Las Vegas Casinos try to analyze economic effect on best online casino singapore

 

 

 

Hotel occupancy rates were as low as 50 percent this past weekend at the Strip’s most successful megaresorts, as tens of thousands of guests stayed home after Tuesday’s terrorist attacks on the World Trade Center and Pentagon.

 

Fewer customers could be found at Bally’s, the Flamingo and Bellagio, among other well-known casinos, than on a typical Friday or Saturday night, when weekend occupancy rates typically run as high as 100 percent.

 

“We came into town, and the Strip wasn’t nearly as busy,” Los Angeles resident Joe Garcia said. “Normally it would take over an hour to drive from downtown to the end of the Strip, but last night it only took about 30 minutes.”

 

Revenues are expected to be down for several weeks in all aspects of megaresort operations, and casino industry bosses will have to consider a multimillion-dollar challenge to their bottom line.

 

The goal is to determine the amount of revenue and jobs that could be lost in Las Vegas if tens of thousands of tourists stay away from the city for an extended period of time.

 

The reality: No one knows.

 

The business declines left workers at the Strip’s largest properties voicing fears of layoffs. Top executives at MGM Mirage and Park Place Entertainment rejected such talk this past weekend, but MGM Mirage executives do expect to cut back standby workers called in each day, while sending many home early if they are not needed.

 

How long could the trouble last?

 

“Clearly, there’s going to be a short- to medium-term reduction in airline travel, both for tourism and business purposes,” said Peter Navarro, an associate professor of economics at the University of California, Irvine.

 

How long is short term? That could be three months to a year, Navarro said.

 

And long term? That could be several years, he said.

 

“Whether employers will salute the bottom line or in some sense do their duty and help everyone get through this is an open question, and I suspect the bottom line will win out over patriotism.”

 

An estimated 250,000 tourists are in Las Vegas on an average day, with 46 percent of them arriving through McCarran International Airport, and they contribute to a $31. 5 billion a year tourism industry.

 

If travel drops by 5 percent in the coming weeks, as it nearly did at the start of 1991’s Persian Gulf War, that would mean 12,500 fewer tourists in the city every day — about as many rooms that are found at the MGM Grand, New York-New York and Excalibur.

 

According to the Las Vegas Convention and Visitor Authority’s 2000 survey of 3,300 visitors, the typical Las Vegas stay is slightly less than five days and four nights, with the average visitor spending $711 on nongambling items.

 

Eighty-five percent of the city’s visitors gamble – best online casino singapore , with each spending an estimated $665 on slots and the casino tables, according to the survey.

 

That translates to $15.8 million in gaming and nongaming revenues for every 12,500 visitors, or about $3 million a day or $1.1 billion over a one-year period.

 

But no such thing exists as a typical Las Vegas customer. Some gamble millions during a stay; others less than $100, and the idea of extrapolating long-term estimates from the authority’s survey results sparks some concern.

 

“The challenge is we don’t have an average visitor,” said MGM Mirage spokesman Alan Feldman. “This is not McDonald’s.

 

“We do end up trying to make these abstract calculations, but they aren’t realistic.”

 

One casino industry boss said he has been checking his company’s numbers in the aftermath of the attacks and eyeing expenses that can be eliminated in the coming weeks and months, including marketing costs, capital expenditures and personnel.

 

“You have to deal with it right away,” he said, requesting anonymity.

 

“Any time you interrupt a tourist-based economy it’s going to have an effect,” said Danny Thompson, the executive secretary and treasurer of the Nevada AFL-CIO.

 

The TV images of passenger jets slamming into the twin towers are expected to take a toll on traveler confidence for an unknown period of time, especially as federal officials try to tighten the nation’s air security system.

 

Convention authority researcher Kevin Bagger warns that to estimate the financial effect of the week’s events is impossible.

 

“There’s nothing comparable to what’s going on right now,” Bagger said. “The only thing we could come up with before was the Gulf War, and that was a war in a foreign land.”

 

Signs already point to trouble for Las Vegas’ tourism industry.

 

With the dramatic decline in hotel occupancy rates, the city’s $4 billion convention industry is threatened.

 

The International Vision Expo West was forced to cancel this week’s scheduled gathering for 18,000 people, a trend that could multiply in the coming weeks as more people opt to avoid all but the most essential air travel.

 

Other signs of trouble for airlines-dependent Las Vegas were apparent throughout the weekend.

 

Three of the nation’s largest airlines — Continental, Northwest and American Airlines — announced they were reducing their flight schedules by 20 percent. Continental had cut 12,000 jobs, or about one-fifth of its work force, after last week’s systemwide shutdown. No details were available about the number of flights to Las Vegas that will be cut.

 

Meantime, Las Vegas-based National Airlines, which has been operating under Chapter 11 bankruptcy protection, announced Sunday that it will lay off 300 workers and is cutting its flight schedule by 20 percent.

 

Airlines industry observers have speculated that the nearly 2 1/2-year-old National could go the way of North Carolina-based Midway Airlines, which shut down Wednesday and laid off 1,700 employees.

 

It’s difficult to place a value on Las Vegas’ chief product: good times. It’s about escape, excitement, entertainment, the sort of relief the film industry provided during the Depression.

 

Those things don’t feed the hungry, replace a missing father or spouse, but they can be a much-needed release, and no one’s quite certain what value a worried world will place on that product.

 

“Anyone who would guess would be speculating,” MGM Mirage Chairman Terry Lanni said of Las Vegas’ near-term travel prospects.

 

Mandalay Resort Group President Glenn Schaeffer and Harrah’s Entertainment Senior Vice President Jan Jones bristled at inquiries about their industry’s short-term financial outlook.

 

Jones characterized such questions as “coldhearted.” Schaeffer, who serves as Mandalay’s chief financial officer, abruptly said, “I’m not going to speculate on the impact of a national tragedy.”

 

Venetian owner Sheldon Adelson and his top executive, Bill Weidner, declined to return a phone message seeking comment.

 

But MGM Mirage’s Lanni said he thinks the attacks will harm the Las Vegas economy at least temporarily.

 

“I think for a period of time people will be more afraid to fly,” Lanni said. “We know there will be an effect, but we have no comparative history on which to make a judgment.”

 

To Navarro, Las Vegas will be transformed temporarily into a regional rather than an international destination, with the bulk of the visitors coming from California, Arizona and other nearby states.

 

Southern California provides slightly less than a third of the city’s tourists.

 

“This would be a heavy hit,” Navarro said.

 

What about the Las Vegas job scene?

 

The economist offered two scenarios for casino bosses to adopt.

 

One would see them slash their work force to recover lost profits. The other would have them sacrifice profit margins to guarantee that the regional and national economies remain relatively strong, as employed Las Vegans continue to buy goods and services.

 

“That would be a good corporate strategy consistent with the dedication we have to have right now,” he said. “It’s going to be a time of sacrifice.