Robust Visitation Aid Boyd Gaming (BYD), High Costs Ail

Core Viewpoint - Boyd Gaming Corporation (BYD) is experiencing growth driven by strong visitation, new property openings, and refurbishments, alongside solid contributions from its Online segment, although high costs remain a concern [1][4]. Growth Drivers - The local market in Las Vegas is a significant growth driver for BYD, with a reported 5% increase in Nevada tourism and a 20% growth in the convention business in 2023 [2] - Average daily room rates in Southern Nevada improved by over 12% in 2023, supported by upcoming events like the Super Bowl and a busy convention calendar [2] - Boyd Gaming is expanding its portfolio through capital investments and acquisitions, with ongoing expansion plans for the Wilton Rancheria Tribe property and interest in further expansions at Gold Coast, Blue Chip, Ameristar St. Charles, and Valley Forge in 2024 [3] Online Segment Performance - The Online segment reported an adjusted EBITDAR of $62.3 million in 2023, reflecting a 56.5% year-over-year growth, with expectations for 2024 EBITDAR in the range of $60-$65 million [4] - The introduction of sports betting in Ohio and the relaunch of Starts branded online casinos in Pennsylvania and New Jersey are expected to contribute positively to the Online segment [4] Concerns - Boyd Gaming faces challenges from rising costs, including wages, utilities, and property insurance, with total operating costs increasing to $2.84 billion in 2023 from $2.58 billion the previous year [6] - Specific expense increases include food and beverage (4.1%), room (7.5%), online (67.8%), and selling, general and administrative expenses (4.3%) [6] - The company plans to monitor economic conditions to assess the impacts of interest rate hikes and inflation, indicating that cost pressures may persist into 2024 [6]