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Question of the Day - 10 February 2022

Q:

If you look at things from the casino-resort's point of view, have they increased the cost of nearly everything to customers to make up for the huge losses they had in 2020 and early 2021? Perhaps they're just now getting back to even from the horrible 2020 year? Surely, they lost millions/billions in 2020, not just in Las Vegas but at all their locations.

A:

According to the Nevada Gaming Control Board, casinos in the Silver State lost $206 million in the fiscal year ending June 30, 2021. To put that in perspective, the same 302 casinos registered $2.9 billion of profit in the mid-2019 to mid-2020 period. 

In the last 10 months, customers have been gambling more than ever before, setting revenue records for Nevada that we, quite frankly, thought would never be reached after the Great Recession of 2008-2009. The totals for 2021 came out a couple weeks ago and statewide, Nevada casinos won $13.4 billion, setting a new record by surpassing the previous one of $12.8 billion set in 2007. The Las Vegas Strip also set a new revenue record last year.

However, this hasn't stopped them from resorting to a variety of measures designed to further shore up the bottom line.

Take employment: 18% of jobs have been lost, with employment falling from almost 136,000 to about 111,500. Casinos in Las Vegas are doing 12% more business than in 2019 with 30% less staffing. And contrary to the employment "challenges" that casino operators are fond of moaning about when they talk to reporters, it’s not because workers are hard to find. Thousands of Culinary Union members are still looking for jobs.

Rather, while running with skeleton crews during the worst of the Great Pandemic, casino operators realized how profitable it could be by staffing up to only the minimum level that they dared without threatening profit and cash-flow margins. They say in public that good help is hard to find, but when talking to Wall Street analysts, boast about the margin improvements they've achieved and disclose that, even when they staff up, it will be short of 2019 numbers.

Oh, and forget about getting your room cleaned during a hotel stay. Or eating at a buffet. Or finding a blackjack table that takes $5 bets.

Such niceties have gone the way of the dodo in the name of fattening profits. Not only are resort fees here to stay, they’re spreading. The struggling Virgin Hotel recently reneged on its no-resort-fee pledge and is charging you for things you use (wi-fi) and don’t (the phone by the toilet). Some casinos hide behind health-and-safety excuses for certain of these eliminations (cleaning, buffets), but they’re actually trying to eradicate what they consider loss leaders.

Late last year, Station Casinos, for another example, bought back $350 million of its common stock and paid a generous $3-per-share dividend to its stockholders. The company said in a statement, "It not only shows the position of strength from a cash-flow and balance-sheet perspective, but also returns capital to shareholders, while leaving the company still well positioned to develop the pipeline.” In other words, we're making so much money that we can spend a third of a billion on our own stock (boosting the share price), pay dividends, and have enough left over for further casino development (the $750 million Durango Station for one).

So we wouldn't feel too sorry for the casinos, especially in Las Vegas. Readers of LVA and QoD are only too familiar with the “Less Vegas” culture of less product for more money. If you’re determined to take a Las Vegas vacation, expect an experience closer to that of a regional casino — just much more expensive, with worse service.

 

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Comments

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  • Kevin Lewis Feb-10-2022
    Let's all stay the $%^$@* away
    Since the casino megacorporations have seen fit to turn Vegas into one giant sucker trap, the message meant for us (Vegas aficionados who nonetheless want a decent experience at a decent price, God forbid) is clear: "Piss off."
    
    Their cynical profit-mongering is breathtaking in its audacity. Surely they realize that only a complete rube who cares not a whit for money or value would come to Vegas now--and those who returned after a two-year hiatus have been appalled and disgusted by how rotten the whole experience has become. But evidently, the casinos feel that there's an unlimited supply of those rubes--or maybe, they're just trying to inflate the bottom line short term, and who cares about the future. Short event horizon.
    
    To use an iconic metaphor, Vegas has decided to slaughter the sheep instead of shearing them. May the rivers of blood from all those slaughtered tourists overflow the Bellagio fountain and turn Vegas into an apocalyptic wasteland. Have a nice day.

  • Donzack Feb-10-2022
    Boycott the strip
    I agree with Kevin, but the regulars will always put their money in the paper shredders keeping the corporations alive. They are the true organized crime. And legal since they pay street tax to the government.

  • Bob Nelson Feb-10-2022
    It’s just business
    Demand is up, supply is down a little with the closed casinos.  Pretty much any business will use that advantage to increase profits.  I hope enough people will remember things like a good buffet or decent games and give business to those who provide them.  I’m not real confident that will happen based on the current conditions though.

  • [email protected] Feb-10-2022
    I won't be back!
    I don't often agree with Kevin, however he is spot on here.  I used to travel to Las Vegas 2-5 times a year until the "Pandemic"  but I will not be back until they restore what I used to go there to enjoy, which was mainly buffets, comps, free parking, and decent video poker tables.  I understand dining prices had to go up because of rampant inflation, but the price gauging and lack of service is ridiculous.  I will go back when the LV Advisor signals back to normalcy. 

  • Jeff Darling Feb-10-2022
    They only take what you give them!
    I will be there next week for 4 comped nights, I plan on gambling and sight seeing and have done a lot of research to find places to eat/visit that are within my budget.  I consider myself a "low roller" and never spend more than what I have budgeted.  I read some of these comments and just shake my head. If you don't like visiting then don't visit, if you don't like the way casinos are being run, then don't visit.  For me it's all entertainment, I love seeing the sights and visiting places I have never been too.  I have been coming to Vegas since 2002, and never feel like I am being taken advantage of or over paying for things I want to do.  

  • Lotel Feb-10-2022
    Just old supply and demand.
    Not sure where everyone is getting their money but people are spending at incredible high rate with high prices  on everything from homes, cars, vacations , going to Vegas,etc.. It should slow down someday and get back closer to normal , but casinos are finding out they can get by with less staff and less free stuff , I will still go to Vegas  but less trips now .

  • Luis Feb-10-2022
    that's called taking advantage!
    Hotel casino industry is perfectly fine, they are earning at a record pace, What they are doing is taking advantage of the times, as they have a pretext to gauge the customer. What they are realy doing is trying to make as much profit as they can until the bubble bursts, they've been doing it now for a long time, ever since they started with their supposed resort fee, ever since that, they have been looking for ways to charge more and more and give less and less, when will it stop?, when we stop going and stop spending at their places, they are already preparing for that, that's why they are leasing, and don't own their properties anymore, when it all dries up, they are gone!  

  • kafka45 Feb-10-2022
    Well DUH
    Its just like politicians found out 4 years ago.. The BIG LIE works.
    and..  they public will actually put UP with this stuff.  Once they found out that the $$ kept coming in after them cutting services..the die was cast.  Why BOTHER with perks?  We keep spending.  win/win.  Maybe eventually... the public will get tired of it.  But for now.. the squeeze will keep coming.  The unions are gonna have a REALLY tough time trying to just keep whatever they have. As long as the owners have the "there's plenty more where that come from" attitude towards the gamblers, there ain't ANY hope of things improving.  

  • David Sabo Feb-10-2022
    DIAMOND LOUNGES IN VEGAS
    The closure of all Las Vegas Diamond lounges at Caesars properties says it all. Players played the games with me carrot of the Diamond Lounges dangling in front of them. Once they earned Diamond status the Diamond Lounges we're closed. CET basically said nothing about it. Avoid playing at CET properties!

  • Llew Feb-10-2022
    That’s why…
    ….I no longer plan to spend my winters in Las Vegas. The greed of the casino corporations has taken most of the fun out of it.  Except for Barge, our week-long poker gathering in the summer, no more Sin City for me. Too many other places actually appreciate my tourist dollars. 
    
    

  • Diane Crosby Feb-10-2022
    Lower payouts
    I was there for 11 days in January and definitely noticed a lower payout on slots. Eventually, I quit playing much.

  • Sam Glantzow Feb-10-2022
    joke/no joke
    situation reminds me of young boy who wants a video game. costs $200. father says, "if you can make $100 i'll chip in the rest" boy asks, "how?" father: "when i was your age i had a lemonade stand to make money. sold cup for $0.25" boy thinks, sets up stand. father goes out to buy first cup, sees sign: "LEMONADE $100/cup". father:"$100 a cup?!? don't you thinks that's very high?" son: "sure, but only have to sell one!"
    
    casinos raised table games' minimums to where i & others won't play but there are enough making up the difference at the fewer open tables that they don't care. same with rates, etc. 

  • John Lopez Feb-10-2022
    Nickel & Dimming us is here to stay
    Unfortunately they will continue to nickel & dime us, the numbers don’t lie, people are still going in huge numbers. I will continue to go as long as I get comped rooms or highly discounted rates. Once that ends, so do my Vegas days. They will push the envelope as far as they can. There’s fees they haven’t even dreamed up yet, like a pay toilet in your room lol. 

  • Doc H Feb-10-2022
    kafka45 "BIG LIE"
    "Its just like politicians found out 4 years ago.. The BIG LIE works."
    
    Oh right, yes yes yes yes, good thing joey is here, he'll "shut it all down" and make it all back to normal. Inflation is good after all, didn't you hear that one? Honesty and competency is here. Yay. 
    
    Come on people, it's supply and demand. And inflation is just starting, we ain't seen nothing yet, and casinos will feel this impact just like everyone of us and make prices worse. All you old timers, we can't go back to the "wonder" years. Change is life. One can whine about it, accept it, or move on and find another hobby in life or another place to play. Or better yet, buy some stock of these casino giants and you might not complain as much if we are on the subject matter of making money. Gets old all this "good old days" were wonderful. Reality: They always took your money in the end people, perhaps a little slower, but for the vast majority of people out there, they still took it, unless one gets very lucky. 

  • VegasVic Feb-10-2022
    Other Options
    I've been a regular 3-4 times a year visitor for years.  I stopped staying on the strip several years ago.  But I'm pretty much done.  Gambling? I'm a craps and blackjack player mostly and I have better options near me.  Shows? My GF and I have enjoyed many shows in Vegas over the years but there hasn't been anything new/good for a long time.  Restaurants?  Come on now.  Overpaying because a "celebrity" chef's name is on the place is a joke. It's bittersweet because of a lot of great memories there but adios Vegas, maybe I'll see you down the road in a few years. 

  • steve crouse Feb-10-2022
    Implosion
    When TSHTF, casinos will be paying you to stay there.
    The stock market will crash, and all the corporations that own casinos will either sell them or flat out mclose them.
    But before that happens, there will be some real bargains to be had,

  • O2bnVegas Feb-10-2022
    Room cleaning
    I actually like not having housekeepers come in daily.  I pretty much cleaned and straightened my room anyway before the housekeeper was to do it, and still pretty much do but I don't obsess over it.  They will come in and do anything or bring anything (linens, etc.) with one phone call.
    
    Candy 
    
      

  • Lucky Feb-10-2022
    Strip stay
    Yeah, the resort fees are a gotcha.  But I get comped alot, and do not see them, or parking fees, etc.  I do not pay for food or drink.  I do play, and I have been lucky at crappy VP and expensive Craps.  I am going with my friends to Vegas the end of March for fun and golf (the 2 are NOT the same).  The views are great, the people watching is great, and it will not cost me or my freinds much.  If you think the strip is a rip off, don't go.  For me, its more expensive, but I still go.  I am not trying to make a living gambling, just having fun. I am blessed that I can afford it.  But if you feel its a rip off, which it is, its your choice, don't go. As an aside, I was 7 stars. I am now a Diamond Plus, which is a much lower level, due to not willing to take a chance getting sick from a casino visit (I am older).  My comp and free play offers are higher now than they were before the pandemic when I was a 7S.  So for some, the offers are not lower.

  • David Miller Feb-10-2022
    The Big Gouge continues...
      Most everyone who has been going to Vegas for years know just how much Vegas has changed - and not for the better. Current Vegas casinos do not want our business, they are catering to the brain dead millennials who have no concept of the value of a dollar. As long as these morons pay all of the rip off fees and accept the down grading of games and slots the bean counters will continue to come up with more asinine ways to charge for things that used to be a given, such as free parking, reasonable food options - you get the picture. This format will not change until people quit going to Vegas - it is just that simple.                  

  • Roy Furukawa Feb-10-2022
    Not just capitalism
    Some people saying it's just supply and demand or just business are why people yearn for the good old days when you weren't treated like a piece of meat by the casinos and every operator wasn't putting pure profit above all else. 

  • Doc H Feb-10-2022
    Roy
    Hi Roy, sounds like you are referring to customer service being bad? Not getting "freebies"? 
    
    In my experience, when something wasn't quite right, the places we stay at, they were very accommodating. Quite shocked at what we were given in food credits, a free suite, and I'm not a complainer type, one who yells and swears. And we aren't anywhere near high rollers. For us, MGM and Wynn properties have been very good on customer service for us. Certainly never felt like treated like "meat" as sounds like your experience is. As for profit, well, it always has been about that, right? Perhaps you're saying it's worse but what are we comparing it to? A 5 star property vs a grind joint? Of course it will be more expensive at the 5 star. We also have found it's not hard to get say a gold mlife level and that gets no charge parking, resort fee is waived now. To get a 5 star room for around $100? That's not a rip-off in my book, but perhaps coming from a $10 room at a 2 star place, well, sure.
    
    

  • DwWashburn9 Feb-11-2022
    Vote
    Business, whether it be the local grocer, car mechanic or casino, is like a voting booth.  Your votes are your dollars.  If you don't like what a business is doing, don't give them your votes.  Casinos will never go back to the "good old days" until people stop coming and paying more for less.