The stakes were sky high for Las Vegas’ first F1 race in over 40 years. The gaming industry, broadcasters and advertisers all had a tremendous amount riding on the success of the event.
A number of Hedgeye personnel were on the scene to see the spectacle unfold in person, including Founder and CEO Keith McCullough. Also in attendance were our Gaming, Lodging & Leisure analyst Todd Jordan and Communications analyst Andrew Freedman.
This morning on The Call @ Hedgeye Jordan and Freedman shared their insights from their weekend in Vegas, including the impact on their respective sectors.
Below is 1) a clip from The Call and 2) an excerpt from Jordan’s note today to Gaming, Lodging & Leisure subscribers.
TODD JORDAN: F1 | A ROLLERCOASTER AND A RACE
Watching a car go by every one and a half minutes didn’t seem like it could be much fun. We’re more fans of traditional American sports but we also like to be open-minded, so we gave F1 a chance this weekend. It was pretty cool. Obviously, the spectacle of the whole event was amazing but the race itself was actually quite interesting. Thankfully, we had some experts with us that really enhanced the viewing. We’d recommend a trip here for the ’24 version.
So moving from our highly uninformed race commentary over to a slightly more informed discussion of whether this was actually a success for our favorite hotel market. Was it the blockbuster, best weekend of all time in Vegas from a business perspective? Or, was it the colossal disappointment predicted by many in the press (and the investment community) over the past few weeks? We saw and heard all the chatter about cheaper airfares and $79 room rates at Circus Circus. You’d have to pay me $79 at least to stay at Circus Circus, but the trend was clear. Some hotels had to discount to drive close in bookings. Maybe demand needed to be stimulated and/or many fans just got priced out. Either way, the negativity was palpable heading into the event compounded by some criticism from the top driver in the world, Max Verstappen. A few days prior to the race he commented that the event was 99% show. Ouch.
After Thursday’s manhole-induced misstep during a practice run, sentiment could not have been worse. But things reversed pretty quickly as the weekend got underway (and Hedgeye folks started gambling). Maybe ADRs weren’t as high as some were expecting (although we’re not sure the final tally will be that far off), but the casinos were hopping. Gaming volumes were apparently very strong at least anecdotally, particularly at the high end (not us). The clubs were packed, and back to the race, it was one of the most exciting of the year. Even the Dutch, Mr. Anti-Vegas commented after the race how much he enjoyed it and can’t wait for next year’s race. Of course, he did win, so maybe it wasn’t 99% show, but the commentary from other drivers also seemed positive.
Today’s headline from the Las Vegas Review Journal read: “RESORT LEADERS CONCUR: F1 WAS THE BEST EVENT IN HISTORY.” It wasn’t just a race, it was a roller coaster. But at the end of the day, it seems that most people enjoyed the ride, especially the casinos. On to the Super Bowl! In the coming weeks, we’ll have some additional insight on the market, including a webcast with a Vegas market expert and a new installment of our Convention Bookings Tracker.
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