[aggrofish]

Originally Posted by ClarkGrisowld

... Vegas no longer caters to gamblers.

What is it 40 percent of revenue is gaming related, 60 percent non gaming?

I belive your post mentions dining/entertainment as break even propositions. I'm sure they're making money, but nowhere near the margins of gaming.

I think a correct quote would be "las Vegas no longer caters to low limit gamblers."

[Jonotastic]

Originally Posted by Master Shake

Yes, good point and I completely agree with your statement. I am all for the right of the corporations to do this if they so desire. Along the same lines though, I am also for the "word of mouth" effect, and the overall ability of the customer to look elsewhere for value. I am just somewhat upset that there is either incompetence on the part of the executives that they don't see this, or that they just don't care. Ideally, I would imagine you would want to run your business at a profit, but not so much so that you end up alienating your customer base. If I ran a lemonade stand, I could make a great profit charging $100 per glass! But would anyone buy them? From what I have read in this thread, and elsewhere online, no one (customers) is happy with how the CC turned out, or how it is being run.

However, I will laugh my a** off if (or when) they have to put the property (in the case, CC) into foreclosure because of their overwhelming greed and desire for profit -- even if it is at the expense of the customer, and ultimately, the business itself. The sad part though, is that usually the executives who made these decisions (and have long since cashed their bonus checks) will most likely be gone, and in search of the next victim company.

I understand why you think the big corporations in Vegas are bank rolling, but you're wrong. MGM Mirage, Las Vegas Sands, Harrahs, and Wynn have been hurting BAD. In March, Las Vegas Sands (Venetian & Palazo) almost filed for bankruptcy! City Center wasn't going to be built at one point because they ran out of funds, they were bailed out at the last minute. I trade MGM, LVS, WYNN on the stock market, so I know all about their financial troubles. They are loosing MILLIONS every quarter. They can't afford to give freebies to people who only bet $10 per hand anymore. You don't need a brokerage account to look up their financials. Go to Yahoo Finance and see for yourself. There are numerous hidden expenses in the casino industry and especially for the large casinos in Vegas. A mom and pop bar on the street corner doesn't have to pay a security force the size of a small country's army etc. I think the prices for many things in Vegas are ridiculously high, but I understand why they are. We own a restaurant and I cannot even begin to imagine how much a buffet such as in the Wynn would cost to operate. We charge $30 per person when we have a big buffet and for them to charge only $10 more than us is amazing. Sheldon Adelson and Steve Wynn have put millions of their own money into their corporations to keep them alive. When City Center first opened the casino stocks rallied because it was their biggest hope to drive more people to Vegas (short run). If it wasn't for the recovery in Macau, China...MGM, LVS, WYNN would be in deep $%^& right now...or deeper $%^& I should say. Honestly, go to some of the expensive restaurants or clubs such as TAO or Areole. Look at the details, try to imagine how much it cost to build and design those places, there is a reason why a beer can be up to $10. If you don't care about the atmosphere there are cheaper alternatives, but most people who visit the strip want to feel like a celebrity and that kind of atmosphere comes at a price, it's not simply greed. I actually think there is great value in Vegas overall. You can stay at an amazing hotel for $150 per night...where I live $150 will get you a holiday inn express.

---

About City Center:

I think a major flaw from a business stand point was the decision to put the casino towards the back of the property.

[olecapt]

I suggest letting it ride a couple of years guys. I see no way City Center fails though I can see it taking MGM down.

I actually think the worst thing was the bet on the condos...which I still expect is not going to turn out well. It does not look like any condo of the strip sort will return its cost to build. So MGM is still potentially sitting on a world of hurt there.

They may have to do another go around on Aria and Crystal and all that...but they will. Then we see.

I would think the jury should stay out until may 1012 or 1013 and then see what it looks like.

I am very discouraged by the local reviews. Many of us are pretty good at that and the news was bad. But let us see if they can find a recovery path.

[ClarkGrisowld]

Originally Posted by olecapt

I suggest letting it ride a couple of years guys. I see no way City Center fails though I can see it taking MGM down.

I believe CC is a separate entity owned by MGM and Dubai. If it goes bankrupt, it doesn't take MGM down but obviously MGM is banking on a cash infusion from CC operations (particularly the condo sales).

What's interesting is if you look at a number of hotel corporations, the model has been recently to sell the real estate and then sign management contracts to operate the property. I'm not sure when or if that would happen in Vegas, but I could see CC as a prime candidate.

[ClarkGrisowld]

Originally Posted by aggrofish

What is it 40 percent of revenue is gaming related, 60 percent non gaming?

I belive your post mentions dining/entertainment as break even propositions. I'm sure they're making money, but nowhere near the margins of gaming.

I think a correct quote would be "las Vegas no longer caters to low limit gamblers."

Not sure how the numbers have tilted in this recession...It was about 40% gaming, 40% hotel, 20% everything else. FYI, I believe old Vegas was like 80% gaming. Hotel at 75-80% margins is by far the biggest driver of profits, at least until you factor in depreciation and capital expenditures.

The dining/entertainment tend to be break-even operations (they used to be loss leaders) because the celebrity chef or theater group take all the profits. Some make money, some don't and as a whole the groups don't profit, still propped up as it is by comps.

[jfkIII]

It's bad enough that the economy tanked at the exact time this project was running at the 3/4 pole...but to add these bad reviews on top of that...is death. They needed to come out of the starting gate running hard...but it seems like the City Center horse is still stuck in the gate. My prediction is that this horse breaks a leg and will need to be shot.

[jpk]

The problem with City Center isn't that it was built by greedy, evil corporations, but that it was designed and built by a "corporation" instead of a single person. Steve Wynn probably never would have made City Center with such a bland corporate feel. City Center feels designed by committee, rather than exhibiting something that came from a singular persons visions and pasion.

And I agree with Olecapt, MGM made a huge bet on condos and residential with City Center. It was a big gamble and it might have been a bust. Can't blame them for trying something different (and highly speculative).

[ClarkGrisowld]

Originally Posted by jfkIII

It's bad enough that the economy tanked at the exact time this project was running at the 3/4 pole...but to add these bad reviews on top of that...is death. They needed to come out of the starting gate running hard...but it seems like the City Center horse is still stuck in the gate. My prediction is that this horse breaks a leg and will need to be shot.

If that's the case, what does that mean for Fountainbleu and Cosmopolitan? Because regardless of how unappealing CC may be, it still has a load of high-end rooms and regardless how much it struggles they WILL fill the rooms. Don't know, maybe it's good for them since maybe CC won't be much of a competitor on that high-end.

The great hope for everyone was that CC would comparatively boost visitation and it would lift all boats. Now the opposite appears to be a legit concern. CC being a net negative in the demand/supply equation and unable to charge premium rates is NOT GOOD for Vegas.

I guess now the hope might be for Fountainbleu and Cosmopolitan to provide that "wow" factor to boost visitation, but you're talking late 2010 before they open.

[jfkIII]

I agree...if anything, CC's failures will be Fountainbleu's and Cosmopolitan's gains.

That is, IF they are ever finished.

[Master Shake]

I just see it as ever since the corporations took over the Strip, each new casino has to be bigger and so much more extravagant (and so much more expensive to build and operate) than the last one -- up to a point where they are now almost unmanageable. Isn't the CC the biggest (or one of the biggest) projects in the last decade? From what I am reading, I think we can all agree that there is an obvious downturn in traffic to Las Vegas. Of course this is due to many reasons, but at least the people I speak with usually say that Las Vegas is just too expensive now.

Back around 2000 and on, even after 9/11 and the tech stock crash, it seemed to me at least that the corporations/casino started to no longer care so much about their customers. Prices started going up, comps started going down, etc., the big three started to buy the little guys up. Then casino managers/executives decided that they could get a lot more money out of their customers by charging more for rooms, meals, entertainment and relying less on gambling revenue -- especially since there was now less competition. Maybe a lot of this is due to the overbuilding and the overall extravagance of what the Strip has become, or wanting to make Vegas into a family destination?

It does make sense that if you are going to spend billions of $$$ to build a new casino and margin yourself up to the limit, you're going to have to charge a lot for the services. But again, is this really what the average Vegas gambler or vacationer really wants? And how well will this hold up during bad economy's such as what we are facing right now? I believe that the gambling side will always make it through the bad economy's -- but will the room/meals/entertainment and extravagance side?

So if a place like the CC isn't what people want, and therefore gets unfavorable reviews and not enough customers, who's fault is that? Is it the consumers fault for not liking what MGM said we should love? And what are they going to build next, in order to top the CC?

Sorry if I seem to be coming off hard on the greedy corporations, as I put it earlier. But I still feel it was much better 10+ years ago before the corporations took over and bought up almost all of the originals, got rid of the people who knew your name and valued you as a customer, and drove competition down to the big three. Maybe this is just my own opinion alone, and places like the CC will do so well that someone will make CC 2!