2009 is history

…at least as far as the LVCVA is concerned. The December and year-end visitor numbers, minus the gaming figures for now, was just released. Here are some highlights from the executive summary:

December: Visitor volume up 1.5%, room inventory up 6% compared to December 2008.
2009 (total): Visitor volume down 3%, room inventory up 6% compared to calendar 2009
Average Daily Rate (ADR) was down a whopping 22% for the year, but only 5.8% in December
Both the number of conventions held (19,394) and the number of attendees (4,492,275) were down substantially for the year (13.6% and 23.9% respectively)
Air passengers deplaned declined by 8.2%, traffic on all highway was up by 2.5%, and on I-15 by 4%
2009 LAS VEGAS YEAR-TO-DATE EXECUTIVE SUMMARY

First, the good news. The drop in ADR was less than double-digits for the first time all year. Considering that March and April saw drops of more than 30%, losing less than 6% in room rates with a jump in occupancy in December was actually good news. Convention travel showed a year-over-year increase in December, the first increase all year. I don’t know if this classifies as “green shoots,” but it’s definitely better than a straight year of annual declines.

Now, the so-so news. Visitor volume was down 3 percent, which is actually better than the 2008 decline of 4%. There seems to be some correlation between the falling ADR and the rising visitor volume, meaning that cutting prices on rooms helped to lure more people to town–no surprises there. With the number of air passengers falling, casinos clearly need to ramp up their outreach to Southern California and encourage people to make the drive up I-15.

But wait–there is also some bad news. Visitor volume fell by 3 percent for the year. Room inventory increased by 6 percent. It doesn’t take an economist to realize that there’s still an imbalance between supply and demand that does not bode well for the future. The increase in visitor volume for December–despite a highly-hyped casino opening–was less than the increases in the previous three months. Since September, the monthly gain has decreased steadily. In December, at least, it doesn’t seem like the new supply brought enough visitors to Las Vegas to compensate for the increase in capacity.

There is still hope, though. When the gaming numbers come out, we’ll get a better idea of whether the people who came to town in December gambled more than they did in 2008. That was the case in November, but the 6.9% bump in revenue for that month was largely driven by high-end baccarat play, as the slot play actually fell by a billion dollars, an indicator that people for the most part are gambling less. If high-end play increases, then a jump in gaming revenue can compensate for the lower occupancy rates, at least for the short term.

But the larger trend–less air traffic, more auto traffic–seems to run counter to the high-end strategy. We’ve got a confusing year ahead of us, that’s for sure.

Author: Dave

Director of the Center for Gaming Research at the University of Nevada, Las Vegas and author of several books, including Roll the Bones: The History of Gaming. Also Gaming and Hospitality editor for Vegas Seven magazine.

10 thoughts on “2009 is history”

  1. Those 2009 (PDF) stats provide lots of good information. I wish I had graphing software to better make a point. But, it seems that the months from Feb-July provide a consistent flow of visitors and room use. Over 3 million people per month visited LV from February thru October.

    IMO…as long as visitors are still arriving the amount they spend isn’t as important enough to worry about. At least they are still arriving and spending. In time their gaming expenditures will pick up IMO.

    Casinos should be able to contend with the slight drop-offs of gaming profits. The best news is that city attendance hasn’t dropped by 25% during this worst recession of the last 30+ years.

    Eight months ago Sheldon Addelson provided his ‘words of wisdom’ on the subject of tourism in LV. He said “How you going to keep them down on the farm after they’ve seen Paree?”

    It seems to be true that once people have seen Paree-Vegas they always return. Thankfully that now seems to be a ‘natural-law’ as reliable as the migration of moose, ducks, swallows and geese.

    I liked reading that 1956 news article about the mini-recession in Las Vegas partly caused by the glut of new casinos.

    Although the ‘Stardust’ went bankrupt in 1957, it opened in 1958 and stayed open for decades after.

    The 1955 ‘Royal Nevada’ shut-down after about two years…went bankrupt…but still opened again (in 1957) and drew tourists. Even though it didn’t stay open long (the 2nd time around) its building was taken over by the Stardust and had a super-long life and provided lots of ‘convention use’ (in its former casino space)…restaurants…motel wing use and a historic 50 year pool, largely frequented by the high-rolling men and lots of beautiful showgirls.

    [sidenote] I read a news circa 1956 news article about a weekly TV series called ‘Fabulous Las Vegas’ being aired from the Royal Nevada pool area. 60 mile-an-hour winds prevented its premiere airing…but the next week things were back on track.

    The 1956 mini-recession caused the casino operators to learn to work more efficiently. Advertising and publicity was increased to keep Las Vegas in people’s minds and on their tongues. Sands opened (expanded) a late-night cocktail lounge and learned to get more visitors without more of their ‘entertainment budget’ on higher priced headliner acts. It seems they even realized the need to offer good-giveaways by giving away 50,000 Silver Dollars on New Year’s Eve. One can imagine how that $50 K giveaway likely bought the Sands a million in great publicity.

    Las Vegas sure isn’t dead. The stats prove that.

    On Superbowl Sunday a friend took me to the Gold Coast because she received a $26 room-special in the mail (week-ends $44). The Gold Cost rooms are really nice and seem to have been recently remodeled with big TVs and very modern furniture and cabinetry.

    The place stayed crowded even until 7am. Local Asian gamblers filled most all the tables.

    Smart casino operators shouldn’t fear the tail-end of this recession. I (IMHO) think Las Vegas will bounce back better than ever with some important lessons learned and with “efficiency & service” being the best survival words they ever seriously took into account.

    If I was an investor I’d be ‘getting into’ Vegas enterprise most anyway I could. Another boom might soon be happening here in “Paree Vegas”.

    In My Now Unhumble Opinion.

  2. Those 2009 (PDF) stats provide lots of good information. I wish I had graphing software to better make a point. But, it seems that the months from Feb-July provide a consistent flow of visitors and room use. Over 3 million people per month visited LV from February thru October.

    IMO…as long as visitors are still arriving the amount they spend isn’t important enough to worry about. At least they are still arriving and spending. In time their gaming expenditures will pick up IMO.

    Casinos should be able to contend with the slight drop-offs of gaming profits. The best news is that city attendance hasn’t dropped by 25% during this worst recession of the last 30+ years.

    Eight months ago Sheldon Addelson provided his ‘words of wisdom’ on the subject of tourism in LV. He said “How you going to keep them down on the farm after they’ve seen Paree?”

    It seems to be true that once people have seen Paree-Vegas they always return. Thankfully that now seems to be a ‘natural-law’ as reliable as the migration of moose, ducks, swallows and geese.

    I liked reading that 1956 news article about the mini-recession in Las Vegas partly caused by the glut of new casinos.

    Although the ‘Stardust’ went bankrupt in 1957, it opened in 1958 and stayed open for decades after.

    The 1955 ‘Royal Nevada’ shut-down after about two years…went bankrupt…but still opened again (in 1957) and drew tourists. Even though it didn’t stay open long (the 2nd time around) its building was taken over by the Stardust and had a super-long life and provided lots of ‘convention use’ (in its former casino space)…restaurants…motel wing use and a historic 50 year pool, largely frequented by the high-rolling men and lots of beautiful showgirls.

    [sidenote] I read a news circa 1956 news article about a weekly TV series called ‘Fabulous Las Vegas’ being aired from the Royal Nevada pool area. 60 mile-an-hour winds prevented its premiere airing…but the next week things were back on track.

    The 1956 mini-recession caused the casino operators to learn to work more efficiently. Advertising and publicity was increased to keep Las Vegas in people’s minds and on their tongues. Sands opened (expanded) a late-night cocktail lounge and learned to get more visitors without more of their ‘entertainment budget’ on higher priced headliner acts. It seems they even realized the need to offer good-giveaways by giving away 50,000 Silver Dollars on New Year’s Eve. One can imagine how that $50 K giveaway likely bought the Sands a million in great publicity.

    Las Vegas sure isn’t dead. The stats prove that.

    On Superbowl Sunday a friend took me to the Gold Coast because she received a $26 room-special in the mail (week-ends $44). The Gold Cost rooms are really nice and seem to have been recently remodeled with big TVs and very modern furniture and cabinetry.

    The place stayed crowded even until 7am. Local Asian gamblers filled most all the tables.

    Smart casino operators shouldn’t fear the tail-end of this recession. I (IMHO) think Las Vegas will bounce back better than ever with some important lessons learned and with “efficiency & service” being the best survival words they ever seriously took into account.

    If I was an investor I’d be ‘getting into’ Vegas enterprise most anyway I could. Another boom might soon be happening here in “Paree Vegas”.

    In My Now Unhumble Opinion.

  3. Hopefully with the recent opening of City Center and an improving economy 2010 will be a better year in Las Vegas. Hopefully the airlines will increase flights to Las Vegas to get more tourists out there. At least Carl Icahn bought the Fontainebleau, he is one of the smartest billionaires out there and he usually makes money in almost all of his investments.

  4. I’ve looked at these 2009 stats many times over the last 24 hours. There is a lot of important data here that LV casino operators should be trying to utilize by spotting patterns, variations as places to do even better. These stats provide much more info than simply telling how “up” or “down” things are.

    There are lots of stats that could be used to provide info on the best time to use advertising (and to what audience) and when to use promos, etc.

    Someone who is actually in the industry should be graphing the patterns of mid-week room occupancy and weekend occupancy. There is a big “staring you in the face” patterning that is highly relevant and could easily be acted upon. If I was able to keep two browser open at the same time (on my computer) I could discuss in better (but that’s not my job anyway).

    All I wrote to say is that this stats shouldn’t merely be passively used (by casino operators) to say “Well gosh. Things slowed down a little, didn’t they”.

    Are you kidding me?! These stats could be actively and aggresively used to get Vegas back on its feet better than ever. Casino operators should be viewing these stats like medical EKG and MRI reports on a living person and not like a static autopsy. Simple, minor actions are needed for the patient (LV tourism) to fully recover. It’s glaringly obvious (to a ‘patterning’ freak like me).

    If the guys in charge of advertising and marketing aren’t studying these stats like a Mo-Fo…(for the next 200 hours) they are idiots.

    I’m coming to the realization that casino-operators have their heads buried in the sand (or desert dirt, in LVs case). People like Loveman get accolades for their thoughts on dog-racing and the like?

    Give me a break. There is no genius-thinking going on in the industry. DGS is one of the few people doing any good thinking in this town.

    Hey casino operators. The U. S. Department of Defense rated me as a genius in ‘geometric patterning analysis’ back in 1988 but I refused to work for dullards. The same goes for you.

    But go find yourself a whiz-kid (from Google or somewhere) and have him analyze these stats…and show you what you aren’t even seeing. Your standing too close to the trees to see the forest.

    INUO

  5. Of course… this time, it is directed toward the San Luiseno Band of Mission Indians….

    There would be no predictive power behind library check-out rates anyway, just a weak (inverse) correlation with the general health of the economy. No indication of future trends.

    Recommended reading: THE NIXONS: A FAMILY PORTRAIT, by Ed Nixon and Karen Olson! Fairly quick read and quite inspiring. Oh bygone Yorba Linda days!

  6. Oh! Of course! The San Luis Obispo Mission Indians! I should have known…but that one went right over my head. I suppose they own an Indian casino or something. Please excuse me for not being able to read your MIND as I was reading your comment. I suppose that could be a ‘hot-topic’ news story in SOME part of the world.

    I still don’t have a newspaper or a TV (I HULU instead) so that went right over my head.

    As for Tricky Dick. You might think I wouldn’t like the man, simply because his regime drafted me just 3 months out of high-school and basically ruined my life. But no. I completely understand his Capricornish mind…the same way I understand (Cappy) Howard Hughes’ various disfunctionalities. After all…me and Howie were both born on Christmas Eve.

    And contrary to popular belief…old Howard never turned a profit from any of his ventures (just like me). And if you ever want to know why Frank Sinatra nearly went crazy from his relationship with Ava Gardner (another December 24 born cusper)…it would serve you well to understand that a Fire Sign (like Frank) should never date a ‘Fire & Earth’ cusper.

    Earth will smother the fire and fire just scorches the earth (in relationships that are too close). It’s a bad-marriage-combo all-in-all.

    Which sort of explains why Frank’s best friends were either Fire signs (like Sammy Davis & Sam Giancana) or AIR SIGNS (like Dino, JFK, Monroe, Joey Bishop, first wife Nancy, favorite daughter Nancy, 2nd wife Mia Farrow, third wife Barbara Marx, girlfriend Juila Prowse, good lady-friend Judy Garland, other girlfriend Angie Dickinson, Lucky Luciano, Steve Wynn, Ron Reagan, etc.). It just goes to show how much those Fire signs can naturally relate best with the Air Signs (don’t it?). Fire and Air have natural affinities..and ‘like attracts like’.

    Sure, Frank was great friends with December 25th born Humphrey Bogart (the original Rat Packer)…but that was simply ‘a variance’ based on recognizable Fire Sign similarities that become admirable when combined with the Earth Sign stability of the Fire & Earth Cuspers (Bogie and Ava). It’s okay to admire someone’s astro-characteristics…but wasn’t wise for Frankie to try to marry Ava (or Bogie’s wife either). Not wise at all.

    But I digress.

    Now back to Mr. Tricky. If you ever want to see a case study of the negative sides of Capricorn nature…just do some research on Mr. Dick. He was a master of comebacks (like Cap-Elvis) and an expert in falls from grace. Saturnalia plays some stange reversals on the poor old Capricorn goats. Luckily for Poor Richard he had a compatible family with a Water Sign wife and two Water Sign daughters, Juie and Tricia.

    Not too surprisingly Nixie also surrounded himself with compatable Water Signs in the personages of Haldeman, Erlichman, Magruder, Gordon Liddy, Hugh Sloan, Rogers, Spiro Agnew, David Kennedy, John Connaly, Elliot Richardson, George Romney, close friends John Foster Dulles, Rev. Billy Grahm, David Eisenhower and even China’s Zhou Enlai.

    And luckily enough Nixon used two Capricorns…his secretary Rose Mary Woods & Mao Tse-tung (BOTH born on December 26, by the way) to make his visit to China a successful one.

    Yes. King Richard was quite a man. Foibles and all. It’s no surprise to me that Hunter Thompson was fascinated, repulsed and admiring (often at the same time) of Nixon.

    HST was a Water & Fire Sign Cusper (which carries the built-in burden of having a spirit and nature similar to boiling water). Which is why I sometimes feel the same way about HST as he felt about Nixon. Fascination, admiration and repulsion by some of the character traits he was dealt.
    ———–
    Yes Schopie. I first missed the meaning of what you said. After this comment…I’m sure the feeling will be mutual.

  7. Yes Schopie,

    If you think my ‘patterning’ of people’s basic astro-compatibility is strange, insightful or just plain crazy…you should see how I’ve analyzed the patterns of members of rock bands, celebrity marriages and even TV sitcom casts.

    I won’t even get myself started on discussing the unique compatability of Andy, Barney Fife, Aunt Bee, Gomer, Goober, Floyd and all the rest. Nor will I talk about compatible astro-make-up of the casts of ‘I Love Lucy’, ‘Mary Tyler Moore’, ‘Gunsmoke’, ‘Goodfellas’, ‘Casino’, or a hundred other successful groupings of people.

    Neither will I discuss my weird astro-analysis of the presidential matings of Obama & Michelle, Bill & Hillary, Ike& Mamie, Abe & Mary Todd…..and even Adoph & Eva Braun…Brad & Angelina, Sonny & Cher, Donald & Ivana, Steve & Elaine, Bugsy & Virginia Hill, Spencer & Hepburn, Liz & Burton…or famous couplings and partnerships like Martin & Lewis, Ben & Jerry…and a zillion others.

    This ‘search for astro-patternings’ may seem to be a weird obsession. Some might call it an OCD. I don’t. I call it research. Something only only The Rainman might understand.

    :>))

    PS: The Beatles had a very unique grouping of Water & Air signs. Water & Air often make an effervescent combination, much like the bubbles in champagne. Occasionally the fizz goes flat though.

    Good Night Schopie

Comments are closed.