Las Vegas enjoys late summer bounce back

Bill Spain* Las Vegas bounced off the bottom at the end of summer as Nevada regulators released one of the most robust gambling revenue reports in years – with the help of high rollers and overall increased visitation levels. For Nevada as a whole, the casino industry took in revenue of US$945 million (MOP7.56 billion) from bettors in August, according to data from the Nevada Gaming Control Board, a gain of almost 12 percent. And on the Las Vegas Strip, which accounts for more than half the Silver State’s total – gambling revenue jumped an impressive 21 percent to US$544 million on brisk table volumes and stabilizing slot machine play. On the Strip, while there was decline in baccarat hold percentage, revenue from the game – popular with big money players – rose 47 percent on an 87 percent growth in the drop, or the total amount of money wagered. “Important in our view, is the strength in non-baccarat table play in both July and August, where revenue grew 8.0 percent and 12.9 percent, respectively,” said Carlo Santarelli, an analyst at Wachovia Securities. “August represents the third month in the last 24 months, and second month consecutively, that non-baccarat table revenue has grown. We think this, when coupled with slowing degradation of [the] slot handle, speaks well to the stabilizing domestic gaming patron theme.” Still, more than half of the markets in Nevada were down in the low-to-mid single digits – with Sparks off almost 10 percent and Laughlin down almost 5 percent – as the state suffers from the highest unemployment levels in the country and the ongoing impact of the real estate crash. Visitation to Las Vegas increased 3.5 percent in August, coming off an easy comparison of a 3.7 percent decline in the same month of 2009. Year-to-date, traffic is up 2.5 percent. Hotel occupancy in August hit 84.9 percent, down slightly, while weekend occupancy rose less than 1 percent to 89.2 percent. But the average daily room rate headed 4 percent higher to US$87.40 even in the face of a 5 percent increase in inventory thanks largely to MGM’s CityCenter property. The month marked the sixth consecutive increase in average room rates following two years of steady declines. Bill Lerner of Union Gaming estimated that the improved trends translated into a nearly 5 percent increase in revenue-per-available-room – a closely watched industry metric known as RevPAR. And, he noted, convention attendance was up a strong 46 percent from last year. With “generally increasing drive-in traffic, stabilization of passengers at McCarran [airport] and a positive outlook on convention attendance in the second half,” while “all signs are pointing towards some recovery on the Strip.” *GamblingCompliance/Macau Business