Good day, and welcome to the Eldorado Resorts 2019 First Quarter Earnings Conference Call. Today's conference is being recorded.
And at this time, I'd like
to turn the conference over to Joe Jaffoni. Please go ahead, sir.
Thank you, Derek. Good afternoon, everyone, and welcome to Eldorado Resorts' 20 19 Q1 conference call. Joining us today from the company are Chief Executive Officer, Tom Reeg and President and Chief Operating Officer, Anthony Carano. On today's call, we'll review the company's Q1 financial results and the ongoing success and progress against the company's key strategic priorities. We will then open the call to participants for questions.
This afternoon, Eldorado Resorts issued a press release announcing its Q1 financial results for the period ended March 30 one, 2019. The release is available in the Investor Relations section of the company's website at www.eldoradoresorts.com. And before we get started, I'd like to remind everyone that this call is being recorded and a webcast replay will be available for 90 days, the details of which are in today's press release. During today's call, we may make certain forward looking statements about the company's performance. Such forward looking statements are not guarantees of future performance and therefore one should not place undue reliance on them.
Forward looking statements are also subject to the inherent risks and uncertainties that could cause actual results to differ materially from those expressed. For additional information concerning factors that could cause actual results to differ from those discussed in our forward looking statements, you should refer to the cautionary statements contained in our press release as well as the risk factors contained in the company's filings with the Securities and Exchange Commission. Eldorado Resorts undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances that occur after the call. Also during today's call, the company may discuss non GAAP financial measures as defined by SEC Regulation G. The GAAP financial measures most comparable to each non GAAP financial measure discussed and the reconciliation of the differences between each non GAAP financial measure and the comparable GAAP financial measure can be found on the company's website at www.eldoronoresorts.com by selecting the press release regarding the company's 2019 Q1 financial results.
Thank you for your patience with that. And at this time, it is my pleasure to turn the call over to the company's CEO, Tom Rhee. Tom?
Thanks, Joe. Good afternoon, everyone. Thanks for joining the call. We reported 1st quarter 2019 adjusted EBITDA of $166,700,000 on a same store basis, up about 6.5 percent versus the prior year as if we had owned the Tropicana and Elgin assets and as if we had already divested the Pennsylvania assets in both quarters. 1st quarter is typically my least favorite to talk about because invariably the conversation turns to weather and this one was no exception.
I've heard enough about bomb cyclones and polar vortexes to last me for quite some time. We did we made an effort to quantify weather impact on our portfolio in the quarter. And there is some art to this, but our belief is that weather cost us $10,000,000 to $15,000,000 of EBITDA in the quarter. I think a good estimate for normalized EBITDA for the quarter is a little better than $180,000,000 which would have been up 16%, which foots with January before the weather hit us, we were up almost 21% for the month of January. And then we had 6 weeks of weather across the portfolio, hit the West and the Midwest particularly hard, hit the East as well.
In addition, we had a headwind in Colorado in the quarter with construction disruption that was more than we anticipated. Colorado EBITDA was down significantly as we improved. We redid we're in the middle of redoing every hotel room in the property as well as refreshing the casino. We get the hotel back completely in 2 weeks. We'll have the casino back by the end of this quarter.
So ahead of the busy season in Colorado, which was the intent and ahead of Monarch's prior projected opening. So that's all coming in as planned. There was a little more disruption than we were anticipating. But notwithstanding weather and Colorado disruption, we were able to post a strong same store EBITDA, growth performance of 6.5%. Margins expanded almost 300 basis points to just under 27 percent, which was very strong for us in the Q1.
There were particular properties that had very strong quarters, EBITDA growth of more than 20% at Mountaineer, at Lumaire in St. Louis and in Lake Charles. Scioto had yet another strong quarter of growth. So there are a lot of strength in the portfolio despite weather, but didn't get to the finish that we that the start foreshadowed given what happened with weather during the quarter. We have no complaints about strength of the consumer.
Strength our consumer remains very strong Absent that February and the 1st 2 weeks of March, we had very strong margins or volumes across the portfolio. Nothing interesting to say about April in terms of trajectory. You did have Easter calendar shift, which everybody is aware of, but April continues in the same vein as the Q1. And frankly, April ends up the least important month of the quarter by a wide margin by the time we're done. So we feel very good about how we're performing, where we're headed and the performance of the Q1 in the face of what we encountered.
In terms of we closed our Pennsylvania asset sales Presque Isle in January, Nemacolin in March. We used the proceeds of those sales plus some free cash flow that we generated to pay down over $200,000,000 of debt in the quarter. We in terms of where we are in the synergy process in Trop and Elgin, if you recall, we announced a combined $55,000,000 synergy target. As we sit here today, we're approaching $50,000,000 and we would expect to meet and then exceed the target before this calendar quarter is over. We continue to be supremely confident that we can take the existing portfolio in excess of 30% consolidated EBITDA margins over the next couple of years.
I'd also note that similar to our prior quarter call, we read the same newspapers that you read. So we read the same rumors about what we might or might not be doing. We're not going to comment on any particular potential transaction. We would reiterate that if you see potential targets that may become available that seem like they would fit our skill set, you should anticipate that we would take a hard look. Beyond that, I'd say Brett Juncker is not on our call today.
It's his first day as Chief Financial Officer, and I want to mention that Brett has joined us now. We didn't put him on a call the 1st day of employment, but we'll be bringing him around to meet a lot of you. He'll be attending a couple of the conferences that I'm attending coming up, and I'll bring him around in New York so that he can meet you. Brett brings multiple decades of experience in the space, has been an integral part of building Eldorado from a capital structure standpoint, has been involved in every major financing that we've done for the past decade. As I said on the prior call, he crossed with me at Bank of America when we were both much younger and slimmer.
He has he built JPMorgan into a powerhouse in the gaming space from an investment banking standpoint, has diverse experience both in M and A and financing up to and including the largest and most complex transactions that have happened in the space. So we're very excited to have. Brett. And then I'd finish my remarks by particularly noting Mike Whiteman and Rob Mushu, who were Regional Vice Presidents for us. Many of you have met them on property tours.
Both of them worked for us in excess of 30 years and really were 2 of the guys that I saw when I was on the investment side and we ultimately did the Shreveport deal that started this growth process for Eldorado and were guys that Mike moved to Louisiana, did the Shreveport asset then was the East Region VPs, now the South Region VP. These are guys that were asked to change how they operated their entire careers and very quickly became leaders in the organization. Both of them retired a couple of days ago. We have strong internal replacements that have taken their place, but we want to recognize their contributions to the company. We wouldn't be where we are today without the work that they put in.
And with that, I'll turn it over to Anthony to go deeper into property
level performance.
Thanks, Tom. And I'd like to echo those same comments on Rob and Mike, very important part of our company and will be an important part of Eldorado going forward, helping us out still. But good afternoon and thank you to everyone on the call. I'd like to take a few minutes to provide you with some high level operating perspectives before Tom takes over to review some additional details on the Q1 results. Looking at our operating segments, I'll start with the East segment, where adjusted EBITDA increased 4.5% year over year to 39,500,000 dollars as the adjusted EBITDA margin rose 130 basis points to 25%.
Adjusted EBITDA for Siota rose for the 17th consecutive quarter and Mountaineer continues to have some strong catalysts with the lifting of the smoking van as well as the opening of the sports book at the property.
Adjusted EBITDA for
the South region was up 8.5% on a 6.6% decline in net revenue with 5 of the 7 properties growing adjusted EBITDA, including Lake Charles, Shreveport and Lula, all rising by double digits. In Lake Charles, we're back on track as we're now past the major portion of the bridge and roadway construction project that was impacting traffic patterns to the property. In Baton Rouge, we continue to feel the impact of the smoking ban that was implemented in the Q2 of 2018, but we'll anniversary that at the end of June. In the West, we experienced challenging weather in Reno with significant snowfall impacting driving traffic to the market on 24 to 28 days in February and the 1st 2 weekends of March. As Tom discussed, Blackhawk was impacted by construction disruption in the casino and the hotel.
Those two issues were the drivers behind the adjusted EBITDA for the region declining 8.2 percent to $24,000,000 We expect to complete the rooms and the casino renovations in Blackhawk later this quarter, which will position us to continue our strong performance as the Monarch Casino expansion comes online in the second half of the year. As we've discussed before, we expect the Monarch expansion will help grow the overall Blackhawk market and we'll be in position to capture our fair share of that market growth. The Midwest region, adjusted EBITDA rose 5.2% on a 4% revenue decline with adjusted EBITDA up at all six properties as the property level adjusted EBITDA margin rose 330 basis points to 37.5%. Cape Girardeau and Caruthersville both had double digit EBITDA increases. Finally, for our Central segment, adjusted EBITDA rose 9.1 percent on a 3.5 percent revenue decline with the property level margin increasing 3 70 basis points to 31.8%.
Elgin and Lumiere both had double digit adjusted EBITDA increases. In summary, the record Q1 results reflect the ongoing growth we are generating from our implementation of best practices across the entire property portfolio, our ability to quickly achieve targeted synergies at our recently acquired properties and the initial upside we are getting from the expansion of sports betting in several of our markets. The results also reflect the tremendous commitment to excellence our team members have across the company. It's these team members that drive our ability to offer best in class guest experience at our properties, while remaining focused on our operating efficiency initiatives. With these drivers, we remain on track to achieve record results again this year.
With that, I'll now turn the call over to Tom for detailed insights on the Q1 financial performance and additional details on our balance sheet and capital structure before we open up the call
to Q and A. Tom?
So I would just finish by saying, we're pleased with the way Q1 came out in the face of the weather. We continue to see strong consumer. Nothing has changed in terms of our outlook for the year. We're not a I know we're not a guidance company, but I tell you I don't see any full year numbers out there that trouble me. We feel real good about where the business is.
We feel that we have a very strong standalone path in this portfolio. As I said before, I think we can get this existing portfolio to $900,000,000 to $1,000,000,000 of EBITDA. We've got the growth the built in growth over time from the sports betting partnerships with William Hill and Stars Group. We've got the real estate development in Pompano with Cordish. So we feel very good about our stand alone path.
We also see we also are confident we can find opportunities in the M and A space that would be significantly accretive to us. So we think we can continue operating from the same book playbook of significant organic growth that outpaces the rest of the sector by a multiple in addition to accretive M and A added on in the future. And with that, I'll turn it back to the operator for questions.
Thank you. We'll take our first question from Carlo Santarelli with Deutsche Bank. Please go ahead.
Hey guys, thank you. Tom, you had said when we spoke on your 4Q call that you kind of expected you felt you could be at a 30% margin run rate as we exited this year. Obviously, given the weather challenges in the Q1, that might put you in a little bit of a bigger hold than maybe you thought you would have been or I shouldn't say hole, but might be a little bit lower than where you thought you would have been at that point in time. Is that 30% target now maybe a 2020 event? Or do you still feel like there's enough here where you can get back to that level even with kind of a $10,000,000 to $15,000,000 of weather hit in the Q1?
Well, what I would say, Carlo, is I never would have given you that level of specificity of guidance. I didn't say 30% by the end of this year. I said the same thing that I said in my prepared remarks that we think we can get this portfolio to in excess of 30% margins. Don't view 30% as where we think we can get it, we're going to get it higher than that. We didn't put a time frame on that.
If I had to put a time frame on that, I think a 30% margin target to me, as we sit here today, is either for the full year 2020 or we're run rating at that at some point in 2020 and then surpassing it. But that was a what you stated was a common misconception of our remarks from the prior quarter that we had set a specific date and a 30% target. We think we'll do better than that, and we haven't given a specific date target.
Understood. Understood. My thought. Just then if we could, just one quick follow-up on the weather impacts. Obviously, it's the West clearly in Reno kind of took, it looks like a good chunk of the brunt of it.
If you could kind of parse out that $10,000,000 to $15,000,000 to the extent you guys are able recognizing it somewhat difficult between the segments as to kind of where you felt it most pronounced?
I would say the West was half of it. I'd say the Midwest was if you're 7.5, I'd say another 4 or 5 was the Midwest and then the rest was Central and East.
Great. Thanks very much.
Thank you. Our next question comes from Dan Politzer from JPMorgan. Please go ahead.
Hey, good afternoon, everybody, and thanks for taking my questions.
So the first one, I know you guys
I'm not going to ask you specifically about some of the M and A and where things stand. But I guess, can you help frame, I guess, there the size of potential deals? How do you think more generally about financing and weighing the pros and cons of maybe partnering with REITs? And how do you think about potential regulatory hurdles and things like that, just in the broad scope of M and A and how you evaluate it?
I mean, I would say we in terms of REITs, REITs are just a financing tool for us. We don't want to be heavily OpCo. So you shouldn't expect REIT financing to be the dominant piece of any trade that we do. In terms of antitrust that's deal specific, it would depend on where your overlap is and how material that is to the business and how you think what you think you could do around it. In terms of what we start with in a transaction is what can we do with this portfolio of assets that's different from what the current ownership is doing?
How can we quantify that? What level of conviction do we have? And then we start building what can we pay? How would we build the capital structure, what do borrowing costs look like and do all those line up with what the target is looking for. So there are typically dozens of reasons transactions don't happen.
That's the case in any transaction that hasn't happened yet. But we're constantly looking. And you can see by our track record that we're pretty careful about building our expectations around what we can do. And we've got a well demonstrated track record of significantly exceeding targets very quickly. You shouldn't expect us to be giving you a target that's over a very long period of time.
Most of what we do and what we have historically done is very quick turn synergies. We're talking about getting to targets in Trop kind of inside of 8 months of closing. And that's typical of what we've done in the past, and that's what you should expect in the future. To me, improvement beyond that becomes, I guess, you can call it synergies, but it's really just maximizing your own operating efficiencies. At some point, you own these things and it's not a synergy anymore.
All right. That's helpful. And then I guess piggybacking on the Tropicana synergy comments, I know you mentioned that you think you're going to there's probably upside there and you'll probably see those targets fairly soon. Can you,
I guess, talk about some
of the opportunity that lies ahead there? And where do you see the opportunity across the portfolio? Is it marketing? Is it labor? And just trying to give us some more color there as far as where the upside could be.
Yes. I mean, we're pretty methodical in the way we tackle this stuff. When we announce a synergy target, it's typically going to be a lot of corporate and labor heavy early on. And then it's going to move to operating level, both labor and then the upside typically comes from as we drill down on marketing, and I know I've used the analogy with you before, it's akin to an assembly line where we have properties that have been on the line for a very long time now. And we're tweaking and testing different changes to how we worked and then we've implemented them in other properties.
And the one that gets put on the line at the front of it, we're going down that list of items that had worked in numerous acquisitions in numerous locations across a number of years and just taking them off 1 by 1. And so it's just basic blocking and tackling and tightening the operating level. And I would say, when you go out and you want to talk to 3rd parties about what they think we can do synergy wise, I will promise you they have no idea what the hell they're talking about. So when someone tells you we can't get to a number that we put out there, I would point to our track record to date, and I'll stack that up against anybody who wants to say we can't do what we say we're going to do.
All right. Got it. Thanks so much for the detail.
Thank you. We'll next go to Chad Beynon with Macquarie. Please go ahead.
Hi, afternoon. Thanks for taking my questions. First, wanted to start with revenues. I know it's much less of a focus, but just because, Tom, you called out the weather impact, I think $10,000,000 to $15,000,000 on EBITDA. Revenues year over year were down about 4.5%.
And if we assume, I guess, 50% flow through on that $10,000,000 to $15,000,000 EBITDA, that would have gotten you to roughly flat from a revenue standpoint. And I just wanted to ask, is that how we should think about the business? Or is there still a lot of kind of intentional pruning, particularly with the recently acquired properties that would result in negative year over year revenues? Thanks.
Yes, Chad. Thank you. I typically model us in terms of reported revenue at flat plus or minus 100 basis points. When you're early on in acquisitions, you're probably going to move toward the right side of that range. And as you get further out, you'll move toward the left side.
So your add back is probably appropriate.
Okay, great. Thank you. And that's kind of the right way to think about it, roughly going forward. I mean, not that you're giving guidance, but just generally, just because you're giving margin targets, just want to make sure people weren't talking about the revenue?
That's how I would model it.
Okay, thanks. And then separately on Florida, obviously nothing to report yet, but has there been just any movement or just any updates that are getting you closer to a date when something might be finalized and we'll be able to see more action on the ground there?
Yes. I'd say there's I'm thinking that legislative relief in terms of decoupling is unlikely in this session. There's the possibility of a special session for gaming later this year. We're going to operate under the assumption that horse racing is going to be around for a while and we're going to you should see us come out with something in the relatively near future that shows design with racing remaining at Pompano for the time being.
Okay. Thank you very much. Best of luck.
We'll next go to Barry Jonas with SunTrust. Please go ahead.
Yes. Hey, I did notice that David Cortish had a presentation a few nights ago in Florida and he put out some preliminary specs. Just curious if that's still too preliminary to give a little more detail. I think you specifically said a summer 2020 groundbreaking. It's too early for us to discuss that with investors.
David made a presentation to the local community on scope and talked a little bit about timing. But we will be back to you in the relatively near future with specifics. Okay, great. And then Baton Rouge, any updated thoughts on moving the casino to the atrium there? Still looking at the potential for that project.
We're really our work to date has been getting our arms around a property that was really struggling in the face of smoking ban and Mike Whitemane got right in and turned it for when we took it over, it was an EBITDA loser. And he has made significant improvement to the point where it was a contributor in the quarter and hadn't been for a little while under TROP and that's been our focus to date. But we are continuing to consider what we do in terms of moving into the Atrium, but no plans to announce at this point. Okay, great. And then just last for me.
I'd love any more color you can give on sports betting now that you've been operating another quarter, just whether it's direct contribution or visitation driver? Yes. So direct contribution, all we've really had since we opened the book in terms significant events is the NCAA tournament, and we did quite well across the portfolio there. But we do see it bringing in a customer base that has not been coming to our properties at SKUs younger. Interesting anecdote for us is Mountaineer was the highest rate in the portfolio in the quarter.
So sports betting has done considerably well at Mountaineer, so better than any property that we've got in terms of right. And you saw EBITDA in the quarter was up almost 30%. So it drove volume throughout the property, which is what we would expect. We're encouraged to see legislative action in a number of states, and we're working with William Hill to figure out how to capitalize in states where we're going to be able to offer it shortly. So we're it's developing as we would have expected.
We're here in Atlantic City today and Atlantic City's book, if you haven't seen it, turned out beautifully. So we're very pleased with sports betting to date. And we were among or if not the most bullish among the operators going into it, and it's met our expectations thus far. Great. Thanks so much.
Thank you. We'll next go to Harry Curtis with Instinet.
Hey, good morning or good afternoon, everyone. It's I wanted to just quickly follow-up on your comments about sports betting's impact in Atlantic City. Is there could you give us some sense of what you think the lift in visitation and table play is? You've made that comment in your
Yes. It's hard to parse it out. We're really what I can give you is table drop is up meaningfully on days where there are significant sporting events, which is obviously a very small sample in the Q1. So I don't want to extrapolate from there. I'd tell you Atlantic City as a whole for us is up about 4% in EBITDA since the openings of Hard Rock and Revel.
I think our book, certainly in the Q1 helped us there versus peers. Our performance in this market has been well in excess of what we were expecting given the competitive environment we were coming to, and we've really just started to pull some levers here. So we think sports has been another addition to the trough that's had great momentum and it helps continue it in the Q1.
Okay. And then my second question, going back to your comment about the existing portfolio potential is $90,000,000 to $100,000,000 to $100,000,000 to $1,000,000,000 of $900,000,000 to $100,000,000 to $1,000,000,000 of EBITDA. I will eventually get that out of my mouth. How much CapEx do you think is needed to get that growth versus being driven by cost cutting, which it sounds like you've got a fair amount of runway on versus kind of same store growth revenue growth assumptions?
So the capital we're kind of winding down the capital program in Reno with the renovation of the Silver Legacy that will go into 2020. That's you're probably talking about $40,000,000 ish by the time we're done at legacy. We'll do $75,000,000 the Lake Charles land base move that we've discussed $75,000,000 to $100,000,000 of costs that spread over 2019 2020. The remainder of the $35,000,000 that we're spending in Blackhawk. And then there'll be a lot of development spending in Florida that will not be on our balance sheet that's CapEx that will drive revenue to that property.
All of that is in our target of getting to $900,000,000 to $1,000,000,000 So there's both a growth element through investment capital as well as continued operating improvements as we drill down on the way we acquire customers.
Do you think
the biggest piece of that contribution is Florida?
I would say, yes. From a growth standpoint from here, the biggest delta we've got in an individual property is Florida. I think you're talking about better than 2x what it's doing today in EBITDA. We don't have another property that's that dramatic.
Got it. The demographics are in your favor. I appreciate it. Thank you.
Yes. Thanks, Harry.
And we'll next go to David Katz with Jefferies. Please go ahead.
Hi, afternoon everyone. So I wanted to ask about that your kind of broad based reaction to 2 markets. One is Atlantic City where you're entering now for the first time. And the property, it's well known, was the heaviest promoter in that market. But it is in a pretty competitive set of circumstances at the moment.
And the second market is really Las Vegas. And sort of how you think about the strip in the context of how you've done what you've done? And then I have one follow-up question.
I would say we think about them both similarly in terms of destination market versus regional where your customer is coming infrequently and staying for a longer period of time, that's a different marketing model than the traditional regional market from a customer acquisition standpoint, and it impacts your pricing, your hold what you offer games wise. We've operated in Reno longer than we've operated anywhere else. So we grew up in a market like that where we are a destination property because of our location adjacent to the interstate and downtown. So we have the longest experience anywhere we've got in a market that's similar to Atlantic City and Las Vegas. And in terms of Atlantic City, we did we heard all we saw the hand wringing about getting into Atlantic City and how competitive it is.
And we wrung our hands ourselves a bit in terms of is this somewhere that we want to go. Our early experience has been strong from in terms of our own performance, the property that we purchased, the management team that we inherited and the opportunity that we see to do the sorts of things that we have done in terms of improving property. So we see a ton of upside in Atlantic City from here. And as I said, we've just started pulling levers that we typically pull. So we thought we would be taking over a property that was down 10% plus in EBITDA due to new competition.
And Steve and Jason and the team here are delivering a property that's actually grown EBITDA since the market expanded the way that it expanded. So we feel very good about Atlantic City. And we recognize Vegas is a competitive market. And if we were ever to go there, we would go in as we did here with eyes wide open. But we're competing with people in Atlantic City that we would that are in the Las Vegas market, and we've done just fine.
Got it. And one more question, if I may. You touched on this a bit earlier about your specific approach. When there is debate around the ability to continue processing what you have, The question comes up about falling revenues and growing EBITDA. And the heart of my question is, how far can do revenues flatten out at some point or do they continue to trim their way back while EBITDA grows?
And is that a are those trends that can continue over a period of time? And I should say that I asked the question in the context that our rating speaks for itself.
Yes. And I would look, David, I would tell you and we've had this conversation before.
Our sense is you'll have it again.
Yes. What you see in reported revenue in our sector as a whole is does not reflect what's happening with the customer. So we have been growing same store EBITDA at 3 to 4 times the rest of the space for multiple years at this point. Did it again this quarter. That cannot happen unless we are growing the dollars that the customer is actually spending from his pocket faster than anyone in the space.
It's the only way that happens. There is not enough labor or COGS to cut for that not to be the case with the performance that we've been generating. Our job, our customers want to come to our properties. What we tell our operating teams is, it's our job to get out of the freaking way as much as we possibly can. And the way that manifests itself in reported revenue is reported revenue is going to be in that flat to down 1% in a quarter where there's weather, what are we down?
4%. It's not reflective of what's actually happening. We our customer acquisition spend was down in the quarter more than 12%. I don't know what others are doing because I don't get to see that number in other companies, but there's no way it's anywhere close to that. So I would encourage you to think of revenue in terms of dollars out of the customer's pocket, not what gets reported to the SEC.
You should not be rewarded if you and I give away a room and you book it at $75 and I book it at $50 you shouldn't be viewed as growing more than me. All you've done is chosen a different accounting metric for the cost of the room that you gave to a customer for free.
Got it. I appreciate it. Thank you very much.
Thank you, David.
Thank you. And our final question in the queue comes from John DeCree with Union Gaming.
Hey, Tom. Thanks for taking my question. Maybe to build on that discussion a little bit and a comment you made in your prepared remarks about how you're feeling about the customer today, still strong, net of any weather impacts in the Q1. I was wondering if you could elaborate or qualify at a high level some of the things that you're seeing that gives you confidence or comfort? Is it on the slot floor, F and B, frequency of visits, anything like that, that you could
give us
to qualitative commentary on the customer so far this year?
Yes. I would say the only softness we have seen is really there's 3 areas of softness in the 1st 4 months of the year. It's our customers could not get to our property. And Reno as an example, when there's as much snow as there is in Tahoe in March in February March, literally the road to our property is closed. So we rely on traffic coming over the pass from 80.
When the pass is closed, we're not going to do very well. In the Midwest, when people will not leave their homes, when they're being when it's 40 below and they're being warned not to leave their homes, we're also not going to do very well. And then Easter weekend, wherever it falls in the Q1, is going to be a lousy weekend if it's not comping to Easter weekend. Other than those three events, our business has been strong like it was in the Q4. As I said, we were up over 20% in EBITDA in January.
We ended up March EBITDA up double digits on a percentage basis with the first two weekends washed out. So the difference between those numbers and what we reported is the 6 weeks of leather in the Q1. And you wish it were what you want. You're always going to end up worried about weather in the Q1, but what you want is a cadence where you have weather, you have a break, you get the pent up demand, you get a couple of other cycles of that. This was an odd circumstance where you had 6 weeks of virtually unbroken weather across much of the country.
You don't get all that pent up demand back, and that's what we experienced in the Q1. But nothing has changed that we can see in underlying demand. When the customer can get to our property, they get to our property and they spend.
Thanks, Tom. That's helpful. One more question, perhaps in the context of 1Q or maybe more broadly, if it applies. And that's regarding the cadence or activity in promotional across the industry and marketing spend. If you've noticed when some when there is weather and soft weekends, are your competitors chasing business?
I mean, did that environment change at all? Just overall thoughts on the rational level of promotional activity in the industry and if that was out of line in the 1Q because of weather?
The short answer is I don't know. We don't focus on what others are doing nor do we respond to it anymore. What I would say is February was enough of a disaster volume wise that we were keen at the end of the month to go to our regional VPs, our GMs and tell them you're not going to like what your February numbers look like. There is no promotion that was going to get people to come to Reno when I-eighty was closed or to come to a Midwest property when it was 40 below, make sure that we don't chase. Because that's the mistake that you make is when you have a month like February where everyone agrees, hey, we're going to struggle, you look at your volumes and you say, what can we do to get people back and you throw a bunch of promo at them and then the people come back when the weather breaks and you attribute it to promo.
That's the mistake that we don't make anymore. And so we can only speak to us. We were disciplined and this is where we shook out and you can see where everybody else shook out.
That's helpful. Thanks for all the color, Tom.
And gentlemen, we have no further questions in
the queue at this time. All right. Thanks everybody for your participation. We'll be at a few conferences. We'll see some of you.
If not, we'll talk to you after 2nd quarter.
And ladies and gentlemen, that does conclude today's call. We do thank you for your participation. You may now disconnect.