back in early 09. I don't own gaming stocks, but if I did it would by Wynn. The only other public gaming stocks with properties in Vegas are MGM and Boyd. I understand Harrahs plans to go public yet again. Re your point about getting out NOW, getting out of what? Most if not all properties are owned by LVS, MGM and Harrahs.
It seems every time I go to Vegas it's packed. Room occupancy is running in the high 80s. The problem is the consumer is spending less, specifically in the gaming area, plus the hotel margins are really thin. They make money when occupancy is in the 95% range. Sounds like they are copying the airline pricing model. That's another industry I wouldn't invest in.
Talk about a gamble, this one defies belief. When the original developer defaulted on a $1 billion loan to Deutsche Bank, the other major houses looked at the property and said “no thanks.” But the bank officials somehow concluded that it made more sense to toss in $3 billion of their own money than take a $1 billion loss so now we have a hotel casino directly owned by a bank.
So they have a 4 billion investment in this rather modest strip property. Okay, that is Bellagio and Venetian cost –no one else has come close to that amount.
Yes, they are flying in Jay Z and Coldplay for New Year’s Eve but where’s the market? The huge City Center is practically deserted; Mandalay Bay is dead, the Palazzo, the new casino from LV Sand, has more dealers than customers; even Bellagio is offering one night free if you will pay for two. Don’t be misled by the soaring stock prices of Wynn and LV Sands – those stocks are being drive by Macau revenues, not LV.
On top of that these people have no idea what they are doing – rooms for Dec 19 -25 – the slowest week of the year -cost $175 to $225. You can stay at the Venetian for $109-160 for the same period. The once elite Mirage $40 to $100.
While there are some who will say that the addition of another buffet is all good, this new soon to be Ch 11 albatross will only cut into the occupancy rates/revenues of the other houses. Plus while I love getting great rates at these casinos, the truth is that it is not much fun if the casino is near deserted. If you own stock in Deutsche Bank, or any Vegas casino other than Wynn and LV Sands, get out NOW.
back in early 09. I don't own gaming stocks, but if I did it would by Wynn. The only other public gaming stocks with properties in Vegas are MGM and Boyd. I understand Harrahs plans to go public yet again. Re your point about getting out NOW, getting out of what? Most if not all properties are owned by LVS, MGM and Harrahs.
It seems every time I go to Vegas it's packed. Room occupancy is running in the high 80s. The problem is the consumer is spending less, specifically in the gaming area, plus the hotel margins are really thin. They make money when occupancy is in the 95% range. Sounds like they are copying the airline pricing model. That's another industry I wouldn't invest in.
according to LVSun and for most of the year was under 80%. Aria, the newest property, reported a stunning 63% for the first half of the year and many believe it took guests from Bellagio and Mirage rather than added new customers.
The Cosmo will add 3000 new rooms. My experience at the Venetian is good crowds on weekends but slim during the week.
But yes with my usual stock picking acumen I passed on Wynn at $35 and LVS at $12.50 bc there were rumors of restrictions in Macau and didn't see how they could make serious money in Vegas. Boy, did I miss a chance to triple my money in about 18 months.
I bought a thousand shares right at a dollar and sold covered call on the shares making 3 or 4 dollars a share. Worst deal I ever made in the market. Did the same with Ford.
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