Caesars eyes non-gaming Dubai hotels for international growth
Having missed the Asian casino boom, Caesars Entertainment is betting on non-gaming hotels for international growth.
On Sunday, Caesars announced that it had inked a letter of intent with Dubai-based Meraas Holdings LLC to manage two luxury hotels and a beach club at Meraas’ man-made Bluewaters Island development. The five-star properties will be branded as Caesars Palace Bluewaters Dubai and Caesars Bluewaters Dubai.
The hotels, which are expected to open in Q4 2018, are part of Caesars non-gaming international expansion plans. Caesars hired a new executive team last summer to help guide its non-gaming ambitions and “unlock new growth channels,” according to CEO Mark Frissora.
Dubai is the largest city in the United Arab Emirates, a Muslim country with decidedly harsh views on the issue of gambling. On the plus side, consumption of alcohol by non-Muslims is permitted in licensed venues at upscale hotels, so gamblers attracted by the Caesars Palace signage will at least be able to drown their disappointment at the hotels’ 12 restaurants and bars.
In 2011, Caesars attempted to establish a non-gaming footprint by announcing a hotel project in China’s Hainan province, but the project fell by the wayside as Caesars’ financial problems mounted.
Closer to home, Caesars announced last week that it would be bringing its Harrah’s gaming brand to Northern California after inking a definitive agreement with the Buena Vista Gaming Authority, an entity of the Buena Vista Rancheria of Me-Wuk Indians of California.
Construction of the $168m, 71k-square-foot Harrah’s Northern California Casino broke ground last week and is expected to open to the public in 2019. Once complete, the property – located 32 miles southeast of Sacramento – will boast 950 slot machines, 20 gaming tables, a full-service restaurant and other amenities.
The casino will be developed, owned and operated by the tribe, while Caesars will provide brand licensing and consulting services. Caesars’ Frissora said the deal would generate “incremental revenue” for the company “without significant capital investment.”
Speaking of significant capital, Caesars recently disclosed its senior management compensation packages, which saw Frissora collect a total $29.4m in 2017, the year that Caesars’ main unit finally emerged from its multi-year Chapter 11 bankruptcy process.
While $16.5m of Frissora’s payday came via restricted stock, the company missed its most recent quarterly revenue targets and its earnings are still being outstripped by the interest on its debt. But hey, these are public companies, where remuneration meetings are formally known as ‘everybody gets a trophy day,’ so whatcha gonna do?
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