COVID-19's eventual effect on the Las Vegas Strip value problem

ejd_5277

EOG Dedicated
One author's take:

https://www.fool.com/investing/2020/04/09/why-re-open-the-las-vegas-strip.aspx

I'm really hoping that when things do get back to normal that cooler heads will prevail with regard to the nickeling-and-diming of the customers that has become so prevalent in a city that for ages was known for value.

Personally, I disagree with Mr. Hwang's assertion that it could be 6-12 months before the Strip reopens at all, but I do agree that it will be a shell of its usual self until there's a vaccine.

I think the best way to do that would be a bankruptcy and forced asset liquidation of one or both of the "Big 2." (MGM or Caesars)

MGM has a much more solid cash position than Caesars, but their fixed costs are also much higher.

I think Reno may come back stronger initially, as its business is not nearly as dependent on air travel as Las Vegas,

Curious as to others' thoughts.
 

John Kelly

Born Gambler
Staff member
Las Vegas visitors are gamblers.

They take chances and they'll return when the economy is re-opened.

Six to 12 months before the reopening of Las Vegas?

I don't think so.

Las Vegas locals and California visitors will help support the city until the tourists, national and international, get healthy again.

I once heard it said the farther a visitor travels to arrive in Las Vegas, the more valuable he/she becomes to the casino's bottom line.
 
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FairWarning

Bells Beer Connoisseur
Las Vegas visitors are gamblers.

They take chances and they'll return when the economy is re-opened.

Six to 12 months before the reopening of Las Vegas?

I don't think so.

Las Vegas locals and California visitors will help support the city until the tourists, national and international, get healthy again.

I once heard it said the farther a visitor travels to get to Las Vegas, the more valuable he/she is to the casino's bottom line.
Lets say the Strip is open in time for football season (assuming there is a full season). Money will be far tighter as we are looking at DD unemployment. When money is tight, do they really need to get nickle and dimed in Vegas? I agree the SoCal and Arizona customers will be back, but will the midwestern and east coasters? THere are more options to gamble now, starting with sportsbooks here.
 

Biff41

EOG Dedicated
One author's take:

https://www.fool.com/investing/2020/04/09/why-re-open-the-las-vegas-strip.aspx

I'm really hoping that when things do get back to normal that cooler heads will prevail with regard to the nickeling-and-diming of the customers that has become so prevalent in a city that for ages was known for value.

Personally, I disagree with Mr. Hwang's assertion that it could be 6-12 months before the Strip reopens at all, but I do agree that it will be a shell of its usual self until there's a vaccine.

I think the best way to do that would be a bankruptcy and forced asset liquidation of one or both of the "Big 2." (MGM or Caesars)

MGM has a much more solid cash position than Caesars, but their fixed costs are also much higher.

I think Reno may come back stronger initially, as its business is not nearly as dependent on air travel as Las Vegas,

Curious as to others' thoughts.
Politicians could open up Las Vegas next week with limits on crowds, if they wanted to. Flu numbers are hitting peak periods which means the natural public immunity is starting to kick in.
 

WeinketoWarrick

EOG Master
I am planning on heading to the Mirage the first weekend of November for Breeders Cup. I gamble hard 18 of 24 hours for three straight days.

I currently live in the Midwest.

Love Vegas and think it’s one of a kind and can’t wait to go back.
 

Sol Diablo

House of Heat
As soon as it opens back up...

I'm gonna start on the south end of the Strip. On the East side. As it stands, that would be the Trop. If it's still open when the curtain goes back up.

I'll grab a drink in every casino. And walk north to the next. No reason to walk past the Wynn. I'll make U-Turn there and go back down the west side.

All the way back to Mandalay Bay. Let's hope most are open when this garbage is done. I'm afraid I'll be walking a shit ton in-between drinks. But I won't care.

Four Aces with a Kicker on DD Bonus Poker. Let's fucking go!
 

MrTop

EOG Master
I cannot see people jumping on the plane right away in big numbers. Sports books will be open. I would like to see Vegas casino's complain they are not getting enough sports book business opening up wire act talks so bettors could bet into vegas from anywhere in the country. Long odds right now but it would be nice.
 

winkyduck

TYVM Morgan William!!!
WHEN the WSOP gets cancelled that will be a crushing blow since gottaa think that generated a good 8-9 figure payday for the city when all is factored in

If the casinos are not open in time for football - assuming there is and that is a big IF - my guess is they will still generate action but on a mobile app or the like

.....................and the scenario with the Raiders - YIKES!
 
There will probably be less visitors but I’d imagine the handle will be pretty decent. People not affected with employment will have extra cash in their pocket from the months of no extra spending for entertainment and nights out. Gamblers are going to let loose with pent up months of no action.
 
The issue for the Strip isn't the gambling, it's the potential lack of revenue from all the other sources. Will people get on planes to spend a weekend in a nice hotel, fancy restaurant, high end mall, showroom, etc. Those are all real serious risks. However they don't all have to be closed, that's why Im arguing for the soonest to open the front doors. That will allow longer time frame openings to come sooner. Maybe the nightclubs will be a long term open, but most of these young kids aren't worrying about Corona as we have seen.

The gambling I'm not so worried about because I know what these places see in action. It's not 80/20 rule, it's more like 80/5. Yep 5% of the players generate about 80% of the gaming revenue. That's all they need to get into the building. All the speculation about will some suburban mom from Chicago want to go gamble in Vegas is meaningless if she's not in that 5% group. Further the 5% are wealthy, they spend money that comes from businesses and investments. They aren't laid off right now and trying to get their stimulus check to pay for a Vegas trip.
 

Biff41

EOG Dedicated
The issue for the Strip isn't the gambling, it's the potential lack of revenue from all the other sources. Will people get on planes to spend a weekend in a nice hotel, fancy restaurant, high end mall, showroom, etc. Those are all real serious risks. However they don't all have to be closed, that's why Im arguing for the soonest to open the front doors. That will allow longer time frame openings to come sooner. Maybe the nightclubs will be a long term open, but most of these young kids aren't worrying about Corona as we have seen.

The gambling I'm not so worried about because I know what these places see in action. It's not 80/20 rule, it's more like 80/5. Yep 5% of the players generate about 80% of the gaming revenue. That's all they need to get into the building. All the speculation about will some suburban mom from Chicago want to go gamble in Vegas is meaningless if she's not in that 5% group. Further the 5% are wealthy, they spend money that comes from businesses and investments. They aren't laid off right now and trying to get their stimulus check to pay for a Vegas trip.
And dont forget alot of the smaller off strip casinos rely on locals and smaller betters. Collectively they add up and support the jobs market in Nevada.
 
With mobile betting being already basically ubiquitous out here, at least sports betting already is configured for a still quasi-socially-distanced world after the casinos reopen.

And in my nonscientific review -- while scrambling to cash outstanding tickets and/or withdraw any substantial sums left in accounts right before the shutdown -- there still were people in the casinos, the Strip casinos, on offpeak nights right before the shutdown. (They didn't build this town on rocket scientists coming here, although some of them probably like to come here, too, at least for the strip clubs, working girls, etc.)

It won't be right back to business as usual for sure, but I believe that they'll pull through.

And as has been noted previously in this thread, they treat us locals very well, including down on the Strip, when the tourist business is off a bit during a recession.
 
I am watching for real estate deals here, as unsurprisingly there's a pretty strong correlation between the Strip being down during a recession and the local real estate market then taking a substantial hit during the downturn.
 
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There are a surprising number per capita of houses of worship of various faiths here in town, Rail. Can't remember the numbers, but it was surprising to me at first; and the numbers are borne out when you drive around the valley away from the Strip, which also has a church or two, IIRC. Westside, in particular, has more churches and former churches than I think I ever have seen in one such compact place.

That said, repenting, fasting, and praying aren't exactly the Las Vegas Strip business model.
 
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