Durango looks forward to growing future on 1st anniversary

Dave Horn noticed Durango’s quick and lasting impression on the Las Vegas locals gaming market this summer when the resort-casino’s pool and lounge were lively on a Monday evening.

“A lot of folks around us, from hourly team members to chairmen and CFOs and COOs, all live around us in this area,” Horn, the property’s general manager, said. “That kind of customer dictated our success… Once the pool got open, it was doing revenue that was similar to a Thursday and a little bit of Fridays. That was pretty shocking.”

Station Casinos’ most recent ground-up resort project opened one year ago Thursday with an immediate impact on the valley. The $780 million project – parent company Red Rock Resorts’ first newly built resort-casino in 15 years – picked up customers in a growing region of the Las Vegas Valley and showed the market just how the company planned to execute on its bullish growth goals.

One year since Durango’s opening, management is preparing to expand the property and incorporate its successes into future development.

Breaking expectations

Executives say the property’s new approaches to design, natural light and food and beverage outlets were a large part of the successful first impression. Red Rock Resorts President Scott Kreeger highlighted The George – a mix of a restaurant and race and sportsbook – and the Eat Your Heart Out Food Hall that features personalized restaurant space for some of the 11 stalls.

“From a culinary perspective, we stretched the boundary of what you typically see in locals casinos,” Kreeger said.

That guest feedback was notable in financial results. Wall Street analysts regularly ascribe the year-over-year increased monthly gaming wins for the Clark County locals submarket to the resort’s addition to the market.

Macquarie gaming analyst Chad Beynon said Durango’s out-of-the-gate financial success is estimated to be more than $100 million annually in one measurement of revenue, a return on investment of 15 percent – a rare, quick pace compared the typical ramp-up time for a new property of two to three years. That estimation doesn’t include the market cannibalization at Red Rock, the company’s other luxury resort-casino about 8 miles away.

It’s a contrast to their last upscale resort-casino project at Palms. Red Rock Resorts purchased the off-Strip resort-casino on West Flamingo Road for $312.5 million and invested $620 million in renovations, ultimately selling it to the now owners, the San Manuel Gaming and Hospitality Authority, in 2021 for $650 million.

“I think the Palms came in a bit light of expectations because it was a place that was designed and built for locals and for tourists,” Beynon said. “I think because of the wealth in the Las Vegas Valley, the population growth (in southwest Vegas) – Durango really just kind of hit that in the center of the bullseye. It’s an aspirational luxury, there’s lots of good spending power in that part of the city. And other offerings were a little tired for that consumer.”

Future development

Positive reception spurred quick work of the expansion plans. Station previously announced its plans to grow the casino by 25,000 square feet and 230 new slot machines, including a new high-limit slot and bar area. The first phase expansion will also include an additional parking garage with over 2,000 spots. Executives told Wall Street investors in the company’s third quarter earnings call Nov. 8 that the project is expected to cost $116 million.

Kreeger said the management team then plans to move forward with either an entertainment focused phase – which could include the traditional Station Casinos offerings like bowling alleys and theaters – or a resort expansion that adds more hotel rooms, meeting space and a spa.

“At that point, Durango would be a fully integrated resort, pretty close to the size of Red Rock,” Kreeger said. “First phase is to get the garage done, and then we will move onto other phases as we evaluate the market and our options.”

Horn highlighted the high-limit gaming room – which is currently placed along the western wall of the casino – in the first expansion.

“Speaking to high-limit gaming activity has become a focus of what we do,” he said. “An elevation of the locals arena – we’re kind of ‘local luxury.’”

Decisions on which phase to go with next will be based on the growth patterns in the neighborhood. Several multifamily residential and commercial projects are under way or have been recently completed near the resort, including the UnCommons mixed-use development and apartment buildings.

“There’s still a lot of growth going on around us,” Horn said. “It’s still an exciting area. I think it’s going to flow well for the next year or two.”

Kreeger said the management team is also working through design and entitlement plans for resort-casino developments in other areas. At top of mind are efforts in Henderson’s Inspirada community and on Cactus Avenue near Las Vegas Boulevard.

It’s unlikely that Durango’s phased expansions and new builds would have shovels in the ground at the same time, Kreeger said. Leadership wants to “keep our options open” and monitor the economy and demographic trends in the region before committing to doing two projects at the same time.

Benyon said the Fertitta family-run company appears to be taking a disciplined approach to development.

“While they are very positive and bullish on the consumer and the long-term demand from that market, I think they obviously took some learning away from their development of Palms and what happened in the housing market prior to that,” Beynon said.

Contact McKenna Ross at mross@reviewjournal.com. Follow @mckenna_ross_ on X.