The company that operates Station Casinos also gave an update on the Durango expansion and more projects.
Station Casinos executives say they’re well positioned to withstand a recession if one occurs because they believe current circumstances are different than they were during earlier economic downturns.
Stephen Cootey, executive vice president and chief financial officer of Red Rock Resorts, parent company of Station, said Thursday that recession worries that involve current trade wars are different from the downturns experienced during the COVID-19 crisis and the Great Recession of the late 2000s.
“But overall, we think about the resilience of the Las Vegas locals market, particularly Red Rock Resorts,” Cootey said during the company’s first-quarter earnings call with investors. “And when we look back at what’s been called typical recessions, Red Rock in fact grew in the recessions in the early ‘80s, the early ‘90s and the early 2000s. The customer values convenience, proximity and affordability. And that supports consistent visitation, even in softer economic environments, which is slightly different than the way the Strip reacts during a recession. Combine that with our efficient business model and a strong balance sheet, we’re well positioned, we believe, to manage through any recession.”
Capital projects underway
That assessment, if accurate, would be helpful to Red Rock, which is undertaking a series of capital projects at its Durango, Green Valley Ranch and Sunset Station properties.
Construction is continuing on the next phase of the company’s Durango master plan. That expansion will add more than 25,000 square feet of additional casino space, which will include a new high-limit slot machine area and bar. The project will introduce 230 new slot machines with 120 allocated to the high-limit room. As part of that phase, the company also is building a new covered parking garage with nearly 2,000 spaces, which will enhance customer access and provide infrastructure flexibility to support future growth of the property. The total project cost is around $120 million and is currently operating under a guaranteed maximum price contract with completion of the project expected in late December.
The company also is investing around $200 million for a complete refresh of hotel rooms at Green Valley Ranch and the property’s convention areas.
Work is expected to start in June with the majority of the rooms back in service by the end of the year.
Earlier this week, the company also announced plans to redesign the bingo hall at Sunset Station into a Stoney’s Rockin’ Country restaurant, bar and nightclub. The company already operates Stoney’s North Forty at its sister property, Santa Fe Station.
Cannibalization minimized
Red Rock executives also said after being open for more than a year, Durango is shaping up to be one of the company’s most successful ventures and that earlier worries about Durango cannibalizing the Red Rock Resort market are behind it.
“As we’ve noted on prior earnings calls, some cannibalization has occurred primarily at our Red Rock property as a result of Durango’s opening,” Cootey said. “However, we are encouraged that the revenue backfill is ahead of pace and early trends suggest the worst of the cannibalization impact is behind us. Consistent with our historical experience, we continue to expect full revenue recovery over the next couple of years, supported by the strong long-term demographic growth across the Las Vegas Valley, particularly in Summerlin, where the combined build-out of downtown Summerlin and Summerlin West is projected to add approximately 34,000 new households.”
In the first quarter of 2025, Red Rock reported net income of $86 million, a 9.7 percent increase over the first quarter of 2024.
The company’s board of directors also declared a 25-cents-per-share cash dividend payable June 30 for shareholders of record June 16, as well as a $1-per-share special dividend on Class A common shares payable May 21 to shareholders of record May 14.
