Las Vegas Is Recovering (According to Some)

The Las Vegas economy has finally started to recover, at least according to some rich casino executives. MGM Resorts CEO Jim Murren said this week that tourists are beginning to spend more money on all facets of Vegas entertainment, including hotel rooms, dining, shows, and gaming.

That sounds like great news to us... but is it really true?

There has definitely been a pick up in 2 markets in the past year or so: the "budget" market and the "high-end" market. That's good and it shows that Vegas is finally starting to do what it used to do extremely well: provide great value to both the penny-slot player and the millionaire baccarat fan. Vegas deals are always a good thing! Also, according to the stats, Strip casinos are bringing in a lot more convention business.

According to Murren:

"The recovery that has been felt for well over a year in other leisure markets around the U.S. has finally arrived... We're seeing growth on the high end and the economy side, which indicates a sustainable recovery as opposed to ... a somewhat one-dimensional recovery."

Awesome. If it's true.

One very good sign is that room revenue, long a measure of overall tourism demand, has risen 13% in the first quarter of 2011 because of increases in room rates and occupancy levels. The big convention hotels like Mandalay Bay and Aria are doing especially well as conventioneers use their expense accounts on entertainment and dining.

Overall, consumer confidence is up slightly in the US. But that may change soon because of skyrocketing gasoline prices. For now though, drive-in "auto traffic" from places like California is actually increasing during the spring months.

We say: This is all good and well. But many (most?) of the big Strip players still have billions of dollars of debt. MGM Resorts alone has a debt load of over $12 billion! Things have to REALLY begin to pick up in order for these gaming companies to start making some money. Also, there is still one big problem for Las Vegas locals: jobs. Until we figure out a way to bring down unemployment in the Las Vegas Valley it's hard to believe that any true "recovery" is on the horizon.

Learn some mo': MGM’s Jim Murren: ‘Recovery has finally arrived’