The Las Vegas Strip corridor continues a slow but steady recovery, working its way toward that moment when the booming business of pre-recession days may be within reach again.
Where’s the proof? Look no further than the numbers posted by major resort companies as they have reported fourth quarter performances and their top executives peered further into prospects for the remainder of 2014.
MGM is the most recent company to go public with its optimism. The company is a good yardstick for assessing vital signs since MGM operates 10 resorts along the several miles between Mandalay Bay on the south and Circus Circus on the north.
They are hotels and casinos serving all price points, from cost conscious, bargain-oriented travelers to those who can afford to pay for the best.
Sheldon Adelson prefers to spend most of his time in conversations with industry followers talking about the continuing ability of Las Vegas Sands resorts in Macau and Singapore to generate breath-taking numbers.
The performance of the Palazzo-Venetian complex on the Strip does not get a lot of attention, but the LVS CEO noted during a recent chat with analysts that the convention and meetings business has been continuing its return to life as it used to be.
The rates these groups can be charged have been increasing. Conventions are currently the best of the markets served by the Venetian and Palazzo in Las Vegas, he said.
Steve Wynn sees good prospects for the remainder of this year. “I think 2014 will be fine. We’re seeing upticks in occupancy and room rates,” factors that lead to improved consumer spending throughout the Wynn and Encore complex.
“It’s not booming because nothing that has come out of Washington has done anything but cost us more money,” Wynn added. “We’re feeling the impact of Obamacare and that has forced us to make some adjustments.”
But the quality of life for Strip companies continues its definite movement in the right direction. Let’s see now what Caesars CEO Gary Loveman has to say on the subject during the next week or so.
MGM CEO Jim Murren last week turned on a cheerful tone, talking about the good news as he sees it. A year ago he was describing 2013 as a “new era” for MGM, what with millions in capital spending having been committed to new and updated amenities or features at its line of Vegas properties.
Looking at 2013’s last three months, he notes, “We closed the year with a very solid fourth quarter.” Revenues and ebitda were up 7 and 18 percent, respectively. Big increases in food and beverage revenue were attributable to the rebounding meetings and convention business.
Murren gives new marketing programs a lot of credit for the improved performances. The customer loyalty program known as M Life “has fulfilled all goals.” There’s a steady addition of names to the database fueling an outreach program based on Internet capabilities that is calculated to turn occasional MGM visitors into MGM regulars.
“Marketing partners,” Murren said, “are driving tens of thousands of room nights each quarter.” These partners are non-gaming businesses where customers can earn/spend M Life points.
MGM, like Caesars, also continues to embrace the promises of social gaming in a big way. The company’s My Vegas game recently hit number one in the iTunes app store and more than 80,000 of those signing on to the My Vegas website visited one of the MGM properties during 2013.
As for the future, MGM continues moving forward on the construction of its second Macau casino, a project in Maryland and the promises that keep company officials busy romancing forces in Massachusetts and Japan.
Murren said the MGM team “has been warmly received by the business community and the public and we believe our prospects are as good as anyone who has shown an interest in Japan.”
The development work being conducted miles from Las Vegas by major Nevada-based companies will eventually bring new business to Nevada.
The process is something like a petroleum pipeline in Canada bringing oil thousands of miles to refineries along the Texas Gulf coast where jobs are created and local taxes paid as a result of the process that turns oil into a variety of consumer products.
Casino companies know many of their best foreign customers will become Las Vegas visitors as Las Vegas’ critical mass of attractions generate appeal reaching around the world.
Phil Hevener has been writing about the Nevada gaming business for more than 30 years. He can be reached at [email protected].