Las Vegas Real Estate
Stiffs & Georges
They burned the Monte Carlo ... and may get away with it
JohnTerez said: Try see it. , <a href="http://smart.fm/lists/152... glass supplies</a>... [More]
They burned the Monte Carlo ... and may get away with it
SoloJ3ss said: Great... , <a href="http://boxesandarrows.com... to make deer a... [More]
Enter your email address to subscribe to this blog.
alex yemenidjian ameristar animals architecture atlantic city australia baseball boulder strip boyd gaming california cannery casino resorts carl icahn charity cirque du soleil citycenter colony capital colorado columbia sussex cosmopolitan current detroit dining don barden donald trump downtown economy election encore entertainment environment florida fontainebleau g2e george maloof harrah's harry reid herbst gaming horseracing igt illinois indiana international internet gambling isle of capri james packer kansas kentucky labor lake tahoe laughlin lawrence ho louisiana lvcva m resort macau marketing massachusetts melco crown entertainment mesquite mgm mirage michael gaughan mississippi missouri monte carlo fire morgans hotel group movies neil bluhm ohio oscar goodman penn national pennsylvania pets phil ruffin pinnacle entertainment planet hollywood politics problem gambling regulation reno riviera sahara sheldon adelson singapore sports stanley ho station casinos steve wynn tamares group taxes technology the strip tilman fertitta tourism transportation tribal tropicana entertainment tv wall street
Wednesday's clutch of JP Morgan research notes included a "Macau Market Update," which puts current Macao-related jitters into perspective. Salient points include ...
• A 44% revenue growth in August was unexpectedly good (despite what you may have read elsewhere), especially considering the pincer effect of the Olympic Games in Peking and typhoon season.
• There's no hard evidence of further visa restrictions into Macao, which would impinge upon 25%-33% of the current customer base.
• Expect some mass-market decline, though, now that Hong Kong visa-holders from the mainland can't pass on through to Macao.
• A formal commission cap for junketeers should be in place by mid-month. "We have heard of some operators going above [the current maximum] in an effort to win business after the commission cap goes into place. Sounds short-sighted to us."
• No sign of write-offs of player debt or "irrational promotions," though.
• Oct.-Dec. is likely to see a dramatic slowdown on revenue growth, into the 10%-20% range (partly because the huge capacity influx represented by Venetian Macao will make for tougher year/year comparisons). But this A Good Thing, paradoxically, because the Chinese government will be less inclined to clamp down on travel to Macao if it's convinced that the casino market is decelerating on its own.
• "We were impressed with the quality" of Four Seasons Hotel Macao. Its shopping mall reminded them of Wynn Las Vegas. (It's hard to guess whether Sheldon Adelson will take that as a compliment or a slight.)
• There's not a lot of new capacity coming into the market the rest of the year. Most of what remains to be added in '08 will stem from a MGM Grand expansion and Stanley Ho's new Arce [sic] de Triomphe.
• Huge amounts of new capacity in '09 -- including a 50% increase in slots -- the considerable plurality of that stemming from Las Vegas Sands' Sheraton/St. Regis and Shangri-La/Traders properties ... not to mention the debut of Melco Crown Entertainment's much-anticipated City of Dreams.
• 2010 will be an absorption year, with only a modest infusion of new casino positions, courtesy of Encore at Wynn Macau ...
• ... and then a tidal wave of casino-hotel product hits town, in the form of three new Sands properties, and one each from Wynn, MGM and Melco Crown: 2,380 tables and 8,985 new slots on top of an installed base of 7,007 and 18,312, respectively. (Interestingly, Galaxy Entertainment's new-project pipeline seems to peter out after next year.)
• Both mass-market and VIP play at Sands Macao have been, on the whole, depressed since Venetian Macao's opening -- but it's perilous to draw conclusions here because the VIP numbers swing wildly from month to month, among other factors. (Some of the non-Sands Macao charts appear to be misprints and can't be cited.)
Cotai Strip™: too much, too soon?
• Market share. This is a biggie. According to JP Morgan's data, Stanley Ho has finally slid into second place, a few fractions of a point behind Crown Melco (co-owned by son Lawrence Ho). But the real story may be Steve Wynn. With one casino, he's garnered 17% of the market to Adelson's 19% and the elder Ho's 21%. If I were a Sands shareholder, this would worry me.
MGM shareholders, on the other hand, take some relief from the news that MGM's lone property -- for all its well-publicized struggles -- has captured almost as much market share (10% vs. 11%) as all of Galaxy's casinos put together. MGM's share of chip purchases grew to 7.5% in July (from a 1% start), while Stanley Ho's and Galaxy's percentages steadily declined over the same 10-month period.
• Sands may profess unconcern with travel restrictions on its mass-market customers but no company has more mass-market exposure in Macao than does Adelson's (with Ho's SJM running a close second). Crown has by far the least.
• Long-term forecast. Steady double-digit growth through 2011, somewhat offset by single-digit declines in win per position, as new slots and tables saturate the market. For 2009-11, JP Morgan projects 10% growth in VIP-based revenues, plus two years of 15% growth in the slot- and mass-market segments, followed by an expansion to 17.5% in 2011.
There's more, but it's Friday, it's late and you've suffered enough. Enjoy the weekend.