Inside Asian Gaming

August 2016 inside asian gaming 21 In Focus for itself. MGM Resorts International operates more than 40,000 rooms alone either on or around the Strip, Caesars Entertainment has more than 23,000, Las Vegas Sands more than 7,000 and Wynn Resorts more than 4,700. There are also another 19,000 rooms spread among another dozen or so properties up and down the resort corridor. There’s still plenty of upside, too, as analysts like to point out. Macquarie analysts Chad Beynon and John Cardoso noted earlier this year that Vegas is a significant bargain compared with New York City, Chicago, San Francisco, Los Angeles or Orlando with rates still well below pre-recession highs – 12% on a nominal basis, according to their calculations, and more so when adjusted for inflation. “Most US cities have recovered to pre-crisis levels, signaling the necessary demand and economic vitality to raise rates,” they said. “We believe it is just a matter of [Las Vegas] operators pulling the trigger and charging more.” When that happens – and it is already – the effect will be to “significantly expand margins,” they said. Moreover, the supply-demand equation will favor this momentum continuing into the next decade, everything else being equal. Lucky Dragon, an Asian-themed boutique casino slated to open on West Sahara Avenue later this year, will add around 200 rooms to the market. Resorts World is billed currently at 3,100, but it’s expected to open in phases, with possibly half that number coming online in 2019. But even factoring in the full complement – and assuming Crown Resorts’ 1,200-room Alon gets built and the stalled Fontainebleau is purchased and completed – citywide room inventory will grow by only around 5%. If anything, a lot more inventory is needed. Officials project the city will host upwards of 7 million convention delegates over the next 10 years. Mega-trade events like the Consumer Electronics Show, held at the Las Vegas Convention Center every January, say they’re already maxed out for growth unless more rooms are built. A GENTING MARKET Las Vegas is back mainly because the US economy is back – not spectacularly back, but consistently, in any event. Experts predict GDP to increase by around 2% in 2016, which is in line with the last five years. Although disappointing for an economy that’s grown historically at well above 3%, the cumulative effect has been to reduce unemployment and allow households to reduce debt. “If you like Las Vegas then you like the prospects for Resorts World Las Vegas, the US$4 billion Chinese-themed destination Genting Group plans to open on the Strip from 2019.” The Las Vegas Strip is enjoying an economic resurgence