Sunday, December 14, 2008

Recent Las Vegas Gaming Revenue and Visitor Counts Indicative of Nationwide Economic Crisis

We're all aware Las Vegas' economic condition and outlook is in a downturn. The following numbers* describe the depth of
several critical measurements which are both interrelated and interdependent .

- October Strip gaming revenue declined over 25% compared to last year at this time (actual casino win was 475 million vs 640
million last year )
- Las Vegas gaming wins were also down for North Las Vegas (- 34.3%), Boulder Strip (-28.2%), and downtown (-19.6%)
- October visitor counts are down 10% vs October 2007
- October was the tenth successive monthly decline in gaming wins for the casinos
- Casino stock shares have declined in value by 80 - 90% compared to last year's indexes
- Gaming properties debt is now 7 - 10 times greater than their earnings
- By the end of September, over 3200 employees had been laid off at Strip locations
(will certainly escalate as last quarter numbers are reported); many more employees have seen their hours cut
- Many 401K match savings plans have been suspended by gaming companies to reduce costs
- Las Vegas visitors through McCarran Airport was down 13.2% by September (vs last year); many of the airlines such as
Southwest have reduced the number of flights here in response to lower demand
- Restaurant and bar sales in Clark County ,which are traditionally thought of as good indicators of tourism levels, are down
nearly 20 % ( from 623.4 million to 580.5 million)
- Many resort expansion or development projects have been stalled, put on indefinite hold, or cancelled outright due to the
credit crisis
- Hotel occupancy and room rates are down by approximately 10-25% and expected to decline further
- MGM MIrage, one of the largest gaming companies, has seen net income decline 67% (from 183.9 to 61.3 million)
- Some casinos have significantly reduced entertainment schedules and either closed or reduced operating hours at
restaurants
- The local unemployment rate hiked to 7.6% in October ( significantly higher than the national average) ; unemployment
claim filings have increased by 44% as compared to October, 2007
- Business confidence indexes all point toward a deepening of the above numbers; ie, it will get worse

What does all the above mean for potential visitors? There will be attractive room rate/ travel deal offers to lure us to visit Las Vegas resorts; yet consumer willingness to spend discretionary money for Vegas visits will likely continue to decrease. Patrons who have visited lately are obviously spending less money while there. For those in a position to go, perhaps unprecedented offers will be in the offing. Resort survival will be an interesting scenario to monitor during the next year. The severity of the economic condition seems to scream belt-tightening for us all.


Cheers..
Chuck60

*Sources ; compiled from Nevada Gaming Control Board, Las Vegas Sun news articles, UNLV Center for Business & Economic
Research, In Business Las Vegas, Las Vegas Business Press, New York Times Business Section articles

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Mostly Useless (and approximate) Las Vegas Facts

1. Number of Las Vegas citizens   500,000
2. Number of Clark County residents   1,500,000
3. Year first casino licensed   1931
4. Number of slot machines in Vegas   200,000
5. Number of annual Vegas visitors   40,000,000 (and dropping)
6. Number of licensed gambling entities   1700
7. Hours per day average visitor gambles   4
8. Annual state gaming revenue   9 billion (and dropping)
9. Average gambling budget per trip   560  (and dropping)
10. Mean price per acre in valley   161,000.00
11. Price per acre on the Strip   11,000,000.00
12. Number of  hotel rooms   137,000 +
13. Number of pillowcases washed at MGM daily   15,000
14. Number of doors at MGM  18,000 
15. Annual no. toilet paper rolls used at Bally's   1 million
16. Lucky The Clown marquee sign at Circus Circus has
      1232 fluorescent bulbs, 14,498 incandescent bulbs, and
      3/4 mile of neon tubing light  (no wonder they're replacing
      it!)
17. In good times, Excalibur goes through over 44,000 
      Cornish game hens, 15 thousand pounds of hamburger
      meat, and 4200 pounds of prime rib monthly
18. Caesar's Palace has used 2 million plus maraschino 
      cherries, 11 thousand ounces of caviar, 2 million ounces
      of tomato juice, and close to 600 thousand ounces of
      vodka yearly (bloody mary winner?)
19. Mandalay Bay has 5,300 palm trees and their wave pool
      has a capacity of 1,640,270 gallons of water
20. Average nightly room rate  119.00 (and dropping)
21. Average number of Vegas weddings per day   300+
22. Number of golf courses  37
23. Miles of neon tubing on the Strip and Downtown  15,000
24. State's nationwide rank in gold production  1st
25. Cost of Nevada marriage license   35.00
26. Average cost of filing for divorce  450.00
27. Average length of stay for visitors    3.7 days
28. Number of hosted conventions annually  3750
29. The electric bill to operate the Luxor pyramid beam is
      approximately 55.00 per hour.
30. Las Vegas has 17 of the world's 20 largest hotels   

"WHERE'S MY WALLET , ETHEL!? "

Just a cautionary tip when in Vegas.. there are active
pickpockets all over town. I experienced this first-hand
and came within 10 seconds of losing my cash stash last July
while visiting one of those upper end joints on the strip.

I was gambling significantly at a video poker machine, unabashedly slipping C-notes in them. Somebody had been
observing my wagering behavior. I was happily winning at the time and my cautionary tendencies regarding my bankroll
money went south and out the window.

A lady approached me from behind as I played and was all aglow with my run of good luck. She initiated a conversation about nothing and anything . I was concentrating on proper VP strategy and responding to her comments with a lot of "yeah-yeahs". I was fortunate enough to get ahead on the machine again and I cashed out. I had a satchel (I normally never gamble under those conditions) with me that had assorted trip stuff in it. The satchel presence and the relatively high denomination coin-in amount collectively screamed " please rob me!" I placed my wallet in the satchel along with the machine cash-out tickets and proceeded to reconnect with my family and head to our room.

I had developed a sense of cautionary unease as I mulled over the contact with the effusively talkative woman at the VP machine. My senses told me that something about that encounter was skewed, although at the time I didn't know what it was and I wasn't bleeding profusely..yet. My group then proceeded to meander through a very crowded slot machine aisle and some other 6th, 7th, or 8th sense that vaguely detected an impersonal yet succinct encroachment into my personal space kicked in. Instinctively, I immediately dug into the satchel to locate my wallet and it was gone. I then immediately turned around and backtracked about ten feet (a matter of maybe 3 seconds, tops) as my endogenous adrenaline kicked in. I'm not sure that my hair wasn't on fire briefly.

I then spotted my wallet (and life) in a woman's hand who was playing a slot machine. I walked straight at her and demanded it post-haste in a tone that screamed seriousness. I immediately grabbed the wallet and called for security. The woman claimed she picked it up off the floor and so did the man (her accomplice) behind her, both vowing that they were planning to remit it to the security desk. My svelte ass they were.

This team of thieves including the woman who was all goony-googoo at the VP machine were pros. I have to claim part of the blame for the openly careless manner I had displayed with my money. They were held by security and the eye-in-the-sky tapes were to be reviewed.

The good thing is I didn't lose a cent because my peripheral senses kicked in immediately and they didn't have time to bury the evidence ( perhaps they weren't the best of pros?). Take heed folks..these people are everywhere in Vegas. Know where your cash is at all times; take precautions to protect it, don't flaunt it around carelessly as I did, and if you sense something is awry while gambling trust your instincts.

Distractions from one member of a team of thieves is a common MO. Store your gambling session monies in a front pants pocket or in one of those god-awful front-loaded fanny packs (pride be damned). The lesson I learned here after several years of Vegas gambling experiences turned out to be one of the most valuable for me personally.


Cheers..
Chuck60