Red Rock Resorts announced significant expansion plans for its Durango property, driven by customer demand for additional amenities. During the company’s third-quarter earnings call on October 31, 2023, Executive Vice President, Chief Financial Officer, and Treasurer Stephen Cootey detailed an ambitious $385 million expansion set to begin in January 2024. This initiative follows a current expansion expected to conclude by the end of 2023.
Cootey highlighted that this new phase will increase the existing facility’s footprint by over 275,000 square feet. The expansion will introduce nearly 400 additional slot machines and various new amenities aimed at enhancing the guest experience. Features will include a state-of-the-art 36-lane bowling facility, luxury movie theaters, new restaurant concepts, and multiple entertainment venues. Cootey emphasized that these additions are in direct response to customer requests for diverse leisure options.
“This phase of growth at Durango will enhance our ability to capture additional market share and drive sustained growth in the local market,” Cootey stated. The project is being carried out under a guaranteed maximum price framework, ensuring financial accountability.
The expansion is strategically aligned with demographic changes in the area. Cootey noted that over 6,000 new households are expected to emerge within a three-mile radius of the property in the coming years. This growth is complemented by the ongoing development of Downtown Summerlin and Summerlin West, which is projected to add approximately 34,000 new households.
This second expansion follows a current project that will add more than 25,000 square feet of casino space, including a new high-limit slot area and bar. This $120 million initiative will increase the gaming capacity by adding 230 new slot machines, with 120 of those located in the new high-limit area. Cootey confirmed that this project remains on budget and is on track for completion.
Enhancing customer access is another priority, with a new covered parking garage planned to accommodate nearly 2,000 vehicles. This infrastructure upgrade is intended to support future growth and improve the overall visitor experience.
In a record-breaking third quarter, Red Rock Resorts reported its highest net revenue and adjusted cash flow in history. For the quarter ending September 30, 2023, the company documented a net income of $76.9 million, or 68 cents per share, on revenues of $475.6 million. This marks an increase from the previous year, where net income was $55.4 million on revenues of $468 million.
When analysts inquired about market performance, Scott Kreeger, President of Red Rock Resorts, clarified that the locals’ market operates under a different model than the Strip properties. “The Las Vegas locals market is fundamentally different. It does not rely on heavy tourism or conventions. Our business model offers value to both local guests and out-of-town visitors,” Kreeger explained.
As Red Rock Resorts embarks on this significant expansion, the company aims to strengthen its position within the local market, responding proactively to customer needs while capitalizing on the area’s growth dynamics.
