Saturday, March 6, 2010

The State of Vegas

Over the next few days I want to talk about the huge amount of news over the past month or two that is slowly shaping the face of post-meltdown Las Vegas. There has been change all over the place, some of it negative and some of it positive. In no apparent order, here's a look at some of the recent developments...


Shuttered Hotel Rooms

There has been a rash of room closures around town and this is certainly isn't a good sign. Late last year, the legendary Binion's Casino downtown completely closed it's hotel tower along with the coffee shop and the Sahara close 2 of its 3 towers due to lack of demand. (A positive note: the Sahara buffet was also closed!) Closing down rooms has to be troubling news... From people I know in the hotel business, I have heard the ballpark number is about $12 a day to run a room for a mid-sized hotel. If they can't get the rate and occupancy levels to support more than $12 a day, things are looking pretty bleak downtown and the north Strip.

Shuttered Joints!

From closed rooms to entire places going away! In the next month, 2 of 3 reasons for the existence of the Lake Las Vegas Resort will close their doors. The 5-Star Ritz-Carlton and the adjacent Casino Montelago will be done. The only thing left out there will be the Loew's Hotel which itself is in bankruptcy. The parent corporation of the entire place is broke and the lake itself in constant danger of draining away to Lake Mead. I pity the homeowners who are left. It was a really nice place but WAY too far off the beaten path to really ever succeed even during good times and the first place to completely die in the new Las Vegas.

Boyd to take out Station

In a move that is pure genius from the shareholders of Boyd Gaming's perspective and an absolute disaster from just about every other, Boyd is agressively trying to buy Station Casinos as a whole out of Bankruptcy Court. Boyd is flush with cash after abandoning the rotting skeleton that is Project Echelon on the site of the former Stardust. So it has now set its sights on its main competitor in the Vegas locals market, Station, after its ill-fated leveraged buyout. If the power play is successful, one company would control virtually every major casino in the Vegas Valley not located on the strip or downtown and would be a major blow to anyone who plays or stays off-strip. Don't get me wrong, I am a full-fledged capitalist in every sense of the word and completely support the strong eating the weak but the casino business in Nevada is regulated for a reason and this is where the Gaming Commission needs to do their job for the good of the overall industry in the state. This mega-merger would not be in that best interest. Perhaps a partial purchase of a select number of properties but to allow a complete domination by Boyd would not be good for the locals market in Vegas.

More tomorrow on the fates of Fountainebleu and Planet Hollywood and what I think it all means for the future of Las Vegas.


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