Is business this bad in Vegas

I know we cancelled our plans to go to Vegas this fall for several reason one being the cost of flights, the cost of hotel rooms (or poor comps) and to be honest we got tired of not winning anything the past 6 trips.

Here is a story that was posted today about Vegas and A/C.

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By Hannah Dreier, Associated Press

Published Friday, Sept. 20, 2013 | 11:37 a.m.


Established gambling towns like Las Vegas and Atlantic City are hurting as more states start welcoming bettors' dollars, Moody's Investors Service warned this week.

The credit rating agency issued a report describing a shift in casino tax revenues away from New Jersey, Indiana and Nevada to new markets in places like Pennsylvania, Illinois and Ohio.

The recession crushed gambling revenues across the county, and casino towns have been slow to bounce back.

"The previously recession-proof Nevada gaming market has seen only a partial recovery since the recession," the report stated.

http://abcnews.go.com/Business/wireStory/moodys-established-gambling-markets-faltering-20321087

 

It's been going down for quite some time.

And yet the casino conditions are getting worse...I guess to compensate.

 

It isn't that bad in Vegas, but it certainly is for AC. Legalization of gaming in Pennsylvania and Maryland really has hurt them. There is not a very good reason for people to go to AC anymore.

The thing that hurts Nevada is that they barely collect any taxes from gaming on a percentage basis, so they heavily depend on volume they used to have when they were a near monopoly. The live entertainment tax (10%) is even higher than the gaming tax (6.75%) for God's sake. To compare, PA has a slot machine tax rate (55%) that is over 8 times higher than Nevada. Even my home state of Missouri (21%) has over triple the tax rate of Nevada for slots.

 

Its not as bad in Vegas.... because other things bring people to the city other than gambling. Those annoying kids and their untz untz music, all these pesky pop stars that have concerts all year long, and to mention the dozen repetitious cirque and comedy shows that people keep coming to Vegas for.

If it was just gambling that people went for, it would have declined much more like AC. Which I feel is a dump anyway... at its best is probably as equivalent as DT Vegas.
HAHAHA.

There's many things that can partially sustain vegas. Nearby to Grand Canyon, Lake Mead recreation area, shows, shopping, tours, clubs, concerts, etc
The stuff many people complain about and wish Vegas was just all gambling is what is probably keeping it alive.

 

What people don't know about is it not the legalization of gambling in more North America locations. Other countries are taking our whales. Vegas has lost a lot of its big gamblers and comps are becoming less. Its really sad that vegas is focused on conventions and nightclubs.

 

Show me the downward trend...

 

Good Point OC Guy.

 

Ben travelling to Vegas regularly for ten years and based on nothing more than just personal observation, the crowds are much larger now than they were four and five years ago, but are still noticeably smaller than the crowds from eight to ten years ago when things were really booming

 

10 years ago you had nearly half the casinos. It's not that Vegas is doing bad, its that there are so many casinos now. Plus alot more off strip casinos.

 

Those are numbers are year over year. I think their point is that LV hasn't returned to the highs of 2004/2005 and probably never will. I do think that competition is part of it. But I also don't know why you wouldn't even attempt to discuss the subject without discussing things like the new personal economics of the customers and the demographics as the younger generation doesn't seem like they will be drawn to gaming the way the older ones have been.

 

In Vegas, the crowds are back to pre-recession levels, but the average spend per person is way down. Many had the luxury of using home equity as an ATM and a lot of the equity ended-up in Las Vegas. Now people are spending real cash and most are far more frugal with it. Many are expecting the same "high-dollar" Vegas experience on a "beer budget"... It remains to be seen how the casinos and the patrons will interact given the changing dynamic.

 

I went the first week of Sept, when everyone is going back to school and there are almost no conventions in town and Vegas was busier than I've seen it for a long time.

 

Yup, these are two key points. You can't just look at a headline number to draw a conclusion. The LVCVA site has a lot of visitor and casino data. If you look at the historical summary and compare the pre-recession peak in 2007 to today you see some important things.

Total visitors finally increased slightly above the 2007 peak, but total room inventory is UP by over 15%.

Gaming revenue and hotel revenue are still down by over 10%.

Number of conventions is still down and number of convention attendees is down by even further.

The last time before the recession when hotel occupany rates were below current levels was 1991.

Things have definitely improved since the recession started but there is still a lot of excess capacity that needs to be absorbed. And as far as I can tell there are plans for more rooms coming up versus coming down.

I think one of the most interesting stats though is that total visitors arriving by airplane is still down by about 15% since 2007. The difference has been made up by car passengers coming which is up by over 10%. To me that's a big indicator of a lack of discretionary spending still hurting Vegas, and it looking more attractive as a short and simple car trip versus a destination vacation.


http://www.lvcva.com/includes/content/images/media/docs/Historical-1970-to-2012.pdf

 

Another revealing thing is if you marry the other data with the data from this survey of air vs. car visitors: http://www.lvcva.com/includes/content/images/media/docs/2012-LV-VPS-Air-vs-Ground.pdf

Visitors by air are significantly more likely to spend more money on things like hotel, gambling, shows, spa, restaurants, and hotel bars with no cover.

The only single thing visitors by car are more likely to do versus air travelers is visit hotel clubs with covers and pool/day clubs.

Plus, visitors by car are also twice as likely to be in their 20s versus visitors by air and 3x as likely to be students.

So its pretty clear the engine feeding the successful club scene is the 20-something visitors driving in from SoCal. But at the same time these visitors spend less on everything else, and they're the segment that is the most responsible for the recent upswing in visitor numbers.

 

to me what is most important about what K-Chicken is saying and what those that brought up casino gambling being legalized in other states and how it reflects back to the OP is

when you have the same amount of dollars being spread around way more properties/rooms/restaurants and even states it greatly impacts the profitability of each property and their freedom and ability to offer comps and discounts and "deals" to those that play at a "noticeable" or a very frequent level of consistent play

if you have 2X the number of aircraft flying into town and they are 55% full instead of 95% full......and they sit on the ground longer because there are more planes to service and it takes a longer interval of time to get the number of passengers to make a trip full enough to be profitable......well we all as customers pay for that excess capacity to some degree

when you have the same number of visitors, but 15% more rooms well we all pay for that excess capacity to some degree

when you have more casino games, dealers, slots and air conditioned floor space well we all pay for that excess capacity

there is only so much "discretionary income" in the USA and only so many people that are willing to use some portion of their discretionary income on gambling well you can "build it" but they just might not show up or they might not show up in significant enough numbers to make your profitable or to make it where you can be the "value" you used to be

casino owners are clearly not the best at understanding very basic economics of supply and demand and profitability

 

I'm pretty much in line with the original poster. Having been to Vegas at least once a year for 30+ years, I haven't been there in 3 years now, and for pretty much the same reasons:

1. I guess it's just me, but I'm not attracted in the least to all the rap stars/hip-hop scene that's dominating Vegas entertainment now. And Britney Boobs at PH now.... oh, yuck.

2. They keep making gambling conditions worse and worse, then turn around and say people aren't gambling as much as they used to. Ahem. I've read forum posts of people spending as much as $30,000 on slots, and not winning ONE SINGLE jackpot. That's certainly been my experience, too, albeit on a smaller scale. It's just not fun any more. Put $100 in a slot, and before you finish your drink, it's vanished, and you're sitting there thinking of the nice steak dinner you could have bought with that money.

3. Vegas has abandoned the business model of the cheap buffet as a loss leader. It used to be for $3.99 you could get a good buffet clearly the equal of today's $39.99 buffets - but they made their money back on the slots people played while they were there. Cheap buffets, $1 a hand single deck 3/2 blackjack... all gone.

4. I know a lot of people disagree with me, but I miss the old coin type slots. Yes, there are some scattered around, but very few, and those aren't REALLY coin slots, they're TITO and pay you coins when you cash out. There was something visceral about a big pile of coins.... MONEY!... in that tray, and running your fingers through it.

And remember those wonderful silver dollars? I knew I was in Vegas when I had half a dozen silver dollars in my pocket. All gone.

Don't say it won't work, either. Steve Wynn built the Mirage for $800,000,000, a staggering amount of money at that time. He borrowed it on a 15 year loan, and paid it off early in cash, in 18 months. And that was with loose coin slots and cheap buffets.

A lot of people think if you miss the "old days" at Vegas, you're talking about the old Rat Pack era. Not true. You just miss the old days when if you went to Vegas, you knew you were going to be taken care of: a good place to stay, plenty of good food and you were going to have a good time, no matter who you were. Not any more.

 

I know what Ruark is saying. Three of my last four planned trips to Las Vegas, I cancelled and went elsewhere. As you can see by my visit count, I have frequented Las Vegas many times over the years. I used to leave a lot of Illinois money there each time I went. I had fun then and enjoyed myself much more. Gaming and it's protocol has changed to where the value is gone. I now buy with those gaming dollars, the same things I enjoyed in Las Vegas (without gambling) at other destinations. Surprisingly I am not spending near as much out of pocket when I look at the total cost for my time there. I don't go budget and I don't eat fast food either; not on vacation. I also appreciate the variety I find in my destination choices even more so. I wonder if the bean counter's took this into consideration when they made all their decisions back when?

 

On a more serious note, 2014 will be a big turn around year for convention business. Look out, at the end of June, 25,000 LIBRARIANS will be in town for their annual conference! (yes, that is written in sarcastic font)

 

I dont get that one All the vegas headliners of recent years Celine, rod stewart, shania twain, elton john , garth brooks, faith hill tim mcgraw all that cirque du soleil crap have nothing to do with rap stars /hip hop

There is almost no hip hop rap entertainment offer on the strip