Betting On Vegas
The numbers are out for Las Vegas, and they look promising. The Las Vegas Convention and Visitors Authority reports that the number of visitors to Sin City in November rose nearly three percent from the year before, to 2.9 million people.
This was the third monthly increase in visitor traffic.
Room occupancy was down less than one percent, the smallest decline in nearly two years, but occupancy was up on weekends. Still, the biggest drop in November was in room rates, which were down 15 percent, to $94.
Most importantly, gaming on the strip rose eight percent from a year ago. Did you hear that? GAMING REVENUES ON THE STRIP ROSE EIGHT PERCENT, to $474 million. That is the first monthly gain on the Strip since December 2007, and this is even before CityCenter opened in December.
Yet not everyone’s convinced Vegas is now being dealt a better hand. Wells Fargo Securities analyst Dennis Farrell is quoted in the Las Vegas Review Journal as saying that airlines are cutting flights into McCarran International Airport.US Airways is cutting the number of flights in half. “These capacity cuts could remove up to 4,000 seats per day, which will likely raise airfares for patrons travelling to Las Vegas,” Farrell told investors.
Convention attendance is down 25 percent for the year, but in November, it was “only” down 13 percent and, in fact, the number of conventions rose four percent.
How have things fared since November? Jim Goldman blogged last week from CESthat the city seemed to be humming. Majestic Research, however, says that New Year’s weekend was “the weakest on record.” Overall game usage dropped seven percent from a year ago, down even more if you exclude the brand new Aria at MGM Mirage’s CityCenter.
Majestic says MGM Mirage was the only company which saw growth in gaming over New Year’s, up 6.4% “thanks mostly to Aria, which appears to be cannibalizing the rest of the Strip.” Without Aria, MGM’s game usage dropped 11 percent, while Harrah’s dropped 16 percent, Wynn dropped 18 percent, and Las Vegas Sands dropped 22 percent.
But before you get all depressed and cash in your chips on the industry, Goldman Sachs gaming analyst Steven Kent is quoted in the Review-Journal as saying that Las Vegas trends have gotten “less bad”, and he thinks MGM Mirage has turned the corner. One manager at a property on the Strip agrees, telling me that January has been so good, they’ve actually started providing employees with some after-tax benefits again. Jackpot.
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