Nongaming Revenue Las Vegas vs. Atlantic City

It shouldn’t be a surprise that Las Vegas earns more than Atlantic City on things other than gambling.  However, it’s a little shocking – not surprising – to see how much Las Vegas’ percentage of revenue comes from sources outside of gambling versus Atlantic City.

…But Atlantic City still has a long way to go before it can reach Las Vegas’ level, where about 60 percent of revenue comes from nongaming ventures, said Cory Morowitz, of Morowitz Gaming Advisors LLC, in Galloway Township.

Last year, nongaming revenue in Atlantic City was probably less than 10 percent after discounting comped goods, Morowitz said.

“I don’t think we can get to 60 percent,” he added. “We just don’t have the room size that Las Vegas has. Rooms are the biggest driver.”

As I mentioned there’s no surprise that the nongaming revenues are greater in Las Vegas than Atlantic City.  Las Vegas has put a lot of effort into creating those revenue streams for better or worse.

Borgata was the first casino to really put effort into creating nongaming revenues and Harrah’s Resort and Tropicana have followed suit by enhancing their club experiences.  Bally’s is starting down that road by renovating their properties (Claridge and Wild Wild West) and Harrah’s is considering rebranding Showboat.

These are all good steps to separating Atlantic City from the rest of the East Coast casinos that have been popping up over the past few years.

In addition to expanding their club scene I think (actually, I know) that better restaurants and more shows need to follow to grow this revenue stream and separate Atlantic City from the rest of the casinos.

Gwen Stefani - No Doubt - Borgata

Photo: Flickr: woundsarebleeding

Wynn Adds $20 Resort Fee

Wynn added a $20 resort fee to their standard room rates.  By way of these resort fees Wynn Las Vegas has, in essence,  raised standard room rates by about 10% based on a check of rates on their website. Props to Vegas Tripping for being the first place where I saw the information.

Here is the official statement from Wynn Resorts:

In an ongoing effort to enhance our guests’ resort experience, Wynn Las Vegas and Encore has implemented a $20 resort fee to all resort room reservations. Responding directly to extensive customer feedback, the resort fee will offer value to customers with a bundling of the most sought-after amenities. Effective June 10, 2010, the mandatory resort fee will be applied to all resort rooms. The daily fee will provide guests with the following amenities during their stay:

Complimentary access to the fitness center (a value of $30 per person/per day)

Complimentary in-room Internet access (value of $13.99 per day)

Complimentary local, domestic long distance and toll free calls

Complimentary printing of boarding passes

Ultimately, if people are willing to pay resort fees than hotels will charge them.  That’s how supply and demand works.  It’s interesting to see that hotels are raising resort fees, but not room fees.  I have to think this is probably because they keep 100% of the resort fee, while travel agents and booking sites (orbitz, etc) take a percentage of room fees.

I’m sure that Wynn Las Vegas thought long and hard about adding the $20 per night resort fee while the market is over-saturated with rooms.  However, most rooms available aren’t on par with Wynn Las Vegas.  From what I’ve read this doesn’t seem to be scaring most in the “luxury” travel market.  In a good economy rooms at Wynn would be more money anyway.

This doesn’t encourage me to stay at Wynn but I’ll never say never.  As always when I travel I’ll do price comparisons for where I want to stay.  Hopefully, all resort fees will be disclosed when I look next so I don’t have to strain to do the math. I don’t want to have to deal with fighting non-disclosure.

I’ll share my new room rate math next week.  One word – OBNOXIOUS.

First Quarter Casino Earnings

I tend to keep away from corporate casino hotel earnings, but I’ve noticed that there have been a lot of incoming searches for this so I figured that I would round up a bunch of information for those looking.

  • Golden Nugget Reports Increase In Revenue. LV Sun
  • Las Vegas Sands Narrows Loss In First Quarter.  LV Sun
  • Tropicana Reports Loss; Cites Las Vegas “Room Inventory Imbalance”. LV Sun
  • Harrah’s Reports a Loss as Recession Takes Toll. LV Sun
  • CityCenter Pushes MGM Mirage to First Quarter Loss. LV Sun
  • Boyd Gaming Returns To Profit, Notes Improving Economy. LV Sun
  • Wynn Resorts Sees Profit in First Quarter. LV Sun
  • Hard Rock Hotel Reports First Quarter Loss of $26.5 Million. LV Sun
  • Station Casinos Reports Revenue Drop in Fourth Quarter of 09. LV Sun

Each article has is accompanied with commentary.  Check Two Way Hard Three‘s thread for non-local comments.  Non-locals always have a different point of view.

Wynn Moving To Macau?

Steve Wynn says in an interview with MSNBC that he’s considering moving Wynn headquarters to Macau.

Obviously, he’s trying to butter up the market but that likely won’t ever happen.  Especially as gaming revenue growth in Macau has probably already peaked in popularity.  Gotta love corporate speak.

On another note, his attitude towards creating beautiful and quality hotels is fantastic.  I love the line “I don’t think bigger is better.  I think better is better.”  I’d rather focus on that attitude than the corporate gibberish.

Cosmopolitan Of Las Vegas Sets Opening Date

Cosmopolitan of Las Vegas (Cosmo) set an official opening date for December of 2010.  Kinda.

The CEO of the new $3.9 billion Cosmopolitan of Las Vegas casino says it will open in mid-December with about one-third of its rooms delayed until July 2011.

The Cosmo will open in December, but will keep some of its rooms closed.  CityCenter properties opened similarly.  All of this room capacity that goes unfilled should keep prices in check for a while.  So, Cosmo, thank you for opening.

You may be familiar with the Cosmo, but not aware that it exists.  It’s nestled between CityCenter and Bellagio and surrounding the Jockey Club. You can see the location on the awesome Vegas Today and Tomorrow map.

Because of location and look it can easily be confused for part of CityCenter.  The Cosmo website has very little information, but everything I’ve read makes it seem as if it will have an urban south beach feel to it with multiple restaurants, clubs, etc. with a fancy beach club in the air between both towers of the hotel.

I walked by the Cosmo on the way to CityCenter in December and it looked like it was almost ready to open.  I’ll check it out.  With it’s proximity to the strip, hopefully it will be inviting to me.

Riviera!

I’ve never been inside the Riviera on the Las Vegas strip and thus don’t write about it.  The Riviera is one of the oldies on the strip and even though everything I’ve read or heard is pretty bad I figured I’d share some news.

The Riviera seems to be prepping for bankruptcy.

Riviera Holdings Corp. of Las Vegas reiterated Friday that it’s in talks with creditors about restructuring its debt – but continued to avoid comment on whether Starwood Capital Group LLC is preparing to take over Riviera through a prepackaged bankruptcy.

This comes as no surprise to me as an old property on the north end of the strip doesn’t seem to have much shine.  I’m curious to see what happens to the property in the future.  The facade is still very recognizable, but that probably won’t save it.

Saints Make Vegas Casinos Winners

So the Saints won the Super Bowl this week.  I won my prop bet on Peyton Manning throwing a first quarter touchdown, but lost my bet on the Colts.  I had a winning day since I also had the under on Celtics vs. Magic.

The legal sportsbooks in Las Vegas made more money than they did last year.  Upsets will do that.  The casinos usually win, but upsets can hurt.  Not this time.  From Pro Football Talk:

The Nevada Gaming Control Board said Tuesday that casinos in the state turned a profit of nearly $7 million on the $82.7 million bettors wagered on the Super Bowl.

Overall, bettors in Nevada placed about $1.21 million more in bets than they did on last year’s Super Bowl, and the casinos’ profits were about $179,000 more than last year.

The house usually wins in Las Vegas, although some years the Super Bowl is actually a money loser for casinos. In 2008, according to the state board, Nevada casinos lost almost $2.6 million when the Giants upset the Patriots.

I read the headline a few times, but wasn’t sure if this was good or bad for the casinos.  Low and behold it was good.  The NFL draft is up next for those, like me, that always hunger football.

Fontainebleau To Icahn

Carl Icahn is the winner for the bankrupt Fontainbleau in Las Vegas.

Carl Icahn is expected to take over ownership of the bankrupt Fontainebleau Las Vegas resort after two potential competitors vying to buy the property failed to submit qualifying bids as of a 5 p.m. deadline Friday.

First things first.  I hope Carl Icahn unbrands the Fontainebleau name.  Second, I’ve mused about Icahn moving the Tropicana name over to the Fontainebleau project.  With the Tropicana going with a south beach theme it may make sense to switch brands with hotels as Fontainbleau was originally a Miami hotel icon.

Photo: Las Vegas Sun

Harrahs Takes Over Planet Hollywood This Weekend

That was quick.  Harrah’s begins management of Planet Hollywood in Las Vegas at midnight January 16.

In an internal memo to employees today, Planet Hollywood owner Robert Earl said things would be “business as usual” during the transition, though Harrah’s executives from neighboring Bally’s and Paris resorts will assume key roles at the property.

Sure, I’ve had issues with deal happening but I can’t stop it so it’s time for me to look at how I can benefit from Harrah’s taking over one of my favorite casinos on the strip.

First, business as usual sounds good to me.  My main curiosity is how Total Rewards will work be worked into Planet Hollywood.  I play at the east coast Harrah’s properties pretty often.  It will be interesting to see how my future trips to Las Vegas are effected, if at all, by this.