Posted: Sat Jun 21, 2008 6:48 am Post subject: Sin City is in trouble
Airline cuts, gasoline woes make Vegas tougher ticket
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Sin City is facing hard times.
Soaring fuel prices are forcing airlines to cut flights and jack up fares to this desert oasis. Road trips have become luxury travel with gasoline costing more than $4 a gallon.
And tourists who do make it to Las Vegas are spending less, leading casinos to offer deals just to keep them in their resorts.
"The overall economic uncertainty this country is facing ... makes the outlook for the next several months very murky," said Gary Thompson, spokesman for Harrah's Entertainment Inc., owner of seven Las Vegas casinos.
US Airways Group Inc. announced last week that it was cutting nearly half its Las Vegas flights as part of companywide belt-tightening. That will leave 74 US Airways flights per day by the end of the year, down from a peak of 141 in September 2007.
The result is more than 8,000 fewer seats available per day, compared to the 2007 peak, according to data from the Clark County Department of Aviation. US Airways was the second-largest carrier to Las Vegas behind Southwest Airlines.
"We've seen airlines increase and decrease service periodically. Clearly, never to this extent all at once," said Alan Feldman, a spokesman for MGM Mirage Inc., which owns 10 casinos on the Las Vegas Strip and plans to open CityCenter next year.
The flight cuts are another hit in what is shaping up to be a rough year for Las Vegas casinos. Casino officials and industry analysts said the slump is a result of economic complaints felt around the country: rising gas and food prices, home foreclosures and general uncertainty.
"As far as filling the rooms, the lack of airline service I think is going to have an impact on the entire community," Thompson said.
Nightly room prices were down 4 percent compared to one year ago and gambling revenue was down 3.7 percent, according to data through April from the Las Vegas Convention & Visitors Authority. Total airline passengers through April were down 1.8 percent, and traffic from California was down 4.8 percent.
Vegas strip employees hit hard by unemployment surge
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Nevada's unemployment rate surged a half a percent in the month of May. Workers on the Las Vegas Strip are being hit hard by hotels and casinos that are trimming their budgets.
Unemployment is currently the highest it's been in 14 years. People are spending less money, and that means many are losing their jobs.
"They're laying people off all over the Strip and there's nothing you can do about it," says Rowley. "Everybody is worried...worried about losing their houses, how they're going to make their next car payment."
Robert Vannucci, President of the Riviera, declined to be interviewed, but did say that the Riviera is "adjusting their workforce and operating procedures to meet the current business conditions."
With the economy continuing to struggle, many workers hope to ride out the slump, but many of them face an uncertain future. Unemployment experts say the most recent increase in unemployment is the result of a seasonal surge in job-seekers. But this year, there are simply fewer jobs to fill.
"If it was just one hotel that was laying off, then you could go out and find another job," says Rowley. "But with the way it is right now, nobody's hiring, so you've got no place to go."
The slumping national economy has affected the bottom line of Nevada casinos much like what happened in the wake of the terrorist attacks of Sept. 11, 2001.
For the fourth straight month and the fifth month out of the last six, gaming revenues decreased as gamblers cut their discretionary spending.
The gaming win in April was just above $1 billion statewide, a 5.05 percent decrease compared with $1.053 billion won from gamblers in April 2007, according to figures released Wednesday by the Gaming Control Board.
The total gaming win signified the third-largest single-month decline in statewide gaming revenues in five years. Casino revenues were off 14 percent last November and fell 6.9 percent in April 2003. Following the terror attacks, gaming revenues declined for five straight months.
Frank Streshley, the control board's senior research analyst, said the amount casino customers wagered on slot machines declined for the sixth straight month, an economic indicator that shows casino customers are spending fewer dollars.
"You have to assume high gasoline prices have cut into people's budgets," Streshley said. "You can go through every reporting market, and there are declines with what people are spending on slot machines. It falls in line as to how people are spending less in other areas as well."
Gamblers wagered $10.5 billion on slot machines in April, 7.6 percent less than they did a year ago. In March, the amount wagered on slot machines was 8 percent less than last year.
On the Strip, casino revenues were $524.1 million in April, a 1.28 percent decline compared with $530.9 million won in April 2007.
Posted: Sat Jun 21, 2008 8:27 am Post subject: Re: Sin City is in trouble
Any one who knows the real history of Las Vegas will understand that the city is really as one hotel/casino is so named a "Mirage".
The land was abandoned in the 1200's as the environment shifted from a support agricultural area to arid desert (even before the Global Warming cries). As the railroad expanded in the US in the late 1800's, the line from Salt Lake City to LA was placed through Vegas and the city served as a refueling spot for the steam locomotives. It was just a service stop, but when legalized gambling kicked in, well enough said.
I had to change planes in Vegas on a trip from PDX back to Columbus, OH. Have to burn up my USAirways frequent flier miles before they disappear. When getting to my seat, there was the 3 flight crew members sitting in the row behind me. They were the same crew that ran the PDX-LAS flight so I joked to them about seeing an hour before.
They were deadheading to CMH to run a flight out of there and they were Vegas based crew. We got on the topic of NW-Delta merge and rumors of United-USAirways merge and impact of it. They were definitely not happy union members working for the dying airlines.
I mentioned that my specialty is transportations systems and how airline are integrated with rail in Europe. One of the crew members replied that the US does not have any transportation system that is working. Actually when the railroads wanted to get rid of passenger service in the 1960's since the government was funding the highway system instead, the railroad wanted to work with the airport/ airlines to create a system of efficiency. The government said no, it would be a monopoly and the rail passenger service died off.
Actual the code name for Columbus is CMH, meaning Columbus Metro Hub, which the Pennsylvania RR ran right by and the RR was in the process of creating a system, thus, CMH. Trains would come from the east, planes take people to the west. A system thinking, but the government said no.
So here we are sitting in our seats on an inefficient system. I didn't want to tell that crew as I finished the story of the airport code CMH, that we can look out the window while waiting to finish boarding and kick off on "time"and see the Vegas' "Mirage". They were scared enough as they tried to figure out how to make their mortgage payment in the Mirage city when their employer says the famous old saying that the flight crews used to say to us paying customers: "Bye, Bye, thanks for flight with us".
Posted: Sat Jun 21, 2008 8:50 am Post subject: Re: Sin City is in trouble
Was out in Vegas a couple days ago, my daughter and ex live out there (much to my dismay). Whenever I’m out I like to pick up a local paper.
Straight Doomer Porn! City budget shortfalls, water problems, city growth issues because it’s surrounded by mountains and there’s nowhere left to grow. WTF, who thought this would be sustainable –in a desert no less!
Then my ex and her new husband go on to talk about how they’re moving into equity in a home they just purchased that was in foreclosure. They said it was appraised at $420K and they got it for $350K and how their “walking into equity” when I’ve been asking them to wait another year before buying.
Then there’s my daughter, growing up in that hell hole! I hope they get their senses straight move somewhere more sustainable.
Posted: Sat Jun 21, 2008 9:18 am Post subject: Re: Sin City is in trouble
FYI, Nevada's Old Senator Mr. Reid wants to build a high speed rail line from LA to Las Vegas for a small $15B of taxpayers $'s.
They just don't get it and he is the leader of our US Senate! Build a high line between 2 dying cities is a sign of who is running the feds.
Why not between Chicago and NYC or Philadelphia. I am excluding Washington DC since there is no business done there anymore.
Oh wait, there is a business there and it running on $3T per year. Shame on you big oil companies for making a profit. We want your profit so we can grow our business to $4T and still not figure out what we need to do with this "energy crisis". We want the Washington's business unit to take in more and forget about letting the oil companies taking those profits and go out to look for new harder to get oil or develop alternative energies.
Posted: Sat Jun 21, 2008 9:47 am Post subject: Re: Sin City is in trouble
I still think vegas has a bright future.
Not as a gambling and tourist mecca but as a closed military/government city.
Think about it. Ample hydro and solar potential. Water from the colorado. Perfectly isolated and defensible from the starving hordes trying to reach cibola on foot across the burning desert. A little enclave for the ruling elite as the rest of the country goes to hell. Need to ramp up the hydroponics for food production but should be doable for a small population.
Posted: Sat Jun 21, 2008 9:54 am Post subject: Re: Sin City is in trouble
diemos wrote:
I still think vegas has a bright future.
Think about it. Ample hydro and solar potential. Water from the colorado. Perfectly isolated and defensible from the starving hordes trying to reach cibola on foot across the burning desert. A little enclave for the ruling elite as the rest of the country goes to hell. Need to ramp up the hydroponics for food production but should be doable for a small population.
My vision is that the water frmo the Colorado will be redirected and used on the Western Slope BEFORE it makes it to Nevada
Not sure though, there were plans in the works to put in a massive solar plant which could help a little.
Joined: Aug 03, 2007 Posts: 3154 Location: Boston Suburbs
Posted: Sat Jun 21, 2008 10:26 am Post subject: Re: Sin City is in trouble
MyOldTDiIsStillGoing wrote:
FYI, Nevada's Old Senator Mr. Reid wants to build a high speed rail line from LA to Las Vegas for a small $15B of taxpayers $'s.
I guess it's a good thing if it can be used as a way to link up LV to the ports. But it's really intended to keep the weekenders coming from LA. _________________ Peak oil is sort of like a mental Everlasting Gobstopper, except it tastes like ass and you can't get it out of your mouth.
Joined: Apr 09, 2007 Posts: 5343 Location: Alaska (its much bigger than Texas).
Posted: Sat Jun 21, 2008 10:54 am Post subject: Re: Sin City is in trouble
MyOldTDiIsStillGoing wrote:
FYI, Nevada's Old Senator Mr. Reid wants to build a high speed rail line from LA to Las Vegas for a small $15B of taxpayers $'s. ....Why not between Chicago and NYC or Philadelphia.
Because Harry Reid (dem NV) runs the Senate and he owns lots of real estate in Las Vegas (that he acquired at bargain basement prices from his rich backers, but thats another story).
Posted: Sat Jun 21, 2008 10:58 am Post subject: Re: Sin City is in trouble
Plantagenet wrote:
MyOldTDiIsStillGoing wrote:
FYI, Nevada's Old Senator Mr. Reid wants to build a high speed rail line from LA to Las Vegas for a small $15B of taxpayers $'s. ....Why not between Chicago and NYC or Philadelphia.
Because Harry Reid (dem NV) runs the Senate and he wants this pork for his home state.
So what you're saying is, he's trying to secure federal money for the benefit of his constituents. Isn't that their job? _________________ The whole of human history is a refutation by experiment of the concept of "moral world order". - Friedrich Nietzsche
Joined: Apr 09, 2007 Posts: 5343 Location: Alaska (its much bigger than Texas).
Posted: Sat Jun 21, 2008 11:06 am Post subject: Re: Sin City is in trouble
Dreamtwister wrote:
Plantagenet wrote:
MyOldTDiIsStillGoing wrote:
FYI, Nevada's Old Senator Mr. Reid wants to build a high speed rail line from LA to Las Vegas for a small $15B of taxpayers $'s. ....Why not between Chicago and NYC or Philadelphia.
Because Harry Reid (dem NV) runs the Senate and he wants this pork for his home state.
So what you're saying is, he's trying to secure federal money for the benefit of his constituents. Isn't that their job?
Sure. And it doesn't hurt that ol' Harry himself owns some nice land in Las Vegas that his rich "constituents" sold to him at cut-rate prices either.
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