Unbelievable, what has happened in the past 3 months. LV Convention Center cut many employees and are not expecting many conventions for a long time. SEMA in October, is up in the air and my insider suggests they don't want to open till CES in January. The current casino openings scheduled will be Wynn, but not Encore ASAP. MGM will open NYNY & Bellagio in June 2020 followed by Park MGM (the old Monte Carlo, next to T-Mobile) in October. The MGM Grand is Jan 2021, Luxor Mandalay Bay in March or April 2021, Aria in August of 2021 followed by Mirage in November of 2021. Of course, all will be adjusted based on occupancy and earnings +/-. Red Rock Resorts formerly known as Station Casinos for those that like the off Strip properties will open Red Rock, Green Valley Ranch, Sunset Station, Palace Station and Wildfires. Fiestas, Texas Station and The Palms have no opening date. It seems The Palms is for sale. Not good for Red Rock Resorts, since they purchased Palms for $312M, did a terrible renovation for $690M and now will keep closed. Glad I left my position as a Pit Boss 10 years ago.
Local restaurants that offer curbside food, have survived, but many owners may be closing soon. Having two chefs, a waiter delivering food curbside and a person answering the phone is fine. But, opening at half capacity when there is already small margins will not work. My insider at Hakkasan Group doesn’t think the nightclubs will reopen till Spring of 2021. The days of Rehab pool parties and people everywhere are over. All golf courses are back open. I played LV National last Friday and you get your own cart and there is a noodle in the hole. I play Aliante & Sienna over the weekend.
The ER’s are not crowded with COVID patients and we have not seen major pressure on the hospitals. The Convention Center and Cashman Field were prepared to be overflow and didn’t need to be set up. Valley Health Systems which operates Summerlin, Centennial, Henderson, Spring Valley ER and others is cutting their employee hours for the second time. There just isn’t many patients coming in for COVID or other concerns. Bloomberg had an article about the owner KKR and declines in business of 65% - 75% nationwide and it is the same here in LV.
Obviously, there will be a slow recovery. The casinos may only have a day shift and swing shift operating table games. BJ will only have 3 players, Roulette 4 players and Craps 6 players per table. I wouldn’t be surprised if the casinos added a touch screen in place of chips and ticket in ticket out procedures for table games as they have for slots. The remaining employees will go back to different shifts and most likely partial hours and be glad to have them. Lots of middle management will be unnecessary and let go. MGM laid off half of their casino Presidents. I have seem a significant reduction in home prices, but I’m sure with forbearances and other systems put in place by US Gov’t has slowed it down. I wouldn’t be surprised to see a mass exodus of population, since tourist industry and construction are such major players here in the valley. I would estimate 200k could leave. It will be interesting to see how many kids show back up to private schools and the Clark County School District in August. The real details will be in August of 2021 versus August of 2019.
Hopefully, the Raiders and Golden Knights will bring tourists back. As for now, I’m enjoying the very light traffic during rush hour, awaiting sports to start back up and watching for investment opportunities. Good luck friends!
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