Leaving Las Vegas

http://www.lasvegassun.com/news/2010/sep/02/moving-vegas-not-anymore/


Is it as bad as all this? Personally I can't believe the guy who said he couldn't find a steady job in 10 years. But is Las Vegas now a city like Gary, IN? A one-industry town that is in terminal decline, looking to diversify its economy with not much luck, and destined to become "empty" with an overstock of housing that will never be filled--or is this all a blip and Las Vegas will find other industrys because it attracts risk-takers who will build a new economy?

Thoughts?

Quote: AZDuffman

http://www.lasvegassun.com/news/2010/sep/02/moving-vegas-not-anymore/


Is it as bad as all this? Personally I can't believe the guy who said he couldn't find a steady job in 10 years. But is Las Vegas now a city like Gary, IN? A one-industry town that is in terminal decline, looking to diversify its economy with not much luck, and destined to become "empty" with an overstock of housing that will never be filled--or is this all a blip and Las Vegas will find other industrys because it attracts risk-takers who will build a new economy?

Thoughts?

What killed Vegas (and Vegas IS dead), was that it never actually produced anything that had trade value. It didn't make cars, or wine, or grenade launchers. It made entertainment, the demand for which is sharply elastic. The effective price of that good stayed too high (incomes, particularly discretionary incomes, dropped while the table minimums stayed where they were and the gambling was systematically made worse), so demand dropped sharply.

It's sort of like owning Flo's Diner vs. Jumping Jack's Strip Club. People will always want to eat, but they will rather quickly stop stuffing $10 bills into g-strings when times get tough.

Vegas can be reborn if the casino operators adapt to the new reality, and realize that someone betting $5/hand is betting $300/hour, or several thousand a weekend--to that player, it's serious money. That gambler may also not care about the exploding tigers or the fountains of beer--he may just want a bed and a shower. And he may not want the $39 buffet when the $12 one would do. The good news about the elasticity of demand for entertainment is that demand rises sharply if prices are cut. Sooooo....don't just slash hotel room prices, guys, make the gambling cheaper, too (and by that I mean, loosen up your %^$%# games!).

I never understood it Downtown when the 4 Queens had $2 min roulette on its 2 tables and they were packed with players 20 hours a day, and right next door at the Nugget, they had $10 min tables all day (raised at night) and it was a morgue in there. Hour after hour in the daytime with no players at all. On every spin at the Queens there was $100+ on the table. It doesn't take a math genius to figure that makes more profit than zero on the table for every spin.

Well, hot dang! It seems we have a thread with mkl654321 and EvenBob in agreement. :-o

Quote: Doc

Well, hot dang! It seems we have a thread with mkl654321 and EvenBob in agreement. :-o

Shit. There must be something wrong with my stated position, then.

Well, I guess I'd prefer Jumpin' Jacks Strip Club to Flo's Diner... both as a customer and as an owner.
However, when it comes to casinos, I think those themed mega-resorts with Extreme Bottle Service have become a totally separate market. Someone will always have 300 dollars to spring for bottle service but the real money does seem to be in the Locals casinos. Its just that when total numbers of visitors goes down, its noticed at both Flo's Diner and Jumpin' Jacks. Each place has to absorb the decline. In really tough times, the Locals Casinos have their income decline too much whereas the mega-themed resorts can skim the cream of the gawking tourists who do appear. People may TALK about getting good deals at local casinos and saving pennies, but alot of visitors come to Vegas for the glamor of The Strip, not the outlying plain vanilla joints. The Strip can tighten their belts for awhile; the plain vanilla joints are already pared to the bone and can't withstand any major declines.

On-edit: The Strip's mega resorts get first crack at the money, the experienced repeat visitors discover downtown and the Boulder Strip. In tough times, it may be hard for some places to ride out the slack years. If you look at Craigslist for employment just about all you see are ads requiring "European Swimwear" or the like. Even an oriental Tappas restaurant puts "schoolgirl clothing" in its ads. Pour drinks in a private Karaoke Room and the "short shorts" have to rather akin to a wide belt. Not much of an industry in that town... except Gambling and the image of Sin City.

Quote: FleaStiff

People may TALK about getting good deals at local casinos and saving pennies, but alot of visitors come to Vegas for the glamor of The Strip, not the outlying plain vanilla joints. The Strip can tighten their belts for awhile; the plain vanilla joints are already pared to the bone and can't withstand any major declines.

I rather think that El Cortez (the oldest casino in Vegas) is doing just fine.

By percentage, Excalibur and NY/NY are the two most profitable casinos for MGM Resorts. By dollar it is MGM Grand, Bellagio, and Mirage.

City Center, and Mandalay Bay are disasters in this recession. Circus Circus barely breaks even. Luxor and Monte Carlo are in the middle.

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BTW: Vegas is not dead. Atlantic city is not dead, Reno is not dead, Laughlin is not dead.
It's just a question of growth. Laughlin has not built a new casino in over a decade, Reno has not built a new one in 20 years. AC has only built one casino in 20 years (Borgata). The question, in my mind, has Vegas joined these other gaming destinations? Will growth only come through blackberry betting

The number of room nights rented is only 16% higher than the number of visitors. It seems to me that a lot of people are only staying in Vegas for 2 nights.

Since the transportation system (air, car, bus, lack of rail) seems stalled possibly a campaign to try and persuade more people to stay a 3rd night is the key to Vegas's redemption.

Quote: pacomartin

The number of room nights rented is only 16% higher than the number of visitors. It seems to me that a lot of people are only staying in Vegas for 2 nights.

Since the transportation system (air, car, bus, lack of rail) seems stalled possibly a campaign to try and persuade more people to stay a 3rd night is the key to Vegas's redemption.

I agree with that, and the smart strip hotel might do well enough to near give away a third night if that third night was a M-T-W. In baseball there is an adage that if you could get everyone who comes to one game to come to two you would tripple your attendance. Strip Casinos don't have the captive market as a baseball team still selling concessions to a otherwise empty seat. But they should get some positive return form it.

I did some research on this number. It was about 11% om 2002 and has gone up to 16% in 2010.

But it still seems like people could be persuaded to do more three night stays. Some of the European , Canadian, and Mexican visitors should be persuaded to stay 4 or 5 nights.

On the face of it, it seems like that would be much easier than trying to gear up the transportation system to bringing 50 million visitors a year (all for very short stays).

I would think that the 2 night stays are the weekenders from close destinations such as LA. I've never gone to Veas for less than 3 nights, and even that's too short.

Certainly Vegas has never faced more competition than it does today. That said, Vegas is not even close to being dead. Certainly, the mega projects have stopped, and I am not sure what is going to happen to CityCenter. I think that it has survived its worst assault in a long time and everything is still standing. The big companies have adapted by flying the whales to Vegas in a win/win situation where the taxes are much lesser than their Asian counterparts. Room rates have been lowered to accomodate and while some casinos are hurting, nothing has shut down. When the conferences come back to town, Vegas will have the hotel rooms to accomodate everything.

Now, housing has taken an absolute beating and I don't think it will ever comeback to the 2007 levels for a variety of reasons.