Negatives, Losses, and Bankruptcy - Oh My!

In the not-so-shocking news of the weekend, both Riviera and Hooters are teetering on bankruptcy. Let's tackle these properties one at a time.

Apparently Hooters has lost $3.9 million over the first quarter of 2010 (per the Las Vegas Sun). I can't say this is particularly shocking as Hooters has been rumored to be up for bankruptcy and ready to be purchased at any time. The Hooters casino is a gimmick and its location is not good to get foot traffic. In a down economy, your location in Vegas can make or break you, and Hooters has a bad location. I have had friends stay here, while in college, who left very unimpressed and don't want to go back. If you can't even appeal to a college student, who can you appeal to? Unlike the Riviera below, I don't think very many people would miss Hooters. Hooters says bankruptcy is possible.... how about inevitable?

The Las Vegas Sun reports (Click Here) that Riviera Holdings, which also owns the Riviera in Black Hawk, CO is teetering on bankruptcy. Net revenues were down almost $4 million from the same quarter last year. Revenues in Black Hawk were up $0.1 million. I don't like the Riviera, and I think it's a dump. I have never enjoyed playing there, and if you consider the remaining "original" strip hotels that still exist, it's probably my least favorite. I have always enjoyed the Sahara and the Tropicana, even as they've seen better days, and I'd still rather go into Circus Circus than the Riviera.

That all being said, I would like to see someone try to infuse some capital into the Riviera and make it modern. We've lost many of the originals like The Sands, The Dunes, The Desert Inn, The Stardust, and The Thunderbird, and I am not interested in seeing more go, even the Riviera. But the Riviera, unlike the Tropicana, suffers from poor strip location that could make a remodel irrelevant. The Riviera sits on a large parcel of land for a small hotel, so if someone did want to tear it down, the land could be enticing. Regardless, it appears that Riviera, as it exists now, isn't long for Las Vegas Blvd.

The Strip seems to be condensing. Riviera is in trouble, Sahara is offering $1 blackjack and $1 rooms, Fountainebleau remains unfinished, and Circus Circus loses money for MGM. With the empty lots that used to be The Stardust and The Frontier, at this point, it seems that the northern most point of the strip is Wynncore. I would love to see the north revitalized on the empty lots while preserving the history in the older places. Time will tell if more growth can happen on the Strip, but for now, for my purposes, the Strip is really Encore to Mandalay Bay.

The Under-Reported Story of the Year

This week Perini, the folks contracted to build CityCenter, wrote a letter to the Governor of Nevada asking him to step in and help them secure approximately $500 million that is owed to them by MGM Mirage (or MGM Resorts International, whatever). Embedded in the letter is a small point that the CityCenter condos are closing at an alarmingly slow rate. The letter cites the source below:

http://www.lvbusinesspress.com/articles/2010/04/12/opinion/columnists/stutz/iq_35200068.txt

Really? Only 25 condos out of 2,400 have closed since CityCenter opened? I understand that we are in a recession and Las Vegas is particularly bad off, but that rate is cause for concern. That means 1% of condos have closed when CityCenter should be at the height of interest. This makes me wonder if they will consider turning some of the Vdara or Mandarin Oriental condos into hotel rooms. Not that CityCenter needs the trouble of selling out additional rooms.

With the struggle to sell condos and hotel rooms, I think it will be a long time before we ever see the Harmon Hotel at CityCenter open, and I bet MGM is breathing a huge sigh of relief that they were able to cut the condos out of the Harmon. I wonder if Jim Murren ever wishes he could have a do-over on Harmon, Vdara, and Veer. I just don't see how they fit into today's economy.

Las Vegas: Redundant City?

It's been a while since I wrote and I even just started the blog a few months back. Its not for lack of interest, but rather lack of things to say. While I still follow up with all of the news out of Vegas, there's only so much one can think of or say about bankruptcy and stalled projects. But I'll save that rant for next time (and so there isn't such a large gap between posts).

I was motivated to write this entry by a story that appeared in the Las Vegas Sun this morning. Here is the link:

http://www.lasvegassun.com/news/2009/sep/30/what-happened-theme-vegas-theme-resorts/

The image above is probably one of the most iconic examples of de-theming in Las Vegas. After MGM aquired Mirage Resorts, they changed Treasure Island, a pirate themed resort, to the trendy TI, complete with crappy marquee. (You can google it if you don't know what the new one looks like, but I won't deface my blog by publishing it). At any rate, de-theming hurts Las Vegas. Sure there are plenty of millionaires out there that want to stay in the most swankiest of hotels and feel pampered, but there needs to be distinguishing factors among places to stay. As it seems right now, with every hotel de-theming, there are three types of hotels on the strip. There's the Luxury hotel, the Modern-Hip hotel, and the budget hotel.

The only thing distinguishing staying at Planet Hollywood, TI, or Luxor (all Modern-Hip) is the price. You don't stay at Treasure Island for the Pirate feel or the Luxor for the Egyptian feel because they've removed all aspects of these themes. So whats to draw someone to walk around the strip and check out every property? It's almost hard to tell the difference these days between properties. The fun and excitement just isn't there. The casinos want you to play the games, lose your money, and leave. There's no interest in making sure you have fun elsewhere. People are more apt to return, even if they lose their money, if they had an enjoyable overall experience.

I stand by the fact that I believe the majority of Vegas goers would like a completely different feeling from one property to another. Not every property can copy Steve Wynn and be high-class luxury. I think the casinos will realize this soon and start to find ways to differentiate themselves again. People will always gamble, but with more states legalizing gambling, what's to keep people coming to Las Vegas? The casinos need to be more impressive and different than the local ones. This means that Las Vegas needs to bring back themes. Until they do, I will shed a tear for years past.

Something "new" from Harrah's

So I'm a bit late talking about this, but as far as Vegas goes, it's the first big news that doesn't have to do with bankruptcy in some time. According to the folks at Las Vegas Sun, Harrah's is going to take a new approach to Las Vegas. See the article below:

http://www.lasvegassun.com/news/2009/jul/12/harrahs-plans-new-street-bars-eateries-near-strip/

It seems that Harrah's has realized what I have thought for a few years now. That the high end market in Las Vegas has become over saturated. There's the high end places (Wynn, Encore, Bellagio, Aria, Mandalay Bay) and the places that charge high end prices but don't feel as high end (Paris, Palazzo, Caesars, Venetian, Mirage, Hotel 32, Planet Hollywood). Harrah's has decided that, rather than tear down the very condensed block with Bills, Flamingo, O'Sheas, Imperial Palace, and Harrah's, that they will direct the current traffic into a walkway of stores and an observation wheel.

The current plan would have Harrah's close the service road between Flamingo and Oshea's and turn it into a walking mall with plenty of bars and stores. They would leave the current properties open in an attempt to appeal to the mid-market consumer. See the Las Vegas Sun link above for more detailed information and a mock-up of what this might look like.

As opposed to our good friends at Vegastripping.com, I happen to think this project makes a lot of sense. The high end market is over-saturated and the low end market has places to stay like Circus Circus, Sahara, the Trop, Casino Royale, etc. But the mid-market has somehow been left out of the picture. Most mid-market places have tried upgrading their rooms and amenities to be part of the high-end picture, like Treasure Island. I believe that Harrah's has the right plan. Many mid level consumers don't want to stay at a Circus Circus but can't afford a nice place like Bellagio, and it's nice to have a choice in between.

As far as the walking mall goes, while there are plenty of shops and bars in Las Vegas, it is a nice concept to have a little row of places to eat and drink. The observation wheel is an idea that has been proposed numerous times but never completed. With the ever growing Vegas skyline, it's something that would not only draw crowds down the street, but is also something that would be awesome to almost any visitor. My only hope is that they don't put the giant Harrah's logo in the center like the picture.

All that being said, however, I doubt Harrah's could get the funding for this project. Their debt situation is out of control and with the way lenders are giving loans, it sounds like Harrah's may be out in the cold on this one.

I am one, however, that would like to see this happen.

Slots-A-Fun Update

Our good friends at vegastripping.com finally got the scoop out of MGM Mirage regarding Slots-A-Fun. Here's what they had to say:

For purposes of operational efficiency, the two separate gaming licenses at Circus Circus Las Vegas and Slots-A-Fun were merged into one license on July 1. Guests will notice that there are new gaming chips and some other minor, visible changes at Slots-A-Fun, in order to comply with the new licensing structure. There are no plans to sell or close Slots-A-Fun.

The official name of the property will be Slots-A-Fun at Circus Circus.

The news makes it sound like not much will change. Since the licenses were merged, uniforms, chips, signs have to be changed, but the feel, carpet, etc. shouldn't have to change. No one seems to know yet if Slots-A-Fun will be incorporating the ticket-in ticket-out system, but some sources say that they have already begun the changeover. That is sad as Slots-A-Fun was the last place on the strip where you could still hear coins hit the trey.

However, I'm glad to hear that the hot dogs, carpet, and overall feel are (hopefully) not going to change.

Not Slots-A-Fun

I had been thinking about writing some thoughts and musings on Las Vegas for a while now, but nothing had really kicked it off for me... until today. It appears that MGM Mirage has decided to close down the smallest casino on the Las Vegas Strip, Slots-A-Fun, and to add it on to the Circus Circus property.

This saddens me in more ways that I can describe. Slots-A-Fun had so much character. It was the only casino left on the strip that still disbursed coins when you cashed out (a great sound that can't be duplicated with speakers no matter how hard you try). The carpet was classic... do a Google search if you haven't seen it or don't remember it. They had $1.99 (recently raised from 99 cents) hot dogs, cheap drinks, really low limit tables ($1 blackjack, $2 Craps, 50 cent Roulette). It definitely was a one-of-a-kind place.

By contrast there is nothing fun or welcoming about Circus Circus. It is so bad that MGM Mirage won't even include their players card there. So as of July 1st Slots-A-Fun will being being re-branded and incorporated into the Circus Circus property. It's a sad day for Vegas fans and people who wanted a cheap fun place to gamble. I'm glad I got to see it one last time in May and that my last great memory will be my girlfriend hitting a small jackpot on the Deal or No Deal slot machine. Slots-A-Fun will always hold a fond place in my heart. More of my time will now be spent at Fremont Street, especially since I have no need to walk north of Encore anymore.

RIP dear friend.