Golden Entertainment said record summer heat and reduced play among lower-tier players cut into revenue and adjusted earnings during the third quarter, especially at The STRAT. Trends, however, are picking up to end the year.

Charles Protell, president and chief financial officer, said total revenue from existing operations declined 5% in the third quarter and consolidated EBITDA declined 21%.

“Our third quarter was challenging for both our casino and tavern segments with the most year-over-year declines in July,” Protell said. “Las Vegas recorded record heat this summer, which contributed to lower visitation at our casino properties and local taverns. In addition, we continued to see weakness in the lower tiers of our database, as those consumers have reduced their discretionary spending in the current economic environment. Despite these challenges, we see the third quarter as the lowest level of financial performance for our portfolio, given October trends and our outlook for the remainder of the year.”

Golden’s Nevada casino-resorts segment saw revenue decline 6% and EBITDA fall 20%, with most of that coming at The STRAT on the Las Vegas Strip.

“Our weekend occupancy was slightly up year over year. However, our weekday occupancy was down almost 6% to the prior year and spend per guest also trended lower,” Protell said.

Las Vegas occupancy and daily room rates were weaker in July, particularly for mid- to lower-tier properties. Without direct meeting space, The STRAT wasn’t able to benefit from recovering convention business in September to the same extent as other Strip properties, Protell said.

“For The STRAT, the fourth quarter looks stronger than the third and we anticipate stable year-over-year performance, with opportunity for growth in 2025 from returning midweek occupancy and increased spend from our core customer.”

In Laughlin, despite lower visitation and revenue, the properties increased market share in the quarter and reduced operating expenses. Their riverfront bingo room continued to drive local business to help offset lower visitation with one less major concert, Protell said.

For Las Vegas locals casinos, revenue declined 7%, while EBITDA declined 15%, Protell said. He cited seasonality and decreased spending from lower-tier customers.

“Our Arizona Charlie’s Decatur property was further impacted by disruptions from room renovations, which were completed mid-September,” Protell said. “The largest revenue and EBITA percentage decline in our Nevada locals casinos continues to come from our smaller Arizona Charlie’s Boulder property, which caters to our most value-oriented guests. Our Pahrump casinos remain stable year-over-year.”

Protell expects stable performance in the fourth quarter for all locals properties, which will be helped by the Las Vegas promotional environment moderating.

Nevada tavern revenue declined 2% during the third quarter and EBITDA declined 29%, with margins negatively impacted mostly by elevated operating expenses associated with seven new taverns and the last Nevada-mandated minimum wage hike in July.

“Our tavern customers were also impacted by extreme summer heat and less discretionary spending,” Protell said. “We typically see our new taverns stabilizing within nine to 18 months of opening or acquisition and we expect these last seven to follow the same pattern.”

Protell said Golden hasn’t seen a lot available from a mergers-and-acquisition standpoint that they would have interest in, because there’s a disconnect between buyers and sellers. He said declining interest rates, however, will help that environment in 2025.

“We’re looking for (whole assets), but there aren’t many out there,” said CEO Blake Sartini. “That would be our preference in moving the needle for valuation at Golden, given the strength of our balance sheet. We’re considering all alternatives at this point.”

Sartini said historically around presidential elections, they see consumers in the short term “cautiously spending” before and even after.