Casino Operators

[HenryTo]

CES attendees cutting back. Combined with less discretionary spending at Vegas going forward, hotel rates during the show have been coming down dramatically and unexpectedly.
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Las Vegas offers surprise hotel bargains for CES

By Franklin Paul

NEW YORK, Nov 7 (Reuters) - Gadget geeks, used to booking hotel rooms way in advance for the annual Las Vegas Consumer Electronics Show, may be one-upped by lazier peers this January.

With just two months to go before the Jan. 8-11 show, hotel rooms on the Strip are usually sold out by now. But this year, rooms are not only still available but rates are doing the improbable: falling.

It's too soon to tell whether the appeal of the world's biggest gadget fest has dimmed, but based on recent economic news, one real culprit is that space has been freed up by a slump in tourism in Sin City.

What is more, participating companies could be sending fewer workers.

The Consumer Electronics Association, which organizes the show and represents the $160 billion industry, updated its website last week with this message: "Eight Official CES Hotels Reduce Rates During Show Dates."

"Many hotels are dropping their nightly rates, some as much as $75 a night," CEA said on its site.

CES usually locks down everything in Las Vegas, from hotel rooms to restaurants and cabs, as more than 100,000 people storm the city to admire the next big thing in technology, whether it be tiny phones or 150-inch TVs.

The four-day event is a pivotal showcase for more than 2,000 gadget makers from some 140 countries. In previous years it has been the platform where breakthrough products such as plasma TVs and Microsoft Corp's (MSFT) Xbox video game console first saw the light of day.

Wall Street financial analyst Shannon Cross said she heard prices were dropping and grabbed a room at developer Steve Wynn's newest resort hotel.

"It's been on my list to recheck prices in Vegas, because my reservation was pretty expensive," said Cross, who originally booked her stay in September. "I am going to cancel and rebook -- I'm taking advantage of bargain prices."

On the Strip, the Tropicana Las Vegas, operated by Tropicana Entertainment LLC, cut its peak rate by 17 percent to $179 a night, while the MGM Mirage's (MGM) Monte Carlo's rate has fallen 12 percent to $240. That would be unheard of in past years, when those rooms would go for as much as $300.

To be sure, rooms carrying special CES rates at several high-end hotels, as well as those closest to the convention's main venues, are sold out, according to the Consumer Electronics Association. They include the Las Vegas Hilton, Venetian, and MGM Mirage's Mandalay Bay and Mirage.

Advanced registration for show is "looking good," according to a CEA representative.

However, large organizations -- which send dozens of staffers to man company booths and events, meet with retail buyers and peek at rival wares -- are certainly more mindful of travel budgets these days. They may reserve fewer rooms that week than they have in the past.

One major consumer electronics maker told Reuters that while it will still have a large contingent at the show, its planners are looking for ways to "streamline" manpower.

Earlier on Friday, Casino operator Trump Entertainment Resorts Inc (TRMP) reported a quarterly loss as the economic slowdown continued to hurt the gambling industry. Harrah's Entertainment, which operates seven Las Vegas resorts, blamed its poor results on "the economic upheaval weighing on the country."

And on Thursday, shares in Las Vegas Sands Corp (LVS), operator of the Venetian resort and the Sands Expo and Convention Center -- where much of CES takes place -- tumbled amid concerns about its ability to survive.

Stocks of casino operators have been punished over the past year as a gambling boom in Las Vegas has fizzled, and tight credit markets have jeopardized growth plans.

[lewie2004]

You were not off. You were just early!!!!!!

[rffrydr]

I was off by seven years in this trade...but paid for itself showing the faltering dragon:

[rffrydr]

Indians will gamble no more forever:

http://sacbee.com/topstories/story/1552374.html
_________________
Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Another kick in the face to MoTown:

[rffrydr]

Southwest kicking in with their own fiscal program: 50% off to Vegas two days only.

http://www.southwest.com/landing/vegas_50off.html?src=e123008
_________________
Today is the Tomorrow you worried about Yesterday!

[HenryTo]

Time Magazine on the current recession in Las Vegas:

http://www.time.com/time/business/article/0,8599,1868932,00.html?cnn=yes

[rffrydr]

Encore! pics

http://travel.latimes.com/articles/la-tr-encore28-2008dec28
_________________
Today is the Tomorrow you worried about Yesterday!

[HenryTo]

Steve Wynn opens its new luxury casino, the Encore. Historically, new casino-hotels on the Strip have attracted ever more new visitors, but I sense this "wow" factor is quickly disappearing - not because of the slumping economy but because the gaming sector has become oversatured. In other words, the marginal utility of a new luxury casino in the eyes of potential new visitors have declined dramatically over the last decade. The opening of the Encore resort will simply add more capacity to a market that is going to struggle mightly in 2009:
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New Wynn casino faces unprecedented Las Vegas slump
Mon Dec 22, 2008 8:00am EST

By Deena Beasley

LAS VEGAS, Dec 21 (Reuters) - Steve Wynn towers over the Las Vegas Strip in commercials for his new Encore resort, but the recessionary slump in business along the fabled gambling corridor could soon bring the casino mogul down to earth.

Wynn Resorts Ltd (WYNN.O) is on Monday slated to open the $2.3 billion, 2,000-room Encore, a curved tower of bronze glass that nearly mirrors the adjacent Wynn Las Vegas, the company's three-year-old luxury casino hotel.

Meanwhile, shares of Wynn Resorts have fallen about 66 percent since February as the casino industry has grappled with tight credit markets and a downturn in gambling demand.

Encore will mark its debut at a time when crowds have thinned in Las Vegas, fewer private jets are rolling in and hoteliers are slashing rooms rates to attract as much foot traffic as possible.

"I've always opened up hotels in boom periods -- it is a fascinating moment to open a hotel in a market that's extremely tough," Wynn told Reuters in a recent interview.

But he was confident that Encore will be recognized for its "extraordinary attention to detail."

The casino magnate serves as chairman, chief executive and part owner of Wynn Resorts, which also operates a casino-hotel in China's Macau. His involvement in Las Vegas dates back to the late 1960s, when he invested in the Frontier Hotel.

Wynn subsequently took on the Golden Nugget in downtown Las Vegas and parlayed that profit into the multi-casino company named Mirage Resorts, which was acquired by MGM Grand in 2000.

The opening of the $2.7 billion Wynn Las Vegas in 2005 marked a further lifting of the bar in terms of high-ticket design and expensive offerings for Las Vegas, where themed resorts such as the Paris Las Vegas or the Wynn-built Mirage, had become the norm.

SUNLIGHT, SINATRA

That track record has earned Wynn a big fan base.

"The fact that Encore is another Steve Wynn hotel makes it intrinsically exciting," said David Schwartz, head of the gaming studies research center at the University of Nevada, Las Vegas.

Features of the new resort include plenty of natural light, an Italian restaurant named Sinatra and Wynn's signature mosaics and abundant use of luxury fabrics and flowers.

But spending on the Strip has been falling as consumers hunker down amid tighter credit, higher unemployment and a slumping stock market.

"Consumer confidence has fallen dramatically ... For the majority of the state, we are seeing double-digit declines in spending," said Frank Streshley, a senior research analyst at the Nevada Gaming Control Board.

In October, Las Vegas Strip casinos won 26 percent less money from gamblers than a year earlier -- the biggest such decline ever.

"Economics 101 -- it's going to be tough for prices to hold at the levels they are now," said Matthew Jacob, an analyst at Majestic Research.

Prices for hotel rooms have already plummeted as casino operators scramble to keep the rooms filled.

The average price of a Las Vegas Strip hotel room for the first week of January is down 35 percent from a year earlier, according to a survey by JP Morgan, which also found that rates for the key New Year's Eve holiday have fallen 27 percent.

"The economy amounts to a room pricing decision for us," Wynn said.

The latest statistics also broadcast ominous signals about the high-net-worth customers coveted by Wynn and other Strip resorts, such as Las Vegas Sands Corp's (LVS.N) Venetian and Palazzo or MGM Mirage's (MGM.N) Bellagio.

Overall airline passenger traffic into Las Vegas' McCarren Airport fell 13 percent in October from a year earlier, but the volume of charter and international traffic slid 35 percent.

Also, revenue from baccarat, a card game popular with big-betting gamblers from Asia, plunged 63 percent in October from a year earlier.

"It looks like high-rollers are cutting back ... I think the trend will continue," said UNLV's Schwartz.

If that happens, the outlook will dim not only for Wynn's Encore, but for a string of luxury resorts slated to open in Las Vegas over the next few years.

MGM's massive CityCenter project is scheduled to open late next year, while Fontainebleau Las Vegas and the Cosmopolitan resort are expected to open next fall.

"I think it (Encore) is going to be wonderful for the town," Jim Murren, chief executive at MGM Mirage, told Reuters.

"It's not going to add to anyone's level of anxiety. It's going to be a tough first quarter here anyway," he added.

[rffrydr]

What happens in Vegas spreads like a bad STD:

http://seekingalpha.com/article/111073-goldman-on-commercial-real-estate?source=feed

[HenryTo]

MGM finally (finally) divests Treasury Island - for $775 million - in order to raise liquidity:

http://online.wsj.com/article/SB122934991105206643.html?mod=yahoo_hs&ru=yahoo

[HenryTo]

Any way you slice it, this is a dismal number. Note that the vast majority of locals does not gamble on the Strip, so this is a good first look at leisure/tourism spending within the US in the last couple of months:
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Las Vegas Strip Oct gambling revenue falls 26 pct
Wed Dec 10, 2008 3:05pm EST

LOS ANGELES, Dec 10 (Reuters) - Las Vegas Strip casinos won $475 million from gamblers in October, 26 percent less than a year earlier for the worst such decline ever, the state's Gaming Control Board said on Wednesday.

Statewide, Nevada casinos' take from gamblers fell 22 percent to $905 million for the month as the U.S. economic recession continued to cut into consumer spending.

The state has seen gambling revenue drop for 10 consecutive months.

Spending at casinos began to decelerate sharply at the end of September, and the October-to-October comparison was compounded by the fact that the casinos' winnings had hit an all-time high in October 2007, control board senior research analyst Frank Streshley said.

Year-to-date, Nevada gambling revenue has fallen 8.3 percent statewide and 8.7 percent on the Strip, he said.

The revenue decline suggests that the Las Vegas gambling market will weaken further in the fourth quarter as airline flight capacity is reduced, consumer spending worsens and housing prices/unemployment continue their negative trends, Morgan Stanley analyst Celeste Mellet Brown said in a research note.

Separately on Wednesday, the New Jersey Casino Control Commission said Atlantic City casinos won $346 million from gamblers in November, a 7.8 percent drop from a year earlier.

[HenryTo]

Wynn resorts strives to raise nearly $350 million in a secondary offering - mostly for debt repayment purposes. A good time to be buying back one's own bonds in the current environment:
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Wynn Resorts boosts public offering to 8M shares
Friday November 14, 7:39 am ET

LAS VEGAS (AP) -- Casino company Wynn Resorts Ltd., which is run by billionaire Steve Wynn, said late Thursday it has boosted the size of its public stock offering to 8 million shares and priced the offering at $43.50.

Earlier Thursday, Wynn Resorts said it planned a smaller offering of 5 million newly issued common shares to meet the expected demand for its stock when the company joined the Standard & Poor's 500 index. S&P was expected to replace chemical maker Ashland Inc. with Wynn Resorts after the close of business on Thursday.

Wynn Resorts plans to use the proceeds for general corporate purposes, including debt repayment.

Deutsche Bank Securities Inc. and Banc of America Securities LLC are acting as joint book running managers and underwriters for the share offering. Wynn Resorts has granted the underwriters an option to buy up to 1.2 million additional shares to cover any overallotments.

According to a Securities and Exchange Commission filing, Wynn Resorts had 104 million shares outstanding as of Oct. 31. The offering is expected to close Tuesday.

Also Thursday, Wynn Resorts reported that it revised its agreement with Deutsche Bank, allowing the company to repurchase up to $650 million of debt.

Wynn Resorts shares closed at $44.76 on Thursday, but lost $1.26, or 2.8 percent, in premarket trading Friday.

[rffrydr]

[HenryTo]

Atlantic City's casinos hitting the skids - further compounded by a city-wide smoking ban:

http://www.chron.com/disp/story.mpl/headline/biz/6102360.html