What is the purest metric?

We all know that industry representatives keep yammering about Las Vegas Visitors, but we don't have a way of determining if those arriving airplanes have gamblers, hookers or touristy gawkers on them.

Casinos speak of unsold rooms but rooms are often comped, negotiated or wholesaled out to block buyers such as Hotwire despite it being a managerial absurdity to deal with such firms.

Casinos speak of room rates, but such rates are often merely nominal and are later inflated by undisclosed or poorly disclosed and much hated Resort Fees.

Casinos speak of Buffet Rates, but meals are solely one aspect of miscellaneous expenses a potential visitor might have. Others might be movies, teen arcades, shows, fine restaurants, golf fees, etc. Many such miscellaneous rates vary widely and often are subject to discounts available to some hotel concierge desks but not others. Industry advertisements about rate changes for buffets or show tickets might be meaninglessly miniscule for some visitors.

Taxi rates and practices vary; strip club limousines rates and practices vary.

House Edge apparently does not vary but Hold and Drop do. It seems darned few players seem to start out knowing how to add to 21 and even fewer continue to do it properly after a few drinks and a few batted eyelashes from nearby females.

Customer satisfaction surveys are fine and dandy but they are being filled out by people convinced slot machines pay off better on certain days of the week than others.

Bodies through the casino door? Its important but even semi-deserted casinos can profit if one of those bodies is that of a whale.

New Member Player Club signups? Hardly. Some casinos are still offering senseless trinkets whereas some are offering substantial prizes.

Just what metric really shows Las Vegas reliably?

What's the purest metric?

It really depends upon who you ask.

For example, the Visitor's Bureau might count the people getting off a plane. ALL the people: Gamblers, tourists, hookers and even the flight crew! Then again, they might not.

Comped rooms are often handled internally by the casino. I.E. The casino 'pays' the hotel for the rooms. Of course, depending on who's asking, the number night be the $10 real cost of sending in housekeeping to clean it. Or it might be the inflated price listed on the back of the door that nobody ever pays.

Personally, when talking about a casino, I think the difference between the cash in and cash out is the only important thing.



My point is, depending on who is asking, and what the data is going to be used for, you're going to get different answers.

Casino cash on hand at start of day compared with casino cash on hand at end of day.

Quote: DJTeddyBear

For example, the Visitor's Bureau might count the people getting off a plane. ALL the people: Gamblers, tourists, hookers and even the flight crew! Then again, they might not.

On a previous trip I overheard some of the Mexicana fligth crew talking about how they did at the casino the night before.

Of course, they probably stay at Terribles.

Quote: konceptum

Casino cash on hand at start of day compared with casino cash on hand at end of day.

Yes, indeed. You can't beat that one! ... Or can you?

The Gaming Commission never releases individual casino figures, only geographic based figures that blur individual results. So the casino that is still giving away "a whole freakin' dollar" in free slot play is an equal indicator of the health of Las Vegas as the casino that earns unstinting praise for its freebies that are realistic for this economy.

Anyone can go to the airport and count heads for a day, but casinos frown on anyone trying to track the figures from their counting rooms.

I don't think unsold hotel rooms mean much and if the room is rented to a non-gambler I don't think it means much at all to the casino. I have a feeling that a man who loses seventy-five dollars to a slot machine probably tells his coworkers a different figure and certainly tells his wife a different figure.

Quote: FleaStiff

I have a feeling that a man who loses seventy-five dollars to a slot machine probably tells his coworkers a different figure and certainly tells his wife a different figure.

You've got that completely wrong.

He tells his coworkers "I lost a little."

He tells his wife "I didn't do too bad."

Quote: FleaStiff

Just what metric really shows Las Vegas reliably?

Tax revenues.

Quote: Chuck

Tax revenues.

There is such a time lag to tax revenue... and its use is often already allocated to various boondoggles and teachers unions.

Still, I wonder if all these comments about 'Vegas is hurting' can be more precisely measured? Some casinos have laid off employees, others cut back on a variety of things, yet new beach clubs have opened up too. So I wonder if things are really all that bad?

Most of all, I wonder what could really be changed to have a major impact: cheaper rooms? Free rooms? Massive Comps? Moderate Comps? Targeted Marketing (such as golf specials, sports specials, etc.)? I have an idea that Heads in Beds really is deceptive but have no idea what would be more indicative of profitability.

Airplane visitors are down to 2004-2005 levels.
Occupancy rates are down to 1991 levels.
Comped rooms are considered as being "sold".
Buffets are the low end of food revenue (which was almost $77 per room per day). I believe that fuffets probably break even on the strip but they lose money downtown.
House Edge does vary a little, but not as much as Hold and Drop.
Bodies through the casino door who spend $200 a day are often more important than the widely variable business of hunting whales.

Just what metric really shows Las Vegas reliably?

The best metric is probably the profit loss released once a fiscal year. Unfortunately it is only released in February or March for the fiscal year ending 30 June the previous year so it is often very dated.

The news article for fiscal year 2008 showed a total net income of $721.2 million (July 1 2007 to June 30 2008).

The news article for fiscal year 2009 showed a total net loss of $6.8 billion (July 1 2008 to June 30 2009). Nothing in Vegas history had ever come close to that kind of loss.

Very few times in history (the abstracts are posted back dozens of years) has a major regions like the strip or Clark county or the state shown a loss instead of income. If it is a loss it is usually a few percentage points.

Quote: FleaStiff

There is such a time lag to tax revenue... and its use is often already allocated to various boondoggles and teachers unions.

As far as using it as a measure of commercial activity, it doesn't matter what tax revenues are used for. That's a different subject. I believe Nevada publishes taxation revenue statistics on a monthly basis with prior year comps, but it is usually 3 months behind, but that's not that far off than the publicly-owned hotel/casino operators report.

The news article for FY 2009 also states

Quote: lvrj

Bad debt expenses increased 125.6 percent while casino companies took more than $5 billion. in non-cash write downs or impairment charges on their operations. Streshley said those write downs drove up general and administrative expenses by 241 percent.

.

I am not a purest and I don't think P&L tells the whole story either because while corporations have a fiduciary duty to report accurately, there is some grey. Impairment and write-downs is one of those actuarial things you can do to write down assets to their fair market value from their net book value and is based on market conditions more than anything.

For me, the metric IS gaming revenue. When I look at how gaming is doing, I actually look at the total amount bet (which is the gaming revenue / win %). Even the HA is subject to variance so you have to look at both figures to get an idea of what the players are doing. Costs are controllable by the casino. It a group of casinos lose 6 billion dollars, is it from bad management or from a loss in revenue. For me, it is up to the operator to adjust their operations accordingly based on the loss of gaming revenue.

But even in a corporate world where statistics are relatively transparent, organizations look at a number of metrics to gauge their health. It's no different with Vegas.

One metric that people don't talk about very much is the average number of employees working for the casinos. That number peaked in FY2006 and has not dropped to 1995-1996 levels. Casinos eliminate bars, shifts, night hours, they use less labor intensive equipment.


Employees - Fiscal Year
170,190 - FY1995
186,103 - FY1996
204,874 - FY2000

191,620 - FY2004
202,209 - FY2005
215,041 - FY2006
201,953 - FY2007
202,216 - FY2008
177,397 - FY2009

Employees who work in the "casino department" of the resort have shown the greatest drop. In fiscal year 1989 (which ended 5 months before the Mirage there were more empoloyees in casino departments than in fiscal year 2009.

47,789 in FY1989
46,322 in FY2009

The actual casino has had a lot of jobs replaced by automation in the last 20 years.

Yeah, change girls and keno runners disappeared.

No more guys lying on their belly using binoculars up above the casino, now its all pan and tilt cameras in color.

Larger pits mean fewer pit bosses and overworked floormen.

No more chip runners or chip muckers.

Bartenders have automated jiggers and its all pre-measured mixes.

Nightclubs and security are outsourced.

Clearly though, some casinos do very well, others linger. Some plain vanilla boxes make good money, some fancy casinos fail.

The M had quality and good gaming mix, great waitresses, great food, great booze, good marketing... and its debt got bought up together with an as yet unexercised right of foreclosure.