(Screwed up the blog: this picture was supposed to be further down the page)Roughing it in Las Vegas; having crabcake eggs benedict at the Cafe Bellagio; right next to the conservatory, great food, great service. I think I could live in this place.
Oops, electrical problem; had to go to Vegas early.
Well, everything was going along on schedule (well, close). We had left Kanab and Zion and were headed to Bryce Canyon (and looking forward to it). We camped overnight just outside of Bryce and discovered we had lost our 110 a/c (alternating current). Could not find any circuit breakers or fuses malfunctioning; called Monaco (they made our RV). "Sounds like an inverter problem, see if you can get someone to check elec input/output". We have an electric inverter that does a lot of things, and has to be working to get 110 a/c. Got an electrician who confirmed our inverter was shot; our options: 245 miles north to Salt Lake City or 245 miles south to Vegas. Viva Las Vegas; we'll just go there earlier than we planned, enjoy the city, get back on track.
Got to Vegas that night, very warm; went to the rv dealer in the morning; they have to order the inverter; will take till next Wednesday (that day was Friday, and too late to send it out that day); so we checked into a motel for a week.
We must have gotten soft, but the heat was killing us (105 +); we did not do a lot of our outdoor exploring and decided we will do Arizona (supposed to be later in the trip) at another time. So most of what we did was inside (visit casinos, museums and hotels), which are very interesting here.
Here is our take on Vegas: the city is constantly re-inventing itself, with each new project more elaborate than previous; they must be making money, or they wouldn't keep doing this. With a background in high end retail, we enjoyed evaluating the designs, customer service and the ambiance of the different places. Frankly, we didn't enjoy most of the casinos (too smoky or too dark, or too noisy). Two major exceptions: both built by Steve Wynn; The Bellagio and Wynn. The man may be an egomaniac, but he sure can build a pleasant environment. I didn't want to leave the Bellagio; very creative/not imitative, music/sound system very pleasant, casino area, wide aisles, not smoky, chairs in front of the slots very comfortable, special feature rooms (conservatory in the Bellagio, delightful), heating/air conditioning well controlled (this is not all that common), casino people everywhere and very helpful (can't imagine their operating budget), great restaurants w/wonderful food and service, wonderful interior design (ceilings, floors, light fixtures, centerpieces, etc.) everywhere. We did visit the Four Seasons and the Ritz Carlton; very nice, but I'll take the Bellagio.
Other notes of interest; did you know that 85% of Nevada is owned by the Federal Government? Sen. Harry Reid has been changing that and with each new land change has been appropriating more water for the Vegas area from ranchers upstate. There was so much overbuilding of homes/condos here that realtors/banks have actual foreclosure busses taking people around showing them houses. May '08 real estate sales up somewhat from last year; 50% of the sales were foreclosures; yikes.
Bellagio was sold to Kurt Kerkorian (MGM Grand) a few years ago. MGM Grand, in partnership with Dubai is currently developing a massive complex right next to the Bellagio (wonder what they tore down to do this). Complex is on 76 acres, has several condominium buildings, 500,000 sq ft retail, casino and a hotel. Build out price? a measly $8 billion; on schedule to be completed by Dec '09. Wow! What kind of money comes into this city?
Saw a few museums (Liberace, sculptur named MacDonald) and went to the Red Rock Canyon on the West side of the city (nice, but after Zion and others, nothing spectacular).
Unfortunately, it was too freakin hot to enjoy anything outdoors. As soon as we got fixed, we headed for St. George, Utah.
Oh, our big gambling effort. Blackjack at the Ritz Carlton; came out ahead $20, whoopee.
Pictures of the conservatory in the Bellagio; big area, model trains running around the perimeter; change the displays often; the clothing on the bears above are all flowers; great music, intermittent arcs of water on the green planted area in the first picture; thought I was looking at Rose Bowl parade exhibits; lots of people there, in spite of it being low season for Vegas.
Bellagio lake right on the strip; dancing fountains w/great music entertain you in the afternoon and in the evening; our favorite restaurant, Olives, in the background; even in the heat of the day, you can sit outside in the shade w/water misters to keep you cool; had some wonderful meals there; great waiters/waitresses.
Reception area, check in desk at the Bellagio. See the check in area in the top picture? Wonderful lit up backdrop behind the desk. Probably can't see it well, but the ceiling in the background of the bottom picture is a fantastic mix of beautiful colored glass protruding from the ceiling; very artistic.
Another ho-hum ceiling treatment, this one over at the Wynn casino; couldn't do justice to these places. He's (Wynn) currently building another one next door called Encore, should be great.
Light fixtures at Wynn that Marlene fell in love with. "John, we could get some big clay pots and do this lighting in our dining room".
Reception area, check in desk at the Bellagio. See the check in area in the top picture? Wonderful lit up backdrop behind the desk. Probably can't see it well, but the ceiling in the background of the bottom picture is a fantastic mix of beautiful colored glass protruding from the ceiling; very artistic.
Another ho-hum ceiling treatment, this one over at the Wynn casino; couldn't do justice to these places. He's (Wynn) currently building another one next door called Encore, should be great.
Light fixtures at Wynn that Marlene fell in love with. "John, we could get some big clay pots and do this lighting in our dining room". 
1 comment:
Great BLOG! Hope you have time to visit us while you're way out West. I've cut and pasted an article in todays WSJ journal on Vegas...a little different spin.
- John David
Debt-Laden Casinos
Squeezed by Slowdown
By TAMARA AUDI and JEFFREY MCCRACKEN
July 1, 2008; Page A1
The gambling slowdown that began early this year is taking a serious toll on Las Vegas, with banks, investors and private-equity funds growing as tightfisted as the consumers who are gambling less in the slumping economy.
Once believed to be recession-proof, casinos are proving to be highly vulnerable to the economic downturn, which is striking the industry at a bad time. Las Vegas is entering its lethargic summer season, and a boom-time frenzy of grand expansion plans and private-equity buyouts has left casinos laden with debt.
Now, Wall Street is treating many gambling companies like a roll of the dice, with debt default or bankruptcy proceedings looming as possibilities for some companies as cash flow shrinks.
The industry is facing what insiders and analysts call its biggest challenge in years. Rising gasoline prices, the housing crisis and other economic troubles are prompting consumers not just to gamble less, but to spend less at the luxury boutiques and restaurants where casinos draw most of their profits. Struggling airlines are cutting service to Las Vegas. And pressures are building on casinos that cater to local residents, who have been hard hit by economic troubles.
"This is the toughest environment we've faced," says Gary Loveman, chief executive of global gambling giant Harrah's Entertainment Inc., referring to the economic challenges roiling the entire industry.
Casinos are being pinched by less access to cash as they grapple with predownturn expansion plans and billions of dollars of debt. Turnaround and bankruptcy experts say they are getting more calls from casinos than they have in years.
"The volume of interest in casino turnarounds and situations has dramatically increased in the last three months," says Tuck Hardie, managing director in the restructuring group at investment banking firm Houlihan Lokey Howard & Zukin. "The economy has fallen hard, and to a magnitude people didn't anticipate. There are development projects that are having trouble even getting construction financing."
Several casino companies have defaulted on debt or have sought bankruptcy protection, tripped up by costly land acquisitions and ambitious new development. Kentucky-based Tropicana Entertainment LLC filed for Chapter 11 bankruptcy protection in May, defaulting on $2.67 billion in bank and bond debt. Greektown Holdings LLC of Detroit and Illinois-based Legends Gaming, which has casinos in Louisiana and Mississippi, have also sought bankruptcy protection.
Other companies are sweating under debt agreements that require them to maintain minimum levels of cash flow, even during an economic drought. The public-debt market, spooked by four casino bankruptcies this year, reflects the concerns. Bond prices for a half-dozen casino companies, from Harrah's to small, Las Vegas-based Herbst Gaming, are trading at distressed levels, frequently below 60 cents on the dollar, on debt totaling about $5.3 billion.
The credit squeeze is bad news for companies in the midst of multibillion developments in need of more cash. Analysts say an extended economic downturn threatens to hurt the industry for years to come. Companies that postpone or halt property upgrades and maintenance could find it more difficult to lure customers and to charge premium rates for hotel rooms.
Shares of several gambling companies have tumbled dramatically this year, washing out billions of dollars in market valuation. Las Vegas-based Boyd Gaming Corp. has fallen to about $12 a share, a five-year low, from a high of $54 last summer. After topping $98 last fall, shares of casino giant MGM Mirage now trade below $35.
The public debt of Harrah's, which is highly leveraged after a $17 billion private-equity buyout last year, has traded as low as 52 cents on the dollar. Mr. Loveman, the chief executive, says Harrah's is profitable and is not in danger of default or a bankruptcy filing. The company, he says, is spending money to expand and improve existing properties, and is boosting visits to its regional casinos by chartering airplanes to fly in loyal customers.
Hard Hit
Credit-rating agencies have been hitting casinos hard. Moody's Investors Service, which rates $79 billion in debt at casino companies, has downgraded 17 casino companies this year. Eleven more are on review for possible downgrade, from small but storied Vegas names such as Golden Nugget to regional players like Penn National Gaming, which has 19 casinos, racetracks and riverboats across the Midwest and South.
"The casino industry is in the midst of what could be its most severe downturn ever," says Keith Foley, who covers casinos for Moody's. "After 9/11, everyone thought Vegas was immune to just about anything, and it is suddenly obvious and maybe kind of scary that it is not."
Mr. Foley tracks 55 gambling companies with combined revenues of about $52 billion. "The sector has grown up and is more susceptible than ever to economic downturns," he says. "Six months ago, all the bankers loved them. Now they are tightening up credit and terms on them."
Late last week, J.P. Morgan Chase & Co. casino analyst Joseph Greff lowered his estimates for operating cash flow for the industry's major players -- MGM Mirage, Las Vegas Sands Corp. and Wynn Resorts Ltd. -- because of what he wrote was "an unprecedented lack of visitation and spend-per-visitor visibility." Mr. Greff wrote that investors don't fully realize "the magnitude and duration" of the downturn.
Dangerous Situation
The gambling industry has survived economic famine before. But the current consumer-driven downturn, coupled with a recent industry shift away from gambling and toward luxury amenities, high-priced entertainment and dining, has created a dangerous situation for Las Vegas.
The problems are weighing heavily on gambling companies that cater to the local Las Vegas population with low-glitz, high-profit casinos built away from the tourist zone known as the Las Vegas Strip. Those companies thrived on the boom in southern Nevada's population, as families flocked to the area for jobs in the casino industry. But now those customers are holding back, pinched by a housing crunch and rising unemployment.
In April, revenues at casinos that serve the local market fell 9.5% from the year-ago period, according Mr. Greff's analysis of Nevada records. By comparison, revenues at casinos on the Las Vegas Strip fell 1.3% in April.
Among those hard hit by the local decline is Boyd Gaming, started in 1975 by Sam Boyd and his son, Bill. The publicly traded company is bidding to become a big player on the Strip, via a $5 billion casino development on 87 acres. The project, called Echelon, is slated to include five luxury hotels, a retail promenade and an exposition center.
Boyd is committed to funding $3.3 billion of the project, through a $4 billion credit line and its own cash. Despite the economic pressures and project costs, company officials say, Boyd has solid cash flow and a strong balance sheet. But Boyd has had to rely more on its credit facility as profits wane. Boyd reported a $32 million loss in its latest quarter.
The company carries $2.4 billion in debt. To complete the project, it is trying to secure more than $1 billion in additional financing with two joint-venture partners.
On Thursday, Standard & Poor's Ratings Services downgraded Boyd to negative from stable, saying the "failure to secure financing in the near term could pressure the company's ability to meet its targeted completion" for portions of the project. If the opening, which is scheduled for 2010, is delayed, it could "strain the company's ability" to generate enough cash to remain in compliance with its bank covenants, the ratings agency said.
A spokesman for Boyd said the company is currently negotiating a financing package for the bulk of the additional funding. "We feel really good about our ability to finance that part of the project," says spokesman Rob Stillwell, referring to a $950 million loan to develop two hotels in conjunction with Morgans Hotel Group.
Mr. Stillwell says Boyd hopes to secure the funding sometime this fall. "Assuming we get it done this year," he says, "it will not impact our opening plans."
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