I seriously doubt that someone staying at the Wynn or Encore is going to buy the city-wide buffet from Harrah's. The dinner buffet at Wynn is $34-38, which as much or more than the all day city wide buffet at Harrah's.
But I doubt that Harrah's buffet will attract a lot of people out of the 4-5 diamond resorts (TI, MIRAGE, BELLAGGIO or VENETIAN/PALAZZO, and WYNN/ENCORE). The Excalibur and Luxor have their own all you day buffets.
The rich love a great deal as much as the middle class.
It is pretty difficult to have a negative EBITDA. Even Circus Circus has a positive EBITDA. Wynn also makes the very clear point that they don't want EBITDA to be considered synonymous with cash flow.
But you are correct, the $60M EBITDA is almost as good as the Bellagio.
I'm always astonished how much this can be true, but one thing for sure is that sheltering a person's assets from taxes often means less or no income from those assets. Thus even wealthy people have some sort of budget if they don't want to be cashing out those assets.
There is a difference between the "line" at which a Green-Eye-Shade type would say close the place, the owner of a nearby casino would say close the place and the line at which an employee just hanging onto his job as it is would say close the place.Quote: ruascott
For CC or a few others, its really borderline whether they should remain open.
I would think you mostly shelter assets from taxes if those assets were ill-gotten.
There is a difference between the "line" at which a Green-Eye-Shade type would say close the place, the owner of a nearby casino would say close the place and the line at which an employee just hanging onto his job as it is would say close the place.
People have been mumbling about the decline of Circus Circus for quite a while but actual closure will generate headlines and headlines have industry-wide costs associated with them.
Do I have some fond memories of Circus Circus? Sure! Did I enjoy my trips there long long ago? Sure. (Mostly). Would I ever go back there. Not a chance! Do I want it to close? No.
You make an interesting comment about the desirability of closing some places.
The table really illustrates the massive oversupply of rooms in the Vegas region. The planes are not coming back anytime soon. The train is still five years away, at best.
I think the numbers that we see for this year will determine how massive the oversupply is. We're at levels in entire economy, whether thats LV or any where else, that this country hasn't seen since the late 70s-early 80s. From your chart, I see that occupency rates were down to 84% in 2001, following the dot.com colapse (and then 9/11.) Of course, even then unemployement was nowhere near the levels of today. I don't live in LV, so you may well know better than I, but the antecdotal reports I've seen indicate that numbers have been improving since last year.
Now, I'll say this as a farily low-roller consumer. I think LV in the past few years really lost its "value vacation" identity for a lot of middle class folks. Instead it was all about bottle service at the infinite number of strip night-clubs, rediculously high-priced restaurants, and continued gouging of customers with things like "resort fees".
Sure, you can stay at a low-priced strip hotel like the Riv or CC, but if you go out wandering elsewhere, you need to dip into your pocket. $8+ cocktails are the norm at many of the strip resorts (if you aren't playing of course), and those prices are equitable with any other upper-scale vacaction destination in the country. Problem is, what made LV so popular for so many decades was its image of a great value destination. I can get price gouged in a lot prettier/more interesting places in this country - Tahoe, Colorado Rockies, Miami, NYC. When I come to Vegas, I want good value on EVERYTHING (food, gaming odds, drinks, etc...) and a clean place to lay my head. I'll give props to downtown, as Freemont St is sticking to this model.June 5th, 2010 at 7:52:06 PM permalinkQuote: ruascott
I don't live in LV, so you may well know better than I, but the antecdotal reports I've seen indicate that numbers have been improving since last year.
Anecdotally the reports are that things are improving, but if you look at hard number the improvement is fairly fragile. Much of the recovery in gaming has been solely in baccarat. In 2-4 days time the report for April will be released. What is significant about April is that in the last ten days of april, the Macau Encore and the Sands Singapore casinos opened. If the majority of baccarat players are global high rollers, and mostly Asian, then we may hear a massive sucking sound as these two new resorts pull away the big players.
In particular Singapore does not have the huge tax percentage of Macau. The biggest savings grace of Vegas has been the low tax rate which allowed Steve Wynn and Sheldon Adelson to take the time to fly the highest rollers to Vegas where they could gamble at a lower tax rate than Macau. Now they can take them to Singapore at much lower cost. In addition the casino at Singapore blows most of the buildings in Vegas out of the water for WOW factor, making it the most desirable place to go.