

Thanks.

The next question comes from Joe Stauff with Susquehanna. Please go ahead.

Speaker 15: The next question comes from Joe Stoff with Beth Gujana. Please go ahead. Thank you. Scott, you had mentioned the second derivative called benefit from...

Thank you.

Scott you had mentioned.

No.

Kind of second derivative call it benefit from.

Our union.

Speaker 15: a union negotiation. I was wondering, is there any like history you could share with us or possibly frame the size of that consumer group for you guys and then

Negotiation I was wondering is there any like history, you could share with us or possibly frame. This.

Size of that consumer group.

Are you guys and then.

Second question was.

Speaker 15: Second question was, maybe in the quarter or current trends, if you see any difference, maybe in customer behavior, say, within your six larger properties, thank you.

Maybe in the quarter or current trends.

If you see any difference.

Maybe in customer behavior say within your your six larger portfolio or your six larger properties. Thank you.

Speaker 6: The first one I think I'm going to answer you appropriately with the information we have, I think that the size and scale or the quantum of culinary workers is somewhere around 60,000 culinary workers. Now how that monocieses within the company we couldn't measure.

The first one I think I'm going to answer you appropriately.

Appropriately with the information, we have I think that the size and scale or the quantum of culinary workers is somewhere around $60 a culinary workers now how that monetize within the company, we couldnt measure that.

Speaker 3: that's more anecdotal. And then I think you had asked in your second question, just if there's any changes in the core six properties from a financial perspective. Yeah, just in customer behavior.

That's more anecdotal and then I think you had asked in your second question just if theres any changes in the core six properties from a financial perspective.

Yes, just in customer behavior and trends.

Yes look I think it's been pretty consistent with what we've said in the past the higher end of our database is doing better than the lowest end of our database.

Speaker 6: Yeah, look, I think it's been pretty consistent with what we've said in the past. You know, the higher end of our database is doing better than the lowest end of our database.

Speaker 6: Some of that may be macroeconomic pressures, which we've been living with for a while.

Some of that may be macroeconomic pressures, which we've been living with for a while.

Speaker 6: And part of it is by design within our operating strategy to focus on higher profit customers and bring on amenities that are catered to a higher profit customer base or higher spend per visit.

Part of it is by design within our operating strategy to focus on.

Our profit customers and bring on amenities that are catered to the higher profit customer base or higher spend per visit but I don't think theres anything in the database right now that would give us any cause for alarm or would say as off trend from where we've been.

Thanks.

The next question comes from John Decree with CBRE. Please go ahead.

Speaker 1: The next question comes from John McCree with CDRE. Please go ahead.

Hey, everyone, maybe just one question related to North Fork.

Speaker 16: Yeah, everyone. Maybe just one question related to North Fork, and get some comments in the prepared remarks. But with one case left, would that preclude you from a near-partner from going full speed ahead and if not any thoughts on timing or how we should think about getting started or pick up the pace on the North Fork project?

Just some comments in the prepared remarks, but with one case left would that preclude you from and your partner from going full speed ahead, and if not any thoughts on timing or how we should think about getting started or.

Pick up the pace on the North Fork project.

Speaker 15: I don't think the court case as we said in the prepared remarks has a bearing on timing and when we start we're finding

No I don't think the court case as we said in our prepared remarks has any bearing on timing of when we start or finance This project.

Speaker 16: Okay, so we should assume getting started. Construction is kind of a priority at this point.

Okay.

We should assume.

Getting getting started.

Construction is it's kind of a priority at this point.

100% the firsthand.

Speaker 15: The first step is to get away on the management agreement. That's the legit.

We're waiting on the management agreement that's the linchpin.

Speaker 4: So as soon as we get that, we are out raising money and then starting construction. As soon as the management agreement gets approval from NIH.

John So as soon as we get that we are out raising money and then starting to design construction.

Construction, Yes, Susan management agreement gets approval from an ICC.

Speaker 16: Okay, and I guess any any guests as to as to when that's done is probably a tough one to handicap, but. I don't know if you guys have a.

Okay, and I guess any any.

I guess as to as to when that's done it's probably.

Tough one to handicap, but.

But if you guys have.

Now listen we feel like we're close it's tough to handicap, but we did make a couple of changes to those north work remarks, So we're making good progress.

Speaker 15: Now listen, we feel like we're close. It's tough to handicap, but we did make a couple changes so those North work remarks. So we're making good progress. Yes. Sounds good. I appreciate it.

Sounds good I appreciate it guys. Thanks again.

Speaker 1: As a reminder, if you wish to ask a question, please press star and 1 to be joined into the question queue.

As a reminder, if you wish to ask a question. Please press Star then one can be joined into the question queue.

Speaker 1: The next question comes from David Katz with Jeffrey. Please go ahead.

The next question comes from David Katz with Jefferies. Please go ahead.

Speaker 17: afternoon. Apologies if we're over discussing the F1 issue, but you commented earlier that room rates had come down a little bit. First, is that specific to your own portfolio or did you intend that that might be more of a broader market comment? And then, you know, how instructive is...

Afternoon.

Apologies if we're over discussing the F. One issue, but you commented earlier that.

Room rates had come down a little bit.

First.

Did you is that.

Specific to your own portfolio or did you intend that that might be more of a broader market comment.

How instructive is.

Speaker 17: you know, this F1 in terms of, right, you said Super Bowl is going great or looking great, but this one, you know, has backed off a little bit. How can that help us in the future figure out which events are good versus good?

F. One in terms of you said Super bowls and grades are looking great. But this one has backed off a little bit.

How can that help us in the future figure out which events are good versus great for you.

Look I think that was more of a broader market commentary and it's as simple as just looking at rates on expedia or kind of what hotels are being booked for now versus kind of maybe where rates were published going back.

Look, I think that was more of a broader market commentary. And it's as simple as just looking at rates on Expedia or kind of what hotels are being booked for now versus kind of maybe where rates were published, going back.

Much to a year ago. So it's all public data.

Monitored months to a year ago.

To all public data.

I think the other one is, as I said, I don't want to speak for you, but...

I think the other one is.

You said it so I don't want to speak for you, but I think we kind of know that sports works and at the time.

I think we kinda know that sports works in the town.

They just started to become a splutch down. And you know, whether that's the NFL or hockey or...

Vegas is starting to become a sports town.

Whether that's the NFL or hockey here or any other professional sports that are coming down we're seeing that it is.

or any other professional sports that are coming down, we're seeing that it's got great success. It's probably a little less complex than the equation of F1. You know, we haven't seen F1 come into the city or what the impact is.

Got great success, it's probably a little less complex than the equation of F. One we haven't seen one come into the city or what the impact is so.

Imagine our expectations of the F1 weekend will still be fantastic. I think it's going to be great for the guys on the strip. I think it's going to be a huge success.

Alright, Mike patients is that they have one weekend will still be fantastic I think it can be great for the guys on the strip I think it's going to be a huge success.

It was just a matter of, on a relative basis to maybe where expectations and where people were hanging rates in the early days. But that's happened before Las Vegas, it happens.

It was just a matter of.

On a relative basis to maybe where.

Expectations, and where people were hanging rates in early days, but that happens that's happened before in Las Vegas. It happens all the time and as Scott said Davis is going to be a learning experience for the Super Bowl you have 55 years of Super Bowl history, where it's always good in Vegas and now it happens to be here.

Yeah.

Perfect. Thank you very much.

This concludes our question and answer session I would like to turn the conference back over to Stephen <unk> for any closing remarks.

This concludes our question and answer session. I would like to turn the conference back over to Steven Cooney for any closing remarks.

Well, thank you everyone for joining the call. We look forward to talking to you about 90 days. Take care.

Well. Thank you everyone for joining the call and we look forward to talking to you about 90 days take care.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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