Facebook
Fark
Digg
Reddit
StumbleStandard & Poor’s predicts another tough year for gaming industry
Tuesday, Dec. 22, 2009 | 5:51 p.m.
Hurt by too much capacity, even as demand improves, the gaming industry faces another tough year in 2010, Standard & Poor’s Equity Research reported Tuesday.
“Gaming fundamentals continue to be poor,” S&P said. “Its largest markets, Las Vegas and Atlantic City, are more severely impacted by higher levels of supply in Las Vegas and increasing competition from gaming expansion in neighboring states.”
With the recession reducing visitation to Las Vegas, hurting Strip casino resort operators, and soaring unemployment hurting locals casinos, Nevada gaming revenue for the fiscal year ended June 30 fell 13.7 percent to $10.8 billion.
The July-October 2009 win fell 10.6 percent to $3.4 billion, making this the worst year for Las Vegas hotel-casinos in memory.
Standard & Poor’s analysts also commented Tuesday on the lodging industry, which worldwide has been hurt by a decline in travel — particularly high-end business and convention travel — tied to the recession.
“Our view for the hotel industry in 2010 is for a long period of continued tough operating conditions, with oversupply becoming more the story as demand somewhat recovers. We think this will likely lead to only a small uptick in industry occupancy rates from severely depressed levels,” S&P said. “The continued growth in supply, coupled with a continuing shift in hotel guests’ preference for cheaper rooms, will likely lead hotel operators to lower rates, pressuring revenue per available room.”
As for gaming, the analysts added: “We expect the industry’s performance in
2009 and 2010 to be notably worse than lodging’s because gaming is more sensitive to consumer discretionary spending.”
Today’s report from S&P follows one issued last week by Fitch Ratings.
Fitch forecast “industry trends will remain weak well into 2010. Gaming revenue growth will continue to be broadly pressured as unemployment is expected to remain at elevated levels at least through 2011, which will dampen consumer spending.”
Discussion: comments so far…
Comments are moderated by Las Vegas Sun editors. Our goal is not to limit the discussion, but rather to elevate it. Comments should be relevant and contain no abusive language. Comments that are off-topic, vulgar, profane or include personal attacks will be removed. Full comments policy. Additionally, we now display comments from trusted commenters by default. Those wishing to become a trusted commenter need to verify their identity or sign in with Facebook Connect to tie their Facebook account to their Las Vegas Sun account. For more on this change, read our story about how it works and why we did it.
Only trusted comments are displayed on this page. Untrusted comments have expired from this story.
No trusted comments have been posted.
Post a comment
Most Popular
- Viewed
- Discussed
- E-mailed
- Superstar Whitney Houston dies at 48
- Two dead after accident in downtown Las Vegas
- Instant Analysis: Debating whether UNLV should continue series with San Diego State
- UNLV can move forward without the burden of losing streak to San Diego State
- A wife’s wisdom shows birth control issue needn’t be divisive
- Vegas oddsmaker expects Adele to have a great night at Grammys
- UNLV makes key plays down stretch to hold off San Diego State 65-63
- Hope and change and … what’s missing?
- Surprise links, negotiated deals addressed by commissioners
- Mitt Romney wins Maine caucuses, CPAC straw poll
Blogs
The Kats Report
Color from scene at Thomas & Mack: We have a wire job! Rebels win, and Louie Armstrong sings!
South Point owner Michael Gaughan's take on 'Vegas Stripped': 'I'll give it an 8' (4 Comments)
Author relishes writing the life story of ‘larger-than-life’ Oscar Goodman (3 Comments)
Elsewhere
Landowner: All roads could lead to Uxbridge casino
Revel reveals smoke-free casino opening
Cirque du Soleil show in Sands China casino to close this month
Meet the woman behind Sheldon Adelson
The Sun
Locally owned and independent for more than 50 years.
For years we have had of perverse anti-American employment policy from the top.
We basically have no manufacturing in the entire country and nearly no industry, nationwide.
No high paying jobs, no gamblin' money for 'Vegas, baby.
Even the CEO of GE, Jeff Immelt, knows our manufacturing and industrial base is gone.
Jobs-wise, the trade "Executive Agreements" that we enter into, like NAFTA for example, have their roots going back to WWII when Congress, under the auspices of a declared war, ceded their trade negotiation power to the Executive Branch, namely to FDR's administration.
On June 7, 1943 a provision for Executive Agreements (Foreign Trade Agreements) was added to the Trade Agreements Act of 1934 (which was in itself a modification of the Tariff Act of 1930, commonly known as Hawley Smoot) that allowed the Executive Branch of the Federal Government to negotiate, or as we now know it "fast-track", stand-alone trade agreements without practically any input from Congress.
This sole Executive branch trade agreement power has been continually re-authorized, disguised as one trade act or another ever since, (i.e. the Trade Act of 1974, Omnibus Trade and Competitiveness Act of 1988, etc).
So in essence, today's Congress has nearly no power to negotiate any trade items with nearly nobody. Period.
What this boils down to is that legislation that was enacted under a fully declared war in the 40's, and that gives sole trade negotiation power to the Commander in Chief and the Executive Branch, has been with us ever since that fateful June 7th day in 1943.
That explains NAFTA, GATT, US-Israel Free Trade Agreement '84, the Caribbean Basin Initiative Economic Recovery Act, etc., to some extent Reagan's Maquiladoras in Mexico, and our current and previous huge trade deficits with China, Japan and foreign countries, and all the other enacted tariff, trade, foreign manufacturing, and international industrial agreements signed off by the Commander in Chief.
Using TARP funds nationwide, which is essentially "invented" money that has papered over (covered up) the fractured and dismal decisions of the nations banking and mortgage industries, is nothing more than borrowing against future "non-earnings" that would likely provide nearly no noticeable effects.
What our Nevada delegation should be focusing on is returning the trade negotiation powers back to Congress where it belongs, (i.e repealing Executive Agreement power given to the Executive Branch) and focusing on a complete audit of the Federal Reserve (i.e. HR 1207 from Representative Ron Paul, specifically). This will enable us to determine where the most serious financial and trade blunders occurred, correct them, and allow the USA's economy to fully heal rather than bandage up a desperately ill future economy.
Now that Harrah's is in bed with the commies, along with Wynn, Adelson, and Kerkorian, by opening joints in Macau, China, we gonna be longtime hurtin', baby.
Just think what this oasis in the desert be like in 5 10 15 year from now........Rome could not of fell so fast.
just wait...just wait until the buzz of citycenter has worn off and you'll see this town crater like never before.
it's not about being negative, it's about being realistic and not taking the spin from the p.r. types as "news".
go back to fall of 2008 when it was really starting to be clear things were looking really bad for vegas.
all the casino "suits" were saying "oh, not vegas...vegas is recession proof".
the workers that built it are leaving and there are not enough tourists to keep all those casino / retail workers employed...then they'll all be back in the unemployment pool and there's just not going to be jobs for them this time.
city center was off by two years in either direction.
if they would have started building it 2 years earlier like in 2004, it might have been able to catch that last breath of the "boom cycle".
2 years later...it would have never been finished, just like echelon.
now, they're stuck with that ugly white elephant.
How much did Standard & Poor's get paid for that prediction? I would have done just as good a job for half the price!
US Airways goes from 200 flights per day in Spring 08 to 35 currently and soon to 11 flights a day. Who is in charge of keeping flights coming into Vegas? No one apparently. How do you fill Citycenter when people can not get a flight into Vegas? The leaders who turned around Vegas after 9/11 are no where to be found. It would be wise of Vegas to bring those players back as it is not working right now. Will anyone step up and look to the past efforts of the people who made it happen, instead of plowing forward with leaders who have not shown progress in the past 3 years? It was not just what happens in Vegas stay in Vegas that brought people to town. The new fuzzy creature commercials are not getting it done and the analysts realize what local leaders are refusing to recognize. That is sad for everyone in Vegas.
making more and more debt and raising the house hold for warfare and other non-sense expenses will probably fix it. Do you really believe that 138 billion dollars for 2010 for ware in Irak and Afghanistan is doing any good????? What's this war-policy leading into? Stop these wars and you will have hundreds of billions available for better things to get your country getting under way, economically. No reason to go and play war in so many different countries of the world. This is a very smart way to get the weapons industry going, but matter of fact, this is not the way to help your country in the long run.
Greed for all intensive purposes is good. (Gordon Gecko) Vegas corporate idiots remember the lessons of Wall St. , but then again.. they never learn, and probably never will until they hit rock bottom, which is not far from where they are right now...
Boris R. :
No matter what Obama says or does, he will NEVER live down the historically bad decision he has made to send 30 thousand more troops to Afghanistan at a estimated cost of 138 billion dollars. This will be seen by historians as the biggest blunder that the U.S. made in this time of financial blight and depression. It is a waste of human lives and money which we don't have. This one moment he had to do the right thing and end our involvement over there stands as a tragic reminder of how our elected leaders are total and complete idiots.
The issue of flights and airfair to vegas will continue to be a problem. We were considering a trip to Vegas on Saturday for two nights. We can get a comped room at any harrahs property but the cost of our airfare would be approx. 500 dollars per person from Texas. As with most people we really don't need to spend that kind of money before we even get to Vegas. We could take that kind of money to multiple casinos within two hours of us and have a ball. Not an easy problem to fix, and I know this will not help the economic situation in Vegas.
Why going to Vegas if you don't have the cash for a 500 dollar round trip airfare (normal on high holiday periods) and then, if you can't or don't want to spend that sort of cash, what are you going to gamble with? I don't buy it that you would want to go to Vegas just because you can sleep for free at Harrah's, would you?
My point would be that most people in this economy don't want to spend a grand before they hit the ground. I do have the cash but I guess I just look at it from a diffrent perspective now. I would imagine that alot of people are doing the same. It is really a conversation about how alot of people approach a trip to Vegas in this economy.
I have a friend who is about to be laid off from one of the big airlines. She says that the LV airport authorities are making it increasingly difficult for the airlines to operate here. Not sure if this is true or not, but perhaps the powers that be could look into this.
As far as not having $500 to get here, so why bother coming... I think you (and perhaps casino operators) are misunderstanding how most people think. Most people just aren't into the conspicuous consumption thing Las Vegas offers of late. I have a relative who used to come here two or three times a year and stay at the strip. She can certainly afford it, but when the flights went from $350 to $700 she stopped coming. She felt like she was getting ripped off. Same with the $300 dinner and $500 "bottle" service scam. Tourists want to get good value for their money whether they spend a little or a lot. Especially in today's economy.
The fix is in on the entire Vegas deal, and everyone knows it. That's why they are staying away...
"As far as not having $500 to get here, so why bother coming... "
okra
This is what Woodman is saying - why pay $1000 BEFORE even getting to Vegas, even if you can afford it. However, we all know that waiting until a week or less before you want to leave to purchase a ticket is going to get you the highest air fare, unless you want to fly stand-by which is probably no better.
Also, flights to Vegas from anywhere in the country never seem to fall into those "air fare sales" the airlines are always pushing. I used to laugh at the Southwest ads - "as low as $49 round trip" then you go and do your return flight from where ever to Vegas and vice versa and it ends up being minimum $350-400!!!
As far as the airlines cutting Vegas flights - why is that? Do you think the demand is lower than ever before? Or is it a ploy to get that $500 per ticket regardless when you book it? Las Vegas is very popular destination on the airlines that fly there so I don't understand the cuts in flights, etc.
"Gaming fundamentals continue to be poor," S&P said. "Its largest markets, Las Vegas and Atlantic City, are more severely impacted by higher levels of supply in Las Vegas and increasing competition from gaming expansion in neighboring states."
No kidding..... including the other 46 States other than the neighboring States of NV and NJ!!
Why do Vegas?
Black hole slots. Skanky sluts cleavaging everywhere ya go. Pay the airline and wait. Pay the hotel and taxes.
We can do the same slots at home, pay the neighbor and sleep better in our own beds. No wait.
Wanna bet the three big words about the Vegas economy in 2010 aren't "Commercial Real Estate?"
I still like going to Vegas, Just got back from there. Third visit since august. We stayed 2 nights (I.P.) for about $60 total. About $60 for gas, including all the driving around L.V. We played slots a little, Basically what we left at Wynn and Ballys, we got back plus a little at Flamingo. Saw a good blues band at B.B. Kings at the Mirage, ate at our favorite places, visited about every casino between Wynn/Encore and City Center. I do agree that if I had to buy $1000 wirth of airline tickets, it just wouldn't happen. As long ad the rooms stay cheap, we'll keep making the 4 hour drive 3 or 4 times a year. I've never been in any of the Indian Casinos that are all over the place nowadays. Comparing them to Vegas is like comparing a local carnival to Disneyland, It may be fun, but it's not the same thing.
obama will put the final nail in LV's coffin with his taxes on small business for obamacare.
My expectation is that 2010 will see an increase in visitors to Las Vegas. The economy does seem to be improving around the world. However, the oversupply of hotel rooms in Las Vegas will cause cash-flow problems for the casino/hotels.
I strongly disagree with the posters who take the position that if you won't spend $500.00 to get to Las Vegas, then don't bother coming. The attitude that "it costs what it costs so I'll pay it" is long gone for most visitors. My guess is that most visitors now demand good value for airfare and hotel, and won't come to Vegas unless the cost is reasonable. Another poster made an excellent point about reduced flights to Las Vegas--if that persists, then the visitor count won't increase. People have to be able to get to Las Vegas, AND at a reasonable cost.
Bakersfield, sounds like a great trip. If we were in your' area we would do the same thing.