How Have Casinos Been Impacted By The Recession?
Published on October 19th, 2011 10:16 pm ESTCasinos are quite a cyclical industry.
When the economy is strong, people tend to book more trips to gambling destinations such as Las Vegas and Reno.
When the economy is weak, people tend to stay closer to home.
There will always be people who will gamble, regardless of the state of the economy.
However, the general population will tend to stay away from Las Vegas and Reno and Macau when the economy is in the toilet, as their disposable income is generally on the decline along with the economy.
Back in the old days, Las Vegas used to be phenomenally cheap. You could fly to Vegas for just a couple of bucks, hotel rooms would be virtually free and buffets would be available for just a couple of dollars.
All of this was done to get people into the casino.
These days, the Las Vegas business model has changed.
While there are still low-cost buffets and hotel rooms, these are largely the domain of the older casinos who are trying to keep their heads above water while trying to battle against the likes of the Bellagio's of the world.
The higher-end casinos have put more of a focus on more expensive dinners and shows. These additional revenue streams have become a crucial part of the business models of the higher end casinos.
The problem? Many people don't really feel like shelling out $200 for a dinner or $400 for a show when the economy is in the doldrums. Many people are tightening their pursestrings these days, and this has come at the expense of Las Vegas casinos.
In short - the global recession has had a massive impact on many casinos throughout the world. When people aren't flush with cash, they generally tend to stay away from gambling hotspots such as Las Vegas and Reno.
When the economy ticks higher, so will the fortunes of many Las Vegas casinos.
