Vegas visitation Levels Back

With 6 months of visitation levels reported, it does seem as if Vegas visitation levels are back to within a fraction of a percent of their peaks in 2006 and 2007. Of course room rates are equivalent to 2005 levels.

Table games are also back to 2007 levels on the strip, but with baccarat substituting for other games. Slots are still down. Overall Nevada gaming still seems to be in an unrecoverable downswing with good news only coming from the eastern Nevada bordering Utah.

Needless to say restoring the old visitation levels at much lower hotel room rates does not address the huge supply of expensive hotel rooms build after 1 Jan 2008.

Year	Jan-Jun	Peak	Hotel Room
2011	19,465,171	-0.7%	$105.53
2010	18,528,206	-5.5%	$94.91
2009	18,177,689	-7.3%	$92.93
2008	19,510,788	-0.5%	$119.19
2007	19,606,561	0.0%	$132.09
2006	19,361,485	-1.2%	$119.66
2005	19,278,129	-1.7%	$103.12

Quote: pacomartin

Slots are still down.

My wife will help try to get these numbers back up when we're there Labor Day Weekend.

Visitation levels may be getting back up to pre-recession levels, but I would think that occupancy rates are down. I can't help but think that with the addition of places like CityCenter, Palazzo and others, there are more hotel rooms competing for the same amount of business.

I travel to LV regularly and IMO, there are still lots of people going, they just aren't spending/gambling like they used to. Basically, same number of people, but instead of bringing $1K to gamble with, they might be only bringing $750. I don't think there is much anybody can do about that one.

Arriving airplane passenger numbers.
This includes the increased number of hookers flying in from depressed areas.
This includes darned drunken yuppie nightclubbers.

Maybe it also means people heading to the casino with money in their wallets.

.....

Quote: gofaster87

Ive been to the strip a number of times over the last month an there are plenty of people there. The problem is they are doing nothing but loitering. Who the hell comes to Vegas to walk around the strip looking for dollar beers and playing 5 cents on a penny machine? A waste of time in my opinion.

lol Thats almost exactly what I do. It's so relaxing to stand on the corner leaning up against the side of O'Sheas drinking a free beer and watching the lights and people. I'm sure my ten dollar blackjack and my girlfriends penny slot play isn't boosting the economy at all but its still fun.

Quote: Gabes22

Visitation levels may be getting back up to pre-recession levels, but I would think that occupancy rates are down. I can't help but think that with the addition of places like CityCenter, Palazzo and others, there are more hotel rooms competing for the same amount of business.

At the beginning of 2007 there were 133,262 hotel rooms. Right now there are 148,733 ( additional 15,471 rooms). That is a net number, so some old cheap hotel rooms closed (like Sahara) and replaced with newer hotels.

It does seem like if they had stopped everything after April 2005 (when they opened the Wynn), that Vegas would be OK. But they just kept building on and on with Palazzo, Encore, City Center, new hotel tower at Golden Nugget, Hard Rock, etc.

That's what I was getting at. If they are just getting to the amount of travelers going in and out of Vegas that they received in 2007, but have 11.6% more rooms to occupy that same amount of travelers, that means that individual hotels/casinos will have more vacant rooms. Now, I haven't been to Vegas in 3 years, although I will be there in mid-October for my honeymoon. But for Vegas to truly be back to the levels it was at pre-recession, it would have to get pretty close to 22 million visitors.

Quote: Gabes22

That's what I was getting at. If they are just getting to the amount of travelers going in and out of Vegas that they received in 2007, but have 11.6% more rooms to occupy that same amount of travelers, that means that individual hotels/casinos will have more vacant rooms. Now, I haven't been to Vegas in 3 years, although I will be there in mid-October for my honeymoon. But for Vegas to truly be back to the levels it was at pre-recession, it would have to get pretty close to 22 million visitors.

Agreed. To get occupancy levels back that high they need more people.

But keep in mind that Vegas controls occupancy levels by pricing their rooms. If rooms were still priced at an average of $132 per night like they were in 2007, the visitation levels would be very low. If hotels dropped from their present $105 average to $90 they could get all the people they want.

Although it is a simple fact, sometimes we forget that economics is not just demand, but it is demand at a price. There was a bit of a race as to which tourist spot in America could reach 50 million visitors in a year first. The three contenders were Manhattan, Las Vegas, and Orlando. Well Orlando won because it is the least expensive of the three.

Vegas has over 50 million hotel room nights in a year, and double occupancy is pretty common. If it was cheap enough, they could have 50 million guests. It just isn't worth it .

In the last 4 fiscal years, pit games have almost returned to their previous level on the strip, but Baccarat has made up for the huge loss in other games. Slots may be unrecoverable as so much of the nation can play slot machines at a local establishment and may not want to play them when they are in Vegas.

Strip Vegas	2007	2011	Change	Change
Baccarat	$895,121	$1,269,724	42%	$374,603
Pit Games other Baccarat	$2,188,219	$1,726,605	-21%	-$461,614
Slots	$3,437,190	$2,841,226	-17%	-$595,964
Sports and Race	$134,208	$95,629	-29%	-$38,579
Poker	$99,145	$80,932	-18%	-$18,213
Total	$6,753,883	$6,014,116	-11%	-$739,767

The opening of new hotel rooms is not completely dead in Las Vegas. There are a handful of projects.

2011 (rooms)
995 The Cosmopolitan of Las Vegas (phase 2) 3708 Las Vegas Blvd S September 1, 2011
662 Caesars Palace (opening of new Octavius tower rooms) 3570 Las Vegas Blvd S December 2011
300 (Time Share rooms) The Grandview at Las Vegas tower 6 9940 Las Vegas Blvd S December 2011

2012: (rooms)
96 SpringHill Suites Marriott (North) 2910 E. Craig July 2012
134 Residence Inn Marriott (Southwest) Sunset & 215 July 2012
100 Residence Inn Marriott (Henderson) St Rose Pkwy & Maryland Pkwy October 2012
160 SpringHill Suites Marriott (South) Mesa Verde & Robindale November 2012
150 Embassy Suites SE corner of Sunset Rd. & Grier Dr. Mid 2012

Kerkorian sells 20 million shares of MGM Resorts might be a harbringer of change to come. It is possible that now that Vegas is settling, property does not have to be sold at extreme fire sale prices. There may be some new players that come into the market.

Quote: pacomartin

It does seem like if they had stopped everything after April 2005... that Vegas would be OK.

Well, that's not just Vegas, that's everywhere in the country that had a housing bubble.