Question of the Day - 06 August 2009

Anything is possible in this economy, but things don't look too good for the Riviera. Its parent company, Riviera Holdings, was recently delisted from the NASDAQ and has missed several interest payments on its debt, channeling the money into operating expenses, instead. It has also drawn down the last of its credit facility, which companies don't usually do unless they're expecting the worst.

Riviera CEO William Westerman has threatened to take refuge in bankruptcy, but so far he and his main adversary, Wachovia Bank, are at a Mexican standoff. "You have a debtor threatening to jump out the window and the creditor threatening to push. At one point, someone is going to jump or push," University of Nevada-Las Vegas bankruptcy-law professor Nancy Rapoport told the Las Vegas Review-Journal.

The Riv is also being squeezed by its competitors on the Strip. With MGM Mirage hotel-casinos aggressively discounting and others following suit, the Riviera's bargain-seeking customer base now has other options. Occupancy at the hotel has been running well below average and convention bookings have tapered off badly.

Back in March, only one of the hotel's restaurants was still in operation and management has resorted to making food using large, industrial-strength cookers usually found in Army mess halls – which Riv execs proudly showed off to the Las Vegas Sun. So if you're having eggs in the coffee shop, they were probably mass-produced from powder.

We don't claim to have a crystal ball regarding the future of the Riviera or any other casino, for that matter. However, we went to see Charo’s new show recently and attendance in the casino was very, very sparse and staffing was at an absolute minimum. True, it was a Monday night, but we've seen heavier Monday-night play at the Stratosphere, just to name one. Also, we stopped by the downtown Golden Nugget on the following evening and that place was absolutely jammed.

So if you're planning to make another visit to the Riviera, better you should do it sooner rather than later, because the old gal looks like she's living on borrowed time.

If you're not familiar with David McKee's Stiffs & Georges blog, we strongly advise you to check it out. It was recently cited by the LA Times as a "must-read" and we have to concur.

A couple who'd recently stayed at the Riv. respond: "We saw your qod last week about the Riviera. I won't dispute that they have financial problems, but you made it sound like it was a ghost town. We stayed there Saturday and Sunday. Contrary to the bloggers and your analysis, 1) ALL the restaurants were open, including the buffet everyday and the coffee shop 24 hours. [Ed: The latter is a legal requirement: All Las Vegas casinos must maintain one 'round the clock' eatery (presumably so drunken gamblers can sober up).] 2) Even the food court had open restaurants. 3) We had to park on the 5th and 6th floor of the parking garage. The place was mobbed. 4) They had a convention starting Monday (with registration Sunday) that kept the place hopping as we were leaving. [Ah yes, that would've been DefCon.] "There were signs of problems (shorter hours for the players club, less employees around, short pool hours), but certainly not the extensive gloom and doom you put out there, and probably not any worse than most of the other casino hotels are showing."