LAS VEGAS-Unadjusted for luck factors and calendar issues, according to the Nevada Gaming Control Board, May 2012 revenue was as follows: Las Vegas Strip gaming revenue was down 18.1% for the month and up 0.2% YTD. Table games revenue, excluding bacc/mini bacc, was down 18.8% for the month and down 3.9% YTD. Bacc/mini bacc revenue was down 45.3% for the month and up 0.3% YTD. Slot revenue was down 3.1% for the month and up 2.0% YTD.
According to a recently CBRE report, which analyzed the data, the firm looked into how wealth metrics impact spending on the Strip, and has concluded that it should generally place a greater emphasis on spending rather than visitation numbers.
“While visitation is an important metric, our research indicates that swings in real estate and stock market values have a greater affect on the direction of spending than visitation alone,” according to the report. “We’ve certainly seen anecdotal evidence of this trend, but we wanted to drill down a bit into gaming spend as it relates to visitation. Gaming has consistently declined as a portion of overall spending on the Strip over the past two decades, and the boom-bust cycle seems to have largely leveled out at this point, so we felt it was worth another look.”
The table below charts mass market Strip gaming revenue (excluding baccarat) per visitor on 12-month rolling averages. According to CBRE, you can see the effect of the real estate boom and subsequent recession, but since January 2010 in particular, gaming win per visitor has fluctuated very little.
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| This analysis indicates that mass market gaming budgets on the Strip have been fairly stable, and have more or less returned to a historical norm (albeit slightly above). While CBRE doesn’t have monthly data to smooth the trends out, the quick chart of gaming revenue and visitor trends from FY 1992 to FY 2011 shows that mass market win per visitor in FY 2010 and FY 2011 is fairly close to what it was from FY 1992 to FY 2003. |
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| ”If one assumes that wealth metrics are not going to change very much over the next couple years and gaming revenue per visitor will continue to exhibit stability, overall revenue growth on the Strip will have to come from increased visitation and/or other sources (rooms, entertainment, food and beverage, retail, etc.),” says CBRE. |
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| The addition of luxury hotel supply over the past 20 years has helped drive up the total revenue per visitor, and individual properties will of course experience different gaming win dynamics based on the number and types of visitors they attract within their market segment, says CBRE. “The economy (among other factors) will continue to influence what visitors spend overall when they are on the Strip, but barring any significant changes in wealth metrics gaming budgets in the aggregate look likely to remain within their current range. At the same time, the data indicates that the growing appetite for non-gaming amenities has not necessarily suppressed gaming budgets, but been accretive to overall spending.” |
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
