Las Vegas Struggling to Survive

Topics: Las Vegas Strip, Hotel, Gambling Pages: 4 (1103 words) Published: June 9, 2013
Las Vegas Casino industry is divided between the big headliners occupying the Strip and more local and smaller scale players fortressing the downtown area. So something hasn’t changed for decades. The significant change however is a gradual decline of gaming related activities- a phenomenon squarely underpinned by panelist John Acres & Howards Stutz during seminar on the final day of Cass business school Las Vegas study trip. John was vocal in identifying decay of gaming industry directly related to progressively “dying” population who likes to gamble and increasing propensity of younger generation to be indifferent if not averse to gambling. Five years after the global economic crash began, Nevada has still not recovered to pre-recession levels. From 2007 to 2012, the total statewide room inventory increased from 178,000 rooms to 195,000 rooms, but total visitor volume dropped by 5%, airport traffic declined by 13%, and both gross gaming revenue and the average daily rate per person dropped by more than 15%.1 Here's an excerpt from a new research note from Bank of America Merrill Lynch2: “Perhaps the most important dynamic overall on the demand front is the changing composition of total Las Vegas Strip revenues over the past decade. As we show in Chart below, historically, Las Vegas was a gaming-

centric market, with 61% of revenues coming from the casino category in 1990. Today, non-gaming revenue 1 2

comprises around 64% of Las Vegas’ total revenue mix as a result of the market evolving over the past ten years into a more complete tourist destination with hotel, entertainment, retail, and F&B/fine dining becoming increasingly important revenue drivers. The Strip now has 150K hotel rooms...
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