The Covid-19 omicron variant impacted Caesars Entertainment's bookings in the final two weeks of December, but the new year is looking strong.
"Our fourth quarter was negatively impacted by additional Covid-19 restrictions implemented in several states starting in November," CEO Tom Reeg said during Caesars' fourth-quarter earnings call on Wednesday.
"Early results in the new year indicate a strengthening of consumer demand as restrictions have been lifted and demand levels normalize, especially at our regional, non-destination properties."
Occupancy for Caesars' Las Vegas properties was at 86% for the fourth quarter then fell to 75% in January. Occupancy to date in February has been roughly 80%, said Reeg, and Caesars anticipates the figure reaching the mid-80s in March.
"Group business cancellations peaked in early January and have been coming down quickly since then, so we feel good that we are set up well in Vegas going forward," Reeg said.
Update on the plan to sell a Strip hotel
In November, during the third-quarter earnings call, Reeg announced that the company plans to sell the real estate of a Las Vegas Strip hotel in 2022. Caesars currently owns and operates Caesars Palace, Harrah's Las Vegas, Flamingo Las Vegas, Bally's Las Vegas, The Linq, The Cromwell, Paris Las Vegas and Planet Hollywood.
"That sale is still in motion. The next time we talk about the Strip asset sale it will be to announce that sale," Reeg said, adding that it is part of the company's plans for investing in its digital operations and capital improvements in the rest of its portfolio.
Those investments include the $210 million reimagining of the Isle of Capri Hotel and Casino in Lake Charles, Louisiana. The property closed during the Covid-19 pandemic, then suffered damage in 2020 from Hurricane Laura.
Caesars is planning to reopen the hotel as the Horseshoe Casino Lake Charles in the fourth quarter of this year.
Las Vegas hotels profitable in 2021
Caesars Entertainment's Las Vegas and regional properties returned to profitability in 2021, while the company's debt service and investment in building its online sports wagering platform have weighed down the balance sheet.
Caesars' Las Vegas and U.S. regional properties posted net income of $641 million and $637 million in 2021, respectively, turning around 2020 net losses of $287 million and $338 million, respectively.
The company reported a fourth-quarter net loss of $434 million, down from $555 million during the final three months of 2020, while net revenues grew to $2.59 billion, an increase from $1.56 billion in the same period a year prior.
For all of 2021, Caesars' net loss was $1 billion, an improvement from 2020 when the Nevada-headquartered company reported $1.8 billion in net losses.
Caesars was purchased in 2020 by Eldorado Resorts, and the two companies merged, keeping the Caesars name. As of the end of 2021, the company is carrying $14.3 billion in debt.