Yes, it really is.
Executives with MGM Mirage and Las Vegas Sands have recently said their companies are booking more rooms in 2010 for convention groups on the heels of a record bad year for convention business. The convention business could return to pre-recession levels by the second half of 2010 or 2011, which would allow MGM Mirage to significantly boost room rates and company profits, the company said. [...]
Industry consultant Bill Lerner of Union Gaming Group has a similarly bullish outlook based on an expected 5 percent increase in visitors to Las Vegas atop a 4 percent increase in available hotel rooms — an estimate that assumes that certain rooms won’t be available for rent until later in the year. In that category he includes the under-construction Cosmopolitan and Vdara, a condo-hotel at CityCenter where buyers may be reluctant or unable to close escrow.
“You’re seeing stabilization in the business and that’s underscored by the end of meaningful declines in visitation, smaller declines in gaming revenue and hotel rate declines that aren’t worse than previous quarters,” Lerner said.
So is it still rough? Obviously, yes.
MGM Mirage’s Las Vegas properties were among the most highly occupied on the Strip in the third quarter, though at lower rates than some of their competitors at the high end. Overall, the company’s hotel occupancy was 95 percent, same as the year-ago quarter, but at rates that were $31 less, on average.
By comparison, Wynn and Encore combined were 84 percent full compared with 96 percent last year, and at rates that were $62 less, on average. Venetian and Palazzo combined were 88 percent full compared with 93 percent last year, and rates were $46 less, on average. It’s a sign of how far the Strip’s megaresorts have fallen since the boom years, when hotels abandoned the age-old strategy of practically giving away rooms to lure gamblers and embraced a new business model of companywide profit centers.
But is recovery nonetheless on the way? So far, it looks like it.
The third quarter contains two of the slowest business months of the year for Las Vegas, when the summer heat keeps visitors away and prices low. A smaller year-over-year decline in Strip gaming revenue in September than previous months, and a 5 percent increase in Las Vegas visitors in September, are positive signs that the bottom could be near.
As we've talked about before, there really is good reason to hope. While unemployment is still high and a number of other economic indicators have yet to turn around, it does look like the worst is over. After all, 2010 room bookings are so far looking better than 2008 and 2009. Convention business is really looking up. And with City Center opening, people will have new reason to come and see Las Vegas in all its new glory.
So don't worry too much. Hard times may not be gone yet, but they're starting to look a little easier. Hopefully with visitors coming back, Vegas will survive once again.