Downtown Region Still headed downward
February 12th, 2011 at 10:47:21 PM
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Downtown just keeps on dropping month after month for over three years now. The only saving grace (similar to the strip) is increasing revenue in alcohol sales. otherwise the numbers keep getting worse.
Here are the latest numbers for FY2010 from the just released ABSTRACT. Values are shown in millions of dollars over fiscal year (ends last day of June).
"Cost of Sale" is raw price of food and drink and retail goods. "Departmental expenses" are casino, restaurants, and entertainment. "General and Administrative (G&A)" is front office expenses and includes interest, rent, equipment rental, and utilities". Like most of Vegas G&A expenses are the hardest to control in modern business environment.
Business revenue is dropping so fast downtown, that these aging businesses cannot cut expenses fast enough.
Here are the latest numbers for FY2010 from the just released ABSTRACT. Values are shown in millions of dollars over fiscal year (ends last day of June).
| $millions | 1990 | 2008 | 2009 | 2010 | |
|---|---|---|---|---|---|
| Gaming | $642 | $590 | $548 | $508 | |
| Rooms | $107 | $194 | $152 | $136 | |
| Food | $102 | $156 | $147 | $138 | |
| Beverage | $48 | $60 | $65 | $65 | |
| Other | $50 | $60 | $60 | $59 | |
| Revenue Total | $949 | $1060 | $972 | $906 | |
| Cost of sale | $85 | $81 | $78 | $72 | |
| Departments | $487 | $554 | $525 | $504 | |
| General & Admin | $354 | $393 | $423 | $403 | |
| Expenses Total | $926 | $1028 | $1026 | $979 | |
| Net income (loss) | $24 | $32 | $(54) | $(74) | |
"Cost of Sale" is raw price of food and drink and retail goods. "Departmental expenses" are casino, restaurants, and entertainment. "General and Administrative (G&A)" is front office expenses and includes interest, rent, equipment rental, and utilities". Like most of Vegas G&A expenses are the hardest to control in modern business environment.
Business revenue is dropping so fast downtown, that these aging businesses cannot cut expenses fast enough.
March 11th, 2011 at 10:02:51 AM
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There was some good news in the paper for January for downtown Las Vegas, a +8% over the previous January. Since there was also a positive month last October it is being promoted as a turnaround (or at least a sign that hit rock bottom).
Closer look at the data reveals that optimism is somewhat unwarranted.
January 2011 Coin-in to the slot machines was actually slightly lower in Jan'11 vs. Jan'10. It's just that casino win percent was 1% higher. For instance, someone hit the Megajackpot last year, and no one hit this January. Table game revenue dropped by over 6%.
October 2010 Although Oct '10 was better than Oct '09 it should be pointed out that October was far and away the worst drop in gaming revenue for all 12 months. The positive return simply brings October closer to the overall percentage drop.
I don't think that the hard bottom has been hit.
