A good attitude makes a difference. And in the case of the casino business, consumer confidence can overcome a lot of problems.
That said, we can count on Station Casinos remaining very bullish on Las Vegas. "The Las Vegas locals franchise is one of the most vibrant in the U.S.," says CFO Glenn Christensen, who added that the company expects fourth quarter revenues to grow 10-12 percent compared to the same period last year. There is no significant debt due until September 2007.
Christensen also points out that the company controls close to 250 acres of real estate at five locations, which can be used for future development. "We think there is substantial value in our land portfolio that does not always get recognized by investors," he said.
Not even factors such as escalating gas prices can dampen Station’s optimism.
"You might have assumed that gas prices would have impacted us," said a Station executive, "and perhaps they do, but the current strength of the market could be masking whatever downside might have been created."
Boyd seconds the motion
Boyd Gaming executives could not be happier with the impact of Coast Casinos on Boyd revenues during the third quarter. Revenue and cash flow at the Coast properties climbed 9 percent and 21 percent, respectively, during the third quarter, compared to the same year earlier period before Coast was acquired by Boyd.
And as Boyd begins its serious look at how to best develop the 60 acres that are part of the Stardust complex on the Strip, the nearly half-century-old hotel and casino is headed for its "best EBITDA in years."
Boyd President Don Snyder says of the Stardust construction, "We have the luxury to take our time and do this right."
Last week, Harrah’s announced a radically-altered World Series of Poker schedule, which will be played at the Rio instead of the Horseshoe in 2005.
And, while televised poker continues looking like a very good bet for Harrah’s (cable TV ratings are surpassed only by NASCAR and NFL football), CEO Gary Loveman could make an announcement by the end of the year about a major corporate sponsor to be involved with the World Series and Harrah’s. Stay tuned.
”˜Marina tower’ to get needed facelift
The old Marina hotel tower is finally getting serious attention more than a decade after the MGM Grand was built around it. For those who weren’t here 12 years ago, the Marina stood on the site of the MGM Grand and, while most of it was razed, the hotel tower was kept and the MGM Grand was built around it.
Those 690 Marina rooms are contained in what has been known as MGM’s Emerald Tower. The wing has been largely used to service the tour and travel business that pays less for guest rooms.
Since it was built, the Emerald rooms have not been upgraded, even as the Grand has lavished hundreds of millions on almost every other section of the hotel.
This will change, thanks to a total new look that MGM Resorts President John Redmond says will yield higher rates and customers inclined to spend more throughout the property.
Peter paying Paul?
MGM Mirage Chairman Terry Lanni says recent gains in the company’s Las Vegas business continue to be driven by capital investments that have increased non-gaming revenue — spending at restaurants, shops and clubs created within the MGM Mirage string of resorts.
"More and more spending takes place at our clubs and restaurants," Lanni says.
Curiously, the other big winner in recent months has been the slot club that benefits from the companywide commitment to ticket-in, ticket out technology, which makes it easier to earn and redeem points outside of the casino.
Companywide slot revenues were up 9 percent during the third quarter. The expectation is that "slot volumes will continue to grow rapidly," and presumably fuel the redemption of slot points for meals, shopping and entertainment.
It’s nice to see a vicious cycle that pays dividends.
Just say no to union
A Las Vegas newspaper quoted "sources" as saying Harrah’s and Caesars will probably not give in to union demands for a three-year contract. There was no reason to rely on "sources," which is a lazy way of reporting.
Gary Loveman and Caesars Entertainment President Wally Barr have both said flat out that there is no way they will give in to union demands for a three-year deal. Loveman says, "We have agreed to all demands (including an 11 percent increase in wages over five years). Harrah’s will not concede on the issue of contract length."
Caesars’ Barr agrees: "The principal issue is the length of the contract. We need a five-year deal. We have no anticipation of settling without a five-year agreement."