What happened in Vegas?
May 6, 2008 by Tisa Silver
Filed under Finance
It’s official: The economic slowdown has arrived in Sin City.
Last week, Wynn Resorts posted a profit drop of 20%, while Las Vegas Sands reported a loss for the same period. On Monday, Tropicana Entertainment filed for Chapter 11 bankruptcy protection. Today MGM Mirage reported a 29% drop in profits.
Sounds like a string of really bad luck, right?
The good news (if there is any) is that it seems as if the downturn had already been priced into these stocks. Take a look at their performance over the past six months: Wynn Resorts down 14%…Las Vegas Sands down 37%…MGM Mirage down 43%!
Casinos were often believed to be recession-proof. If I were a betting woman, I’d say those days are over.
Yet another ripple of higher gas prices and airline contraction. Once this oil supply/demand curve sorts it’s self out, Vegas will light up again and so will the stocks.
Casinos can hardly be considered recession proof considering the increased costs in the economy which have affects on “luxuries”….during tight times money is spent with caution… more specifically on the necessities. Travel time and vacations are the most likely to be cut out first until a budget can be arranged. I feel commodity prices, more specifically fuel, has caused the greatest impact on the casinos.