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Think We're In The Tank? Look Around!

Discussion in 'Misc. Vegas Chat' started by smartone, Apr 7, 2014.

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  1. smartone

    smartone VIP Whale

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  2. ajonate

    ajonate Low-Roller

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    I'm not skeptical, I just acknowledge that the recession will take another 4 years or so to resolve. It's not a Vegas thing. In fact it's a global thing.

    The problem is that residential real estate has still not recovered. That means that banks are still holding a lot of toxic assets. The Fed has loaned banks money to make them appear solvent, but banks aren't going to loan money like they used to until those assets recover. I'm guessing another 4 or 5 years for that to happen.

    Of course the tourism industry will try to attract what business they can, but I think the capital investments we've seen recently aren't the way to do it. I believe casino operators would be better served to attract visitors to existing properties than to make capital investments. A casino/hotel can make itself stand out from other properties by being good to customers for a lot less. Remove the resort fee, give better room rates, and be generous with 2for1 food deals. Customers will love them for it.

    You can assume that the large properties have solid financial backing, but it might not be a true as it appears. Investors have only so much patience. For casino operators who are losing $200 million/year right now, they might have 5 more years of that ahead. Investors might tolerate a $200 million loss, but will they tolerate a $1 billion loss over 5 years? Some have already suffered a $1 billion loss over the past 5 years. Believe me, their patience has a limit.

    Over the next 4 years more bad things will happen. Properties will fail, unemployment will linger, and North Las Vegas city might be seized by the state. But Las Vegas will eventually recover.
     
  3. leo21

    leo21 VIP Whale

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    It irks me that they brought up Smith Center because it was funded in part by car rental fees. And at least point to some positive trends in casino revenue that would actually suggest that the casino companies will be able to pay off all the stuff they are building. All this does is show is that when the going got tuff, Vegas doubled down on tourism when they need to diversify their industry base.
     
  4. ajonate

    ajonate Low-Roller

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    It's one blunder after another, both in the casino industry and local government. Around 2005-2007 LasVegas when into what I call the "stupid phase"; buying up properties and demolishing them without funding to replace them. Not to be outdone, Mayor Goodman announced that the recession could be avoided altogether if they and N. Las Vegas built new city halls. Together, the two cities spent over $300 million on new city halls. Guess what? The recession still happened, and now they're crying about all the debt. Sheesh!

    I swear, it's like the people in charge around here, both public and private, don't have an ounce of sense.
     
  5. Big Tip

    Big Tip VIP Whale

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    Why should your powers that be differ from the the rest of the country's powers that be?
     
  6. Kickin

    Kickin Flea

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    I like that author's sentiment. No sensationalism one way or the other. Vegas isn't Detroit, saying that is an insult to Vegas and gives way too much unearned praise for Detroit.

    Vegas is where most of the country is, in fact where most of the developed world and now even the emerging markets are - slow to no growth. It just has a bigger hole to climb out of than most other places. These are the types of environments that really separate the wheat from the chaff in my opinion. In boom times anyone dumping money into anything looks smart, in really bad times even smart guys can get crushed. But times like these are when capital flow becomes really efficient.

    I see it in my own business in terms of the better diligence people do before making investments. Rewind to the mid-2000s and you'd throw money into anything, you almost had to if you wanted to stay relevant. From late 07 to 09 the complete opposite, the best balance sheet in the world might not be enough. Now for the most part investors are very selective, though I think there are a few pockets of over-exuberance.
     
  7. pressitagain

    pressitagain Low-Roller

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    The only way to attract customers, is to give them something that they haven't seen. That part makes sense if you can afford it.

    Casinos are everywhere. What separates Vegas is that, it is supposed to be different. A spectacle.

    One more global downturn (within a short period) and Vegas becomes what it once was...a desert.
     
  8. LV_Bound

    LV_Bound VIP Whale

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    Sometimes I wonder if most of that money was from my past couple of trip. Just can seem to win. :eek:
     
  9. Someone

    Someone High-Roller

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    while I am sure some on here believe that I am negative towards casinos or gambling based on some post especially those dealing with locals casinos or "new markets" (non-existent in the USA for gambling) adding casinos

    I am not negative gambling I am negative the idea that there is an endless or even ANY untapped money that gambling and "entertainment" in general has not tapped and probably beyond tapped

    I am pro the idea that at one point and time Vegas had something unique and that revolved around gambling and I am not negative towards Vegas trying to add other things, but when it comes at the expense of gambling and when those additional things are NEEDED because casino companies have watered down their product with crappy truck stop casinos littering the USA I am negative towards that

    as to this article in general I am not sure it is all positive when that amount of construction had been done and housing prices are rising, but residents are still underwater on their house and others are having a hard time affording a house.....that actually sounds pretty negative to me because at some point and time what every "writer", "journalist", "politician" and any other general fool fails to realize is.......service sector jobs, entertainment, the building of service sector and entertainment venues and even home construction are not builders of a healthy economy they are the off spring of a healthy economy

    you can't build an economy on people gambling, partying, clubbing, drinking, eating out, going to pro sports games, recreating, hitting the lake and beach or people building a bigger house or condo

    at some point someone has to actually produce something like food, energy, BASIC clothing, pharmaceuticals and on and on

    so when some fool thinks they can drive an economy or an economic rebound around a sports venue, a new government building, an airport refurbishment, or some other project that generates short term employment and LONG TERM NEW COST OF OPERATION while ignoring the fact that they have done nothing to actually increase the income of those that will go to that venue and spend money there or those that will be taxed to pay for the long term maintenance and operation of that facility you have a problem

    unless your airport project actually saves money by cutting jet taxiway idle time and fuel usage or turn around for planes taking off and landing it is just a make work job

    unless your city hall is much more energy efficient, more productive for employees and less costly to maintain it is a make work job

    when you are a national and international casino company and your new project in one area cuts into the revenues and profits in another area it is not a driver of the economy

    when your new sports venue is the same cost or more as the old one with higher ticket prices for the same overall consumers it is just a make work job......when everything inside is so expensive that other businesses around it suffer it is probably a net economic loss

    ferris wheels, zip lines, clubs that shut other clubs down, hotels that take from other hotels, convention centers that take conventions from other places, newer and bigger and more expensive government buildings.....these are the vestiges of a desperate economy not a healthy robust one

    the USA is tapped out period the end on entertainment dollars and no bigger larger entertainment venue or idea will change that simple fact period

    lower cost of energy, more efficient production of food with less waste that leaves more for exports or lowers a families food cost, more efficient use of natural resources or the increased extraction and refining of natural resources, lower cost of manufacturing so the USA can compete globally, less time and energy wasted on stupid rules and meaningless regulations......these are the things that the USA has to turn to for the economy to grow otherwise we can all look forward to more of the same
     
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