Archive for December 7th, 2012

Economic Growth Forecasted on Strip Resorts for 2013

Friday, December 7th, 2012

On Thursday, a group of analysts said that hotels along the Strip can expect an increase in revenue as much as 5.3%. The increase in revenue is expected to come from multiple sources as the economy continues to recover. Newmark Grubb Knight Frank’s Global Gaming Group, a commercial real estate brokerage based in Las Vegas, published their predictions for 2013. The group predicted that the entire Strip revenue will have a growth of 1.5%-5.3% that is if the trend continues and the country doesn’t slip into recession once again.

The Newark Grubb Knight Frank’s Global Gaming Group said that the Strip revenue rose up to 2.5% through June. And improved to 4% in September, which is equal to a $6.2 billion increase. Operators of Strip hotel-casinos have experienced a gain in visitation rate of 1.8% during the month of September. In 2014, there’s a planned extension for additional 1,217 rooms. The project is in partnership with the SLS Las Vegas that will be located at the former Sahara site. Also additional units are also planned for the Downtown Grand that will open next year. The biggest component that’s moving the visitation rate upward is the local consumers.

But not all the resorts are gaining profit from the trend. The Stratosphere, a budget-friendly hotel casino has declined in its average room rate from $50.31 to $48.99 but on the other side of the coin the high-end Cosmopolitan hotel resort increased the rates of their rooms from $233 to $257.

One other factor that could affect the trend is China’s economy. The Chinese community comprises a large cut of high-end baccarat players. The baccarat revenue could still grow or fall by 5%, this will depend on the Chinese real estate and stock market performance. So definitely, their country’s economy is something to keep an eye on. Se Oei, director of gaming research and analysis for Newark Grubb Knight Frank’s Global Gaming Group said that the Eurozone situation and the fiscal cliff could still affect the overall trend. He stressed that although there are some concerns the group is still optimistic.