It will be investing USD 140 M in the property

Golden Entertainment acquired Stratosphere hotel-casino

The redevelopment plan includes the creation of a dedicated casino area conveniently located near access to the tower thrill.
2018-03-19
Reading time 2:42 min
Golden Entertainment, operators of the PT's Pubs chain have purchased a company that owns four casinos in Nevada, including the Stratosphere. The company has announced that it will be investing USD 140 M over three years in its newly acquired Stratosphere property.

In a press release issued Thursday announcing the company's financial results for the quarter ended December 31, 2017, Blake L. Sartini, Chairman and Chief Executive Officer of Golden Entertainment, commented, "Organic financial growth in 2017 in all of our operations, combined with our significantly expanded business across Southern Nevada following our acquisition of American Casino & Entertainment Properties, has positioned Golden Entertainment for continued growth in 2018. The addition of Stratosphere Casino, Hotel & Tower, Arizona Charlie’s Decatur, Arizona Charlie’s Boulder, and the Aquarius Casino Resort has significantly scaled our operations in the Las Vegas Valley and Southern Nevada with leading assets which are complementary to our unique platform of casinos, taverns and route operations. Notably, since acquiring the American properties in October, we are seeing encouraging cross-play trends, with our tavern customers visiting the Stratosphere, Aquarius and Arizona Charlies’ locations in increasing numbers."

“Our strategic priorities for 2018 include the ongoing integration and synergy realization from the American acquisition, the introduction of a single loyalty card program across all of our operations, and the commencement of focused capital investments at Stratosphere that we expect will further establish the property as a unique destination for visitors to the north end of the Las Vegas Strip. Since completing the acquisition, our conviction has only grown stronger that targeted, return-focused investment in the Stratosphere will enhance our guests’ experiences and allow us to drive financial performance at the property. Importantly, our phased approach to this project, including further investment in the room product and the development of existing unused space within the property’s footprint, will minimize potential disruption to our current operations and allow us to maximize this iconic property’s potential,” he added.

Golden Entertainment anticipates that the total investment for the Stratosphere redevelopment plan will approximate $140 million, with approximately $32 million budgeted for 2018.

Highlights of the Stratosphere three year redevelopment plan include:

  • A complete renovation of over 1,100 rooms, representing nearly 50% of the existing room base;
  • The addition of a unique gastro-brewery, featuring Golden Entertainment’s signature branded craft beer and menu, which will be connected with a remodeled, state-of-the-art sports and race book;
  • The addition of new steakhouse, noodle bar and other food outlets;
  • A refresh of the iconic Top of the World restaurant and Tower experience;
  • The installation of state-of-the-art digital signage and lighting for the property exterior;
  • The creation of a dedicated casino area conveniently located near access to the tower thrill rides to appeal to a younger visitor demographic; and
  • The transformation of existing unused space into approximately 50,000 square feet of meeting space targeted at modest-sized groups and conventions.

In addition, the Company is planning approximately $48 million of additional capital spending across the balance of its platform in 2018, inclusive of $20 million in maintenance capex. Other key capital projects for 2018 include:

  • The installation of a new slot management system and loyalty program;
  • The opening of six new wholly-owned branded taverns across the Las Vegas Valley; and
  • A remodeling of the hotel rooms at Rocky Gap.

The Company expects that total capital expenditures for 2018 and in future periods will be funded by operating cash flow.

Mr. Sartini added, “Going forward, we remain confident that the health and economic vitality of the Las Vegas Valley and the surrounding Southern Nevada communities provide a tangible foundation for the long-term growth of our business. Billions of dollars of expected new investment in the greater Las Vegas area in large-scale gaming projects on the Strip as well as in non-gaming venues continue to support growth of the Las Vegas economy. In addition, the local community’s support for professional sports, reflected by continued sell-outs by the Golden Knights and a building anticipation for arrival of the Raiders, has brought new excitement and visitors to the market. These factors and others have us excited for the future as we deliver on our goal of further enhancing shareholder value.”

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