DeathWatch V : VegasTripping Interview With Nick Christenson 2009

Turn Your Head and Cough Las Vegas, The Doctor Is In (again)

Posted by Chuckmonster

Las Vegas Casino Death Watch

VT: How do you see the Vegas casino biz changing over the next five years? What does the future hold for Echelon, Fontainebleau, City Center and Cosmopolitan?

Nick: Times will be tough. If construction isn't far along at this time, it's just not going to happen for several, perhaps many, years. I don't expect to see work on Echelon for three years at a minimum. Cosmopolitan is the most difficult case. The current owners don't have the stomach for operating a casino, and questions have been raised about its design, and consequently its viability in the long run. Fontainebleau and City Center are too far along. The way forward is shorter than the way back.

Nothing new will open without requiring refinancing. If the debt slate is wiped clean, I expect most of these places to be able to operate. That is, I think they can be EBITA positive, as the finance wonks would say. If they can't meet that threshold, though, either due to a basic lack of viability or due to worsening conditions, well, then there's the possibility that folks start nailing plywood over the windows, and that's not good for anyone.

Palazzo and Encore look like they're doing okay, although much of that may be due to the novelty of a property that still has that "new casino smell". Almost certainly not well enough to service their debt, but well enough to continue to be allowed to operate. Of course, once the additional rooms represented by City Center come online, things may change.

In the mean time, we will see continued belt tightening. The tension between service and cost constraints will be evident. Just a few years ago who would have thought that the casino management skill sets of Bob Stupak would come to vogue? Heck, he could probably make a decent living right now as a cost-cutting casino consultant. Within a few months, it wouldn't surprise me to see Gary Loveman bumming cigarettes from the blackjack dealers. The living may yet come to envy the dead.

VT: Thanks again Dr. DeathWatch for taking the time to chat with us!

Nick: It's always my pleasure.

For more Dr. Deathwatch, bookmark Las Vegas Casino Death Watch.

Nick's Picks 2008
Dr. DeathWatch Returns : Nick's Picks 2007
Boom Bust and Ba-BOOM : Nick's Picks 2006
Boom Bust and Ba-BOOM : Nick's Picks 2005

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Comments & Discussion

So, like..when is Bellagio going to get rid of the old tube TVs?

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