Keith Smith: Yes, based on how we could evaluate what happened in the quarter.
Dan Politzer: Got it. That’s it from me.
David Strow: Our next question comes from Shaun Kelley of Bank of America. Shaun, please go ahead.
Shaun Kelley: Hi, everyone. And thanks for taking my question. I think we’ve covered a lot of different angles on locals and regionals. So maybe I’ll just tackle downtown briefly. You called out pedestrian and foot traffic there obviously, keep some specifics around the Hawaiian segment, too. But just kind of any theories on the pedestrian level there, just given that you did have Super Bowl in market in general, traffic levels across the strip have been pretty good and we kind of think they should be decently correlated. So it’s not a market that we get quite as much information on. Just any thoughts about – from your operators about what’s going on there?
Shaun Kelley: No, I think we were surprised by the slowness, if you will, of traffic on Fremont Street and the overall declines in traffic Downtown generally as we watch the numbers, outside, obviously, the Hawaiian business for us is a large chunk of our overall revenue stream, gaming revenues were Downtown. So that had an impact. But really no theories around the specific slowdown kind of retail customers downtown. It just – it was just soft for a few months. Now again, as we said, Hawaiians are picking back up, it feels like general traffic Downtown is picking back up. But no – I can’t put my finger on an explanation.
Shaun Kelley: Got it. And then just same for local, I think this is a repeat, so apologies for making you do it. But we just disaggregate that local market softness, that component of the third. Is that a traffic problem, i.e., are these people going somewhere else and being attracted in by those promotions? Or is it just like a CO problem, there’s not quite spending as much.
Keith Smith: Well, once again, we break it into kind of our core customers, which as I’ve said a few times here in the locals market continue to grow, and they continue to grow just to make sure, Josh was trying to ensure people kept us in context, they continue to grow in the first quarter over a very strong first quarter of last year. So it’s really a very good sign that our core customers are continuing to show up and spend more money. It is the retail side, the lower end customer where we’re seeing the shortfall in the lack of spend. And is it the economy? Is it they’re going to a competitor that they’re sharing their wallet. A lot of these are unrated players. So we actually don’t know exactly what the – how they’re spending their dollars, whether they’re not spending them, whether they’re sharing them with another property. We just don’t have the visibility because they’re not rated, so…
Shaun Kelley: Got it. Thanks. I know that was repeat. I appreciate it, Keith.
David Strow: Our next question comes from Chad Beynon of Macquarie. Chad, please go ahead.
Chad Beynon: Afternoon. Thanks for taking my question. Josh, if I got this right, based on the pass-through revenues for Interactive, it looks like Boyd Interactive, I believe year-over-year may have grown double digits. Also sequentially, it looked like it probably grew double digits as well. Can you just kind of give us an update in terms of how that product is being received by customers and any plans to kind of ramp up marketing or drive at least revenue higher in the next couple of quarters? Thanks.
Josh Hirsberg: So Chad, I presume you’re talking about the start is online casino product when you referenced Boyd Interactive?
Chad Beynon: Yes, please.
Josh Hirsberg: I just want to make sure that I was going to answer the right question. So look, we’re very pleased with the kind of the steady rollout of that product and where it’s at. So we’re less than a year into market with our own product because it launched May of last year. We’re live in Pennsylvania and New Jersey. The Pennsylvania revenue numbers, frankly, are about double where they were when we took it over. New Jersey not – hasn’t grown quite as robustly as Pennsylvania, but they’re both still ahead of where they were when we launched those businesses. There’s also to start a social product that we’re running out of Boyd Interactive. So look, overall, it is a small business, as we continue to say, it is a growing business.
And remember, we have described this as we’re taking a regional approach, not a national approach, so we want to launch in the states where we do business and a few surrounding states that are important to us, but the business does continue to grow and is ahead of our expectations for where we thought it would be.
Chad Beynon: Great. Thank you. And then you always get the question sometimes even a few times on these calls about M&A. Anything changed really in the last 2 months as you’ve seen more properties or portfolios come across your desk now that some of the [indiscernible] high revenues have worn off, and I think we have a better path towards interest rate declines. Any update there? Thanks.
Josh Hirsberg: Yes. Really not. I would say that we continue to evaluate opportunities. I would say that we’re going to continue to be disciplined in how we evaluate those opportunities. There are a lot of things that are for sale that don’t meet the criteria that we kind of put forth for ourselves and making a decision. So we’re going to continue to be disciplined in how we think about acquisitions, continue to be disciplined in terms of our capital allocation strategy, continue to stay committed in reinvesting in our business and our return of capital to shareholders and then to the extent something were to come along that kind of were strategic for us, generated the free cash flow that we wanted to and could create value for our shareholders, then that’s when we’ll kind of be aggressive around it. Otherwise, we’ll continue to be a spectator to that support.
Chad Beynon: Thank you very much. Appreciate it.
David Strow: Our next question comes from David Katz of Jefferies. David, please go ahead.
David Katz: Afternoon, everyone. Thanks for taking my question. I wanted to go back to Downtown just one more time, if that’s okay. Some of the dynamics, Keith, that you described in the prepared remarks about flight costs, et cetera. Can you just give us a sense of whether those are continuing into the second quarter? Or what your expectation is as to how long that particular market is going to be impacted?
Keith Smith: During the last kind of 30 days, we’ve seen a decline in airfares coming out of Hawaii and conversely or directly correlated to that, we’ve seen a pickup in our Hawaiian business. And so it looks like it is starting to – the rates are starting to decline from their highs earlier in the year. Look, rates into Las Vegas across the board were extremely elevated in late January and February because of the Super Bowl. And so we just know by looking at our database, many of our Hawaiian customers stayed away because they simply weren’t going to pay the higher airfares and now they’re starting to make their trips. And so there is a direct correlation there. Best as I can tell, I don’t control air fares, but looks like the airfares inbound from Hawaii seem to be normalizing or continuing to become less than they were earlier in the year. So yes, we expect that, that will continue and that we’ll continue to see a rebound in our Hawaiian business.
David Katz: Got it. And if I can just sort of – I know we’ve sort of discussed this pretty thoroughly, but just come out at one slightly different way. I think we were sort of hearing commentary about Las Vegas Locals since the new property opened late last year, and it seemed to be a relatively benign impact or at least that’s what the commentary was. Did we sort of misinterpret what we were hearing, did it turn out to be just a little worse? Did it accelerate at some point, how would you sort of look back and characterize?
Josh Hirsberg: I think, first of all, we can only we were able to talk about what was going on through the first – at our fourth quarter call. So we were consistent with that. I think the second thing is it did accelerate as we moved through the quarter, not so much from the new competitor getting more aggressive from promotional perspective but from others in the marketplace as Keith describe getting more promotional – some advocating they have the most generous loyalty program in the Las Vegas locals market. So we’re contending with those type of pressures on our properties without being aggressive and responding promotionally because we don’t think that is a profitable way to run our business. So I think you had a soft market, you had a new competitor come in.
Everything was kind of stable and getting so slowly absorbed and then you had some competitors, again, not us and not our major competitor in the market get – start to get significantly more aggressive and that started to influence our performance.
David Katz: Okay. Helpful. Appreciate it. Thank you.
David Strow: Our next question comes from Brandt Montour of Barclays. Brandt, please go ahead.
Brandt Montour: Hi, everybody. Good evening. Thanks for taking my question. So Josh, you mentioned you reiterated the $100 million of growth projects to think about that as recurring. And the projects you’re working on right now in June and I know this isn’t going to be the big unveil, right, on the next one you’re thinking about. But maybe just a scope or type or do you think maybe you want to tease out there in terms of what we could hear about in a couple of months here?
Keith Smith: Brandt, this is Keith. I think we’re – you’re right, there is no big unveil today. We’ll leave that probably for our next call. We have several projects. We have a pipeline of projects that we’re getting ready to embark on, but not prepared to describe any of them. Many of them are still in the planning and design phases, still finalizing budgets and time frames for them. But there’s a pipeline of them, we’ll be prepared to talk about them in the very near future, but nothing today. No teasing out, no potential this or potential that…
