GLG News by Ron Lodge

Implications: Is it beyond possibility to get the Tropicana Atlantic City back under their control? How would the recapture of this property help the outlook for the future of Tropicana Entertainment? Will the New Jersey Gaming Commission really look favorably on this possible return of this property to Tropicana Entertainment hands?

Analysis: What is the future for Tropicana Entertainment to get their property back in Atlantic City? It is important for the new management staff at TE to focus on their plans for the future. It would be a real feather in the cap of Scott Butera ( head honcho of TE ) to get this hotel casino back in their hands. It would allow many opportunities for them to either bring this property to top notch form or even put it on the sales block to bolster other projects. They are not the best financed company, however, their management team is very strong and has a feel for the gaming industry and how to succeed. It is a much better company now that former decision maker Bill Yung has been asked to move on to other things and allow those in the know to operate this company.

There are certainly many items that the New jersey Gaming Commission will consider prior to allowing this return to Tropicana Entertainment. Will they have the funds to get this property back into it's place in the AC industry? Can they survive the business downturn that has affected all of the properties in Atlantic City? Are they the right management team to do the things needed to make a successful transition into this market. Having said all of his, it is my opinion that Mr. Butera's team is solid and certainly will be able to handle the challenge. They have the know how and the ability to bring this property on a solid basis. Do they have the dollars to survive the downturn - it remains to be seen. If there are other interested parties out there, why have they not made the deal. It's is time to get the appointed Receiver out and let a casino/hotel entity run the property. Is Tropicana Entertainment the one to accomplish this task - I think so...........

Implications: What benefit to the State of Florida would be closing several hotels and casinos? The loss of jobs, revenue and other valued assets is outlandish. The Attorney General must need some economic tutoring - he is way off base - could there not be other ways to approach the situation the Seminole's face with full blown Las Vegas style gaming?

Analysis: Here is the rub - The Seminole Tribe has seen fit to establish Las Vegas style gaming on their properties. It came with the blessing of the Governor of that fine State of Florida. The Governor being right or wrong does not seem to matter. He has allowed this to happen and apparently agreed to a multi year contract with the tribe. It is hard for me to see the difference that full blown gaming can make to anyone with any gaming knowledge. It is surly a mistake for the AG to request that the U.S. Government should even step into this matter. It looks more like a matter of the State making those decisions with the Seminole's. Sounds like a good time to make a political football out of this unfortunate situation. 

There is middle ground to be found in this problem. There are to many issues that factor into closing large business. I know that this is a vital question to the AG, however since our government has deemed to make Native America Tribal lands sovereign property - it would seem that these properties going into LV style gaming should be their business with the blessing of the state they are in. Seems like the Governor has given that blessing. That was the time for the AG to bring the matter up for discussion - not after the fact. If you have read past articles that I have written, I don't always side with the Tribal entities. In this case I don't think that because you have a pass by our government, we should allow any tribe to just do what they want without justification. Seems to me that the Florida Governor has justified this move by the Seminole's......... Let it go Mr. AG....

Implications: Will the play in Macau continue to give a big boost to American based companies? I am sure, that as the market starts to recoup you will find added interest in this area of intense gaming. I can't think of another place that creates as much dollars invested by players on a regular basis. It's what is keeping some of the top gaming companies looking better than expected during the business and economic drop.

Analysis: Wynn Resorts is one of the major players in the Gaming Industry. They have prospered during this business bust mainly because of their cash flow from Macau. It's has been a solid source of keeping many companies afloat during this ugly economic period. We have been over this trail before and keep coming up with the same answers - some major gaming companies would not look as strong as they are without the cash cow in China. Don't get me wrong, it's outstanding that Wynn, Sands and MGM has invested into this arena and came out on the right side of the coin. Without out this investment they would certainly look a lot worse for ware during this sad turn in our economic situation.

I, as all, hope that the fix may be in, and we can look toward an upturn in the Market, housing, loans, construction and jobs. Regardless of how we place the blame, we need to address the problems that got us here. I hope our government has finally gotten to a point to know what is on the taxpayers mind to fix what is definitely broken. Hope it works. No doubt the gaming industry will survive as they have always done in past recessionary periods. It's a matter of time and some wise decision making..........

Implications: Tourists restrictions in general usually will help bring more interest to an area. In the case of Macau, the Chinese powers to be seem to be hurting business. What's their plan - there is to much investment capital invested and planned to be invested for the government to be brainless in this matter. It does not say much for the top decision makers and their business and marketing prowess.

Analysis: Just where may the government of China be headed in the case of Macau Tourist Restrictions? It would seem to the average observer that they either have a bone to pick with Macau or one or two of the properties - they just don't get it. Seems like the old cliche of cutting off a nose to spite a face. I don't think that the government there has given a suitable answer for these problems they are creating. Not only do they hurt Macau, but I would think guests going to China might take a second look regarding their travels there. We all know they have almost always been a bit stuffy about tourism in their country, however it does bring in substantial dollars.

Since American properties opened in Macau they have been a vital source of income to their parent companies. It's has been apparent that they are substantially helped in their bottom line. It has added great cash flow and also added additional investment in the territory of Macau. These American based companies have been able to stem the tide during this business downturn. No easy task. The numbers are a bit off at this writing in Macau, however the overall picture seems to still be very bright. I don't know when China will see fit to lift these unreasonable bans from gaming arena. It may be time for them to take a step back and let the Macau authorities govern their own tourism problems. 

Implications: The closure of an auto dealership in general is no big deal. The loss of many dealerships under the same banner can't be a good sign. The trickle down effect of losing jobs could hurt gaming in the local market. Loss of income means less people at the gaming table and slots. We can hardly afford more problems. 

Analysis: Here is the problem - can we, as a community, absorb more people out of jobs? I am aware that the Losing the two Bill Heard Chevrolet dealerships should not hurt the auto industry in Las Vegas to any great extent. It the side effects that have more meaning. Since I cover the gaming industry, it's always of great interest when a company goes out of business. The basic problem is loss of employment for many people and the direct loss to gaming, retail and other industries that are trying to keep their heads above water during this rather sorry time in our economy.

We are all aware that the local gaming companies are trying to do all they can to keep interest up in their properties. I see less people players in casinos and they are playing less dollars and spending less time doing so. That is a lot of less. It all adds up to an off business market. So, after laying out the doom and gloom, when can we expect to see that bright light at the end of the tunnel we are all looking for? Depends on who you are speaking to. Many in the industry are looking for an upward turn sometime prior to the end of the first half of 2009. I am a bit more conservative. I look for better times toward the 3rd quarter of 2009. That does not mean a complete recovery. There are some factors that will put a good light on 2009 - the opening of Wynn's Encore and the expectations of CityCenter opening should draw lot of interest and add some needed pizzazz. I am also hoping the Boyd Group will see fit to start building Echelon again in the early part of 2009. The Elad company has kept us in the dark as to when they will put the first shovel in the ground of the new Plaza Las Vegas. So, there are lots happening the end of this year and in 2009. It should be a terrific boost for the gaming industry and the economy.

Implications: Seems that the only way most companies can cope with business being off is to cut payroll. Laying off good staff member is not the way to go. There are other measures that can be worked out. How much will these reduced staff actually help IGT,  and is it premature to think that there is a break in the gloom and doom coming in 2009?

Analysis: I have always advocated that when business is bad, laying off staff may not be the only way to go. Having been in the gaming business for more years than I would like to admit, I have seen many such drops in business. I have always liked to aske employees if they would like early retirement. Those that did not would not be layed off. They would, however,  have reduced work weeks. It seem the best way to keep staff in place and the morale from crashing. It also makes it easier to maintain the top shelf service customers always demand.

I am sure that there is some fat at IGT. There always is and I don't have a problem giving furloughs to staff that are performing duplicate functions. My feel is this is a great time for IGT to cut this fat and try and maintain a leaner and more efficient business profile. It seems that companies always want to have their staff at a higher level than it takes to keep business running in the correct and efficient manner. The bottom line always seems to take precedence over other details. It's the way way it should be. IGT has been a leader in the slot industry for many years. They need to maintain their market share even when the gaming industry is in a downturn. This will not be a lasting situation. They will have their day in the sunshine as will the rest of the gaming industry. It just a matter of timing..................

Implications: How will this beautiful new mega resort affect the dynamics of the Las Vegas gaming industry.? Will it start a trend as the Mirage did when it opened in1989? Can other top properties keep up and expand to keep up with this new trend? 

Analysis: Seeing that costs for building have rise over the $9 billion mark for the CityCenter project, it seems that there is no end to cost overages. I am sure that MGM/Mirage would love to get this project finished and see the light of some hard dollars coming in and not going out. Nice plan, but reality is that opening is still down the road a bit. The one bright spot is that the sale of the condos seem to be doing better than other condo projects that are on the strip. The numbers for construction of these boutique hotels, condos and hotel casino are high - they might even go a little higher prior as opening day approaches. Not an unexpected scenario I would suspect.

I am much in favor of this outstanding project by MGM. It's is my thought that this will be the start of a significant new skyline for the strip. It should make other hotels keep up their standards if they want to compete in our growing industry. Business in general has not been the best for the gaming properties over the past 18 months. This down turn will not last forever. Many are predicting some upward movement by the middle of 2009. That is not to say the downturn will be over - they are saying that we will start seeing signs of steady improvement and a move to getting the economy back to some type of normalcy. I do hope they are correct..............  

Implications: Can California Indian gaming have the last word when dealing with government and it's representatives. Why such a big deal over charity gaming? It seems as though the Tribes already have a pretty solid monopoly.

Analysis: We are all aware that money talks and holds many in captive positions. I don't really fault the casinos for placing there priorities ahead of the regular citizens. It their right. So, tell me what are the rights of the charities and others trying to solicit funds through charity gaming. By the looks of things in California the tribes have lots to say and those without the financial muscle fall to the side of the road. All can't be fair in this situation. To be very honest the entire story is probably not being told. It's not that I fault the casinos for trying to keep all gaming under their banner, however, it may be getting time for the citizens of California to vote on opening gaming up for all that want to be in this vital business. I do appreciate the tribes right to sovereignty and self government. They do provide some serious funding for the state. It may be a better lot to allow the gaming industry to thrive on it's own merit and not keep this lucrative business for just the Indian Nations. It works great in Nevada, New Jersey and other places. Why not California?

It's not a easy suggestion, however, it certainly some food for thought. Competition really doesn't hurt. It usually bring out the best in the competitors.

Implications: This property construction was started prior to the drop off in business. It's not the best scenario for an opening, however, it should stimulate some new business for this company. It's in a rather new residential area and should help the community it serves very well.

Analysis: I have visited Station Casinos several times over the past few months. I feel that their standing in both the Las Vegas community and the local casino industry deserves some additional comments. The soon to be opened Aliante Stations Casino is another joint venture with the Greenspun family. The Greenspun's are also partnered in the Green Valley Ranch on the complete other side of town. To date a seemingly good marriage. They are also the owners of the Las Vegas Sun newspaper that comes attached the Review Journal, Las Vegas's main paper.

It would seem to the casual observer that the opening, in a couple of months, is a bit premature. Having a rather down economic view of this area over the past year it would seem there would be better times to open. The truth of the matter is, every day that Aliante Station is closed is a day that revenues are going out and no dollars are coming in. Just as a side note, the new East Side Cannery will be opening this week on the Boulder Hwy gaming corridor. It should do a good job and bolster both Sam's Town and Boulder Station casinos just down the street. The original Cannery hotel is located in North Las Vegas and will be in direct competition with Aliante Station. They are separated by about three miles, but still a factor. The competition will certainly keep both properties on their respective toes.

Aliante Station should make a solid impact on the community. They are bringing many new restaurants, entertainment, movie theaters and gaming to an area that needs new business. There are plenty of home surrounding this new project and no doubt they will support a new hotel/casino in their back yard. Stations has a habit of picking the right area to place their new properties. The next on their list will be Durango Station Casino. We wait with great anticipation the opening of both new casinos..............

Implications: New top man at Tropicana Entertainment, Scott Buterra, has handled his new duties with efficiency and care for employee's.  A good start for a company that had it's head buried in the sand since being purchase by Bill Yung in 2006. Even having paid more than market value for Tropicana Entertainment, with expert management there could have been light at the end of this dark passage way.

Analysis: It seems appropriate to revisit the Tropicana Entertainment situation. I am very happy to see that the Tropicana Las Vegas just recently settled their major union problems. It will certainly will go far to show that they have reached a serious start to making this property a successful entity on the LV strip. There is plenty left to be done to get the Trop back on a proper footing, however, it seems new management is serious about seeing things happen for this once grand hotel and casino. It all starts with the first step and it seems thy they have reached that goal. It certainly will not be easy for them to renew confidence in their customers. It did not take long for them to beat this property in ugly submission - it will take a bit longer to show they have turned things around and are looking to raise all levels of doing business. It is my impression that the new managers have some solid goals in mind for this hotel. It will need all the help it can get from them. The restoring of good relations between management and general staff certainly needs a kiss and make up policy. It looks as though they are correcting past indiscretions and trying to make amends to their staff employee's.

I do think that Tropicana Entertainment can be lifted out of the ashes and put back into the main stream of doing business in the proper manner. It will take some time, but with real effort and exacting management they can have this company off their duff and back to a respectable position in the gaming community.

Implications: Is it my imagination or does China not have both oars in the water? Why try and curtail the profit structure of a very viable industry serving their country well? It's time that the policies of China work to help industry rather than hamper it. Hard to figure their motives...

Analysis: So the Sands people said things in court in the U.S. that did not set well with the top government honchos in China. It was case of he said, we said and our courts sided with the Chinese business person - not the Sands - by awarding him $40 plus million dollars for his efforts on behalf of the Sands. It's business, not a way to make the Government of China to lose face.

Visa restrictions are a very foolish way to try and give Adelson a slap for his supposed indiscretions. Mr Adelson has done quite a bit to enhance his presence in China and should be rewarded for his efforts, not slapped on the wrist. Not only will these travel restriction hurt the Sands but other properties that depend on the additional traffic to maintain their market share in a highly competitive arena. I would hope that the real power behind what is going on will have second thoughts and look to the future of this thriving gaming and resort capital called Macau. American companies have a large stake in this area and are planning to add to the development in  the resort and gaming industry there. It's really does behoove the Chinese authorities to take a step back and embrace what is happening to Macau - interference only holds back progress.

Just one more thought, this may not have been done with Sheldon Adelson in mind, but it does have a smell of pay back to it. These type of restrictions are never good for business, maybe it's time to rethink these holds on tourism........

Implications: Having been an avid fan of Station Casinos for quite a long time, it always distresses me to see negative reports concerning them. Their second quarter reported loss does not seem to be outlandish. They have many thing on their plate at this time. The cost of doing business continues to rise as the affect of the economy continues to hurt the bottom line. When will gaming we see the light???  

Analysis: The truth of the matter is, Station Casinos is a sound, well run company that has fallen into the same problems that face other major resorts. The economy has a bad smell and seems not to want to rebound as quickly as the industry would like.  Everyone has been feeling the loss of room count, drive in business and general lack of enthusiasm on the part of vacationers. The lack of disposable income has hurt the general traffic into casinos. Guests are staying closer to home until there is a greater feel of recovery among the casino trade. It's not hard to see, that since room count is down in many properties, it only stands to reason that food and beverage, entertainment and retail will also feel the drop in revenue.

So, what does the future have to offer hotels like Stations and strip properties alike? Many of the suits are predicting that the recovery will come early in the first quarter of 2009. I hope they are correct. It looks more like the second quarter to me. Regardless of the timing, it will end and the future is bright for gaming. Some major projects have been placed on hold. Boyd group has decided to stop construction of the mega resort Eschelon for about a year. They are blaming short money supply and high cost of the loans. The Elad Corporations has also announce that they will hold off the start of construction of their Plaza Hotel complex until dollars are more available at better rates. Really not bad judgement on either companies part. The City Center by MGM continues to move along and so does the Encore by Steve Wynn. The Encore is scheduled to open during the last quarter of 2008.

All in all, gaming is off a bit, the numbers are not quite as soft as they could have been. I do look for some relief starting 2009............

Implications: Money has a way of raising concerns for most new construction in Las Vegas. Colony Capital will have to make the decision along with their partners ( the Fertita family) if the timing is right for early 2009. The money is there, however, will they pay the inflated price to get financed? 

Analysis: Station Casinos is a good, viable and strong company. They have good leadership and excellent staff that maintain the daily course of doing business. Their ability to run a property was never in question. It may be premature for them to consider new construction early in 2009. They are getting ready to open another new hotel and the timing for this is not the best. Their new Aliante Station was started prior to the business downturn and they were obligated to get it open regardless of how business was. It may not be their best opening, however, with some time this will be a very good and profitable hotel/casino. It's in a very solid area just north of downtown and very convenient to the Las Vegas speedway. The planned Durango project was announced some time ago and seemed to be hanging in limbo. Their decision to start construction in in 2009 was a bit of a wake up call as the money lending market is rather soft. The make matters worse, construction costs have been steadily elevating. It's a tough combination to be up against. It would not shock most insiders if they decide to delay putting that first shovel in the ground.

The powers to be within Station Casino have always used wise judgement in the past. I feel that they will take full advantage of timing to start this new property. They certainly are aware that we will eventually see a rainbow in the business recession. Hopefully it will come,as most think, during the first half of 2009. With that in mind it may be their feel that by 2011, all will be well again with the economy. Maybe............

Implications: With the economy in a short fall downturn can the opening of a new Las Vegas resort help or hinder Wynn Resorts? What will the effect of this new property be on the bottom line. When we see an up turn in business will it be enough to ward off declining room inventory??

Analysis: I respect Steve Wynn's efforts to always improve and expand his holdings. Through no fault of his, the opening of his new hotel will be during a period of solid downturn in business. The construction of this property was started well in advance of this downward move. The performance of most hotels in the Las Vegas gaming market have seen some hard times. Wynn is no different. The good news for this company is that they have an enormous cash cow in the form of Wynn Macau. They are in the process of adding on to their holdings there and that can't hurt their image, not to mention cash flow.

The addition of the Encore will certainly help Wynn with their numbers, however it remains to be seen if they can keep both The Wynn and the Encore at a respectable room count level over the next eighteen months. The Encore should open sometime in December of 2008 and add a big splash for the end of the years holidays. I don't think that Las Vegas will see a way out of this recession pattern until the second quarter of 2009. Some have predicted the 1st quarter to see some light at the end of a rather dreary year. I hope they are correct. Understand, that because we may see some good signs during the early part of 2009 does not mean all is healthy in gaming. It will take some time to recover - a dollar lost will always be lost. The point is,  to make the very best the economy allows during the growth period and make a strong effort to keep the numbers some what respectable prior to recovery.................

Implications: The effect of taking certain aspects of sovereignty away from the tribes could set off a very large legal battle. How will this affect the bottom line for these casinos? Is there a compromise in the offing and if so when?

Analysis: What's the point of giving Native American a special place to operate their business and then taking it away. The fact of the matter is,  their lands have been cited as Sovereign Nation Status. It is what it is. This conversation about how to treat tribes on their own land has been going on for years. We need to stay out of their hair and let them thrive without government or local interference. They seem to be breaking no federal laws and it seem that our courts should not step in and make  decisions for them. If laws are to be changed and the tribes are to be dropped from their National Status, it's up to Congress to decide this matter. I have no problem with the tribes being treated like all other business people when the participate in gaming or other operations off their ancestral lands. This does not seem like a problem that needs a brain specialist to handle, however there could be some serious fallout from it if we continue to meddle in their affairs.

The point is, should the tribes be Sovereign or not. It's not a question for me or you to answer, however, they are and they should be treated sovereign until it's determined by our Congress their status once and for all. We need to leave the tribes alone as long as no federal or state laws are being broken............

Implications: Will the ending of this private take over of Penn National improve their stock. Peter Carlino, head man at Penn national thinks they will buy back some of their stock, invest in new properties and generally put Penn back in the plus side of the of the of the profit sheet. Could happen!

Analysis: When this take over bid by Fortress Investment Group and Centerbridge Partners was announced, it seemed like a good deal for both sides. PNG stock was floating in the neighborhood of $60.00 a share. It was fluctuating a bit, however, not by much. When the private buyout was agreed upon it did not seem much of a reach when they settled on $67.00 a share for the purchase. It was a win/win proposition for Penn National and especially Mr Carlino's, family trust. They would have still remained in an equity position and in controls of operating the company. It certainly seemed like a good marriage for both the buyer and the seller. It was my thought, that the only prospect for default in the proceeding would be if FIG and CP may have not been able to get the funds needed to complete the transaction. They also had to maintain enough capital to run the company for a period of time needed to see profits get on better level.

There is no doubt that as Penn Nationals stock dropped from that high $50's mark, the economy sank into a recession, fuel prices out of control, added unemployment and housing in the dumps - there were second thoughts. It's not hard to figure that the buyers had some other ideas as it was getting closer to signing final papers. The stock was dangling in the mid to low $30's and the offer of $67.00 per share must have seemed like a far cry from when the offer was originally made. It also was more costly to borrow money and it seems that they felt that the first loss is the best - it was time to make other arrangements.

Penn National will receive $225 million in breakup fee's - A $1.25 billion dollar interest free loan from the buyers. Not a bad haul for PNG. It remains to be seen, if the buyers are completely out of the picture. I am sure that they have an option to come back at a later date and make another offer. It may not carry the same weight as the original, but who knows?....... I hope that there are good things in store for Penn National. They are the third largest gaming company and hopefully will continue to prosper.

Implications: The Aliante Station will make a decided difference for this area in North Las Vegas. They are a very strong company managed by knowledgeable people. There is high expectations are that this new property will be one of their best.

Analysis: To say that the timing for this opening is a bit premature might have some people wondering if the business downturn will hurt an otherwise terrific property. I think that most will agree that management did not contemplate this type of recession to fall in line with their grand opening. Having made that statement, it's my view that even though there is a short fall in business, it has not affected the local trade as much as the the tourist business that generally stays on or near the strip. Having spoken with some local executives recently regarding this period of downturn, they all seem push the same message. The head count has remained pretty constant - they noticed that the guest stay is shorter and the total sum of dollars played at any one visit is smaller. There were no exact figures given, but the feel was that they were off enough to institute more customer incentives to keep their numbers at a respectable level. I have seen more advertising, food and beverage given away and a general boost in the REWARD SYSTEM. It's part of doing business - it's costing a little more to keep the customer coming in their properties.

The partnering with the Greenspun family is not a new procedure for Station Casinos. They have the same type of relationship in their Green Valley Ranch location. It has, from our information, been a successful marriage. It's not hard to see another property coming along with the same people involved. All in all, Aliante Station should be a great success. I can't see anything at this point getting in the way of making a big hit with the local trade. I don't foresee much in the tourist end for this property for a while and with a short number of rooms, they probably anticipate the same. They will, however,  be a good source of rooms for the time there are some big events at the Speedway. This property is just a very short drive from there. I look for terrific things for Aliante Station and am looking forward to their opening in November of this year..................

Implications: Has the community taken the time to actually weigh the plus and minus features of having this property built in their community? Looks like the few opponents have taken it upon themselves to hold up progress. It's seems that tribal land has become untouchable entity when it comes to our laws. It is the way it is, there must be some meeting of the minds to allow this casino be built.

Analysis: Why so much heart ache about building this Indian Casino in the San Diego area? The story of crowded roads, high crime, loss of income to gambling and other problems have always been part of the nay sayers vocabulary. It's time to either allow the Indian reservation land be sovereign or to make them a part of the community and State they reside in. It's would be a hard pill to swallow for the Tribes to make changes to their rights at this late date. I have been opposed to a Tribe or Tribes being allowed to purchase land and say it's ancestral land and  that hey be able to do as they wish on it. I do, however, favor them to be able to carry out their wishes on the land that has always been theirs.

I understand, that some in the community have expressed their opposition to building a casino property in this community. They have seen fit to invoke the old Crime and heavy traffic and undesirables moving to their neighborhoods. I must confess, I visit many of the California reservation casinos on a regular basis. I have had little traffic jams, no real jump in crime numbers and communities prospering by having these properties near by them. I understand that all is not peaches and cream, however, these casino/hotels offer employment, insurance and a general livelihood jump for those employed. It also has a good trickle down affect on the community in their retail and general business outlook. When I look at Pechanga, Barona Ranch and others it's seems to me that they are only enhancing the areas they serve rather than make them look shabby or otherwise not conducive for a community to be proud of.

It certainly is my hope that the powers to be a not swayed by non threatening hotel/casinos -  because a few disagree or have been anti gambling for reasons only they seem to know........

Implications: Are there going to be more layoff's in the hotel industry? Will the major chains be able to weather this short fall? Where does this leave the smaller independents? Is there going to be a rainbow in the near future - how long will this last??

Analysis: The hotel industry throughout the country face some hard decisions in the very near future. The most important one would be how to maintain room count and their bottom line. Some in the industry are finding it necessary to offer discounted rooms. I think it may soon be the rule rather than an option. The actual cost of maintaining a room per day has not risen to unbearable costs. So where can the cuts come from - not to hard to figure. It will be with the furloughs of employees until business gets back to where it should be. The larger chains have the advantage over the much smaller and independent hotel and motel properties. It will become especially difficult for the road motels to survive with the cut back in auto travel and the high cost of fuel. The fact is, all cost are up and not easily covered by independents.

I not sure that anyone has the quick answer for this downturn on the hotel and leisure industry. In a recent article, I wrote about the Las Vegas hotels going into the room discount mode. They are making a strong effort to add additional rewards to their customers for coming to their properties. These are coming in the form of gasoline discount, food & beverage specials and room discounts. There have been some layoffs in Las Vegas, however, in order to maintain their staff some properties have opted for day cutbacks. That is, reducing the work week to three or four days, thus saving the employees from a temporary furlough. A better scenario, I suspect, for both employee and employer. The hotel industry in general will have to look a bit harder into these type of incentives.

This will not last forever - Having spoken with several executives in Las Vegas over the past few weeks, their general thought is that they expect the recovery process to come sometime in the first quarter of 2009. I hope we see some good improvement by the second quarter.

Having said all of that, I am very pro hotel and leisure industry - There will probably be some casualties, however in short term they will have to find ways to get through this downturn. In the long run the industry will survive to smile another day...........

Implications: The benefits to the Nevada casino industry to offer more incentives for both tourist and locals to return to past numbers is vital. The business downturn has taken a toll on all properties. The thought of sitting on their hands to see if business will return on it's own will not produce results. It is an industry wide dilemma that needs to be addressed. 

Analysis: There is no need to tell anyone that there is a recession, downturn in business, depression or any other name you might like. It's a matter of trying to keep business on the most even keel possible during this disturbing period. Will the gaming industry survive this period? Yes, this is one of the most vibrant industries - it has always rebounded from these type of markets downturns. Will they be able to recover all the dollar losses during this low time? - not necessarily. The thought, is not to recoup at this point, it's to try and maintain their position in short term. Most hotels are offering different incentive for their customers to make it more palatable for them to return to their favorite casino. I have see offers of gasoline vouchers, room rate reductions, food and beverage discounts and entertainment specials. Some Las Vegas strip properties have even given special rates for locals to come and vacation at their hotels instead of traveling out of town. There is no doubt that these offers will help, however, some of the higher end properties, though offering special room rates are still on the top end of the pricing spectrum.

I am not sure that anyone has any real answers for poor business outlook. I am fully in accord with the properties doing all they can to help bring tourists to Nevada. Remembering that this is not just a problem in Nevada - other venues are doing some of the same ideas to try to increase their bottom line. These incentives and adjusted Reward Programs are not the answer all for the hotel. It is, the ways to help create interest in this industry for the immediate future..........