Analysts Predict Strip Revenue Growth in 2013
Although currently a fiscal cliff looms in Washington, that could potentially send the country back into a recession, barring recession, a number of analysts have stated that they believed that strip revenue will grow substantially in 2013. The growth of Las Vegas is going to depend heavily upon how the US economy performs moving forward. Some have predicted this much is a 5.3% increase in overall revenue for businesses in Las Vegas. Should a recession begin to grow in the United States again, analysts have predicted as much as an 8% decrease in overall revenue for many businesses in the Las Vegas area.
The most recent forecast was released by Newmark Grubb Knight Frank Global Gaming Group, which is a company that is based in Las Vegas. Their 2013 forecast an investment guide stated that the strip will continue to grow, assuming that Congress is able to dodge the fiscal cliff, and keep the country from nosediving back into a recession. The group forecasted the growth of the total strip revenue at about 1.5%, or as high as 5.3% if the economy continues to grow. This year, strip revenue was up a total of 2.5%, which would put next years projections in line with the growth that was seen this year. Strip gaming win improved a total of 4%, up to a total of $6.2 billion in the year ending on September 30.
A number of casino operators benefited from the increase of visitation that Las Vegas has seen over the course of the last year, allowing many companies to grow their overall revenue. The overall Las Vegas visitation numbers showed a growth of 1.8% through September.
As of right now, the only huge addition planned and Las Vegas is the construction of the SLS Las Vegas casino and hotel on the former Sahara sites. This is going to add an additional 1200 rooms to Las Vegas, with an additional 650 rooms planned to be opened at the Downtown Grand at some point next year.
However, this does not mean that every single casino in the Las Vegas area has been able to benefit from the increased visitation. The cosmopolitan sold rooms for an average of $257 during the third quarter, up $233 from last year. That is an example of a company that has been able to benefit from the increased visitation in the Las Vegas area, while the stratosphere side huge dip in overall room totals from $50.31 to $48.99.
It will be interesting to see if Congress is able to avoid the coming fiscal cliff, and help to keep the country from nosediving back into a recession. Although casinos are nervous about what the future holds in Congress, assuming that they are able to avoid the fiscal cliff, huge growth is expected in the Las Vegas area next year. The Las Vegas growth is heavily tied to the average household income, which is expected to grow of Congress is able to avert the fiscal cliff. With such high increases forecasted if the economy does not go into recession, and such huge decreases predicted if the economy does going to recession, it will be interesting to see what happens next year.