LAS VEGAS -- If paper profits in the stock market fueled trips to Las Vegas during the bubble years, then the collapse of the market in the recession conversely may have hurt business at Strip hotels to a disproportionate degree.
Well, the stock market has picked up again, and that bodes well for a return of the kind of discretionary income that could fuel consumer willingness to spend money here.
That's the hypothesis reached by a gaming-industry research analyst at C.B. Richard Ellis, who is forecasting a modest increase in Strip revenue of 3 percent to 7 percent next year in the wake of CityCenter's debut this month -- although mostly at the expense of competing properties.
In his forecast, consultant Jacob Oberman found that revenue generated on the Strip correlates more closely with stock-market performance than other bench marks commonly tracked by analysts, including employment, home prices and gross domestic product.
Although no single economic data point tracks Strip revenue closely, changes in the Standard & Poor's 500 stock index showed the highest correlation with Strip revenue per room, he said.
That surprised Oberman, who figured employment levels would more closely track overall revenue, as it does with gambling revenue in other casino markets nationwide.
"Although having a job and feeling comfortable with one's job status makes a trip to Las Vegas more likely, other factors, such as housing wealth and stock-market wealth, influence how much visitors will spend," Oberman said in his report. Corporate wealth as measured by the S&P may have a greater effect on what companies are willing to spend on business trips to Vegas, he added.
Although some casinos have indicated that employee theft is on the rise in the recession, some properties, amid plummeting profits, haven't been able to justify buying high-tech systems that can detect in-house fraud by tracking anomalies in spending activity. That's the word from systems experts who gathered at the Global Gaming Expo in Las Vegas recently.
Some systems work by measuring standard deviations in financial transactions -- instances in which figures vary from the norm for a particular work shift or department. A casino could use these systems to track cashier activity to detect whether a food server is charging many more meals to hotel rooms than normal or whether a casino manager is granting a disproportionate number of comps to players -- thieves who could be working in cahoots with employees.
"Historically, surveillance has been done in a scattered way," said Darrin Hoke, director of surveillance for the L'Auberge Du Lac hotel and casino in Lake Charles, La., which is owned by Las Vegas-based Pinnacle Entertainment. Rather than "swinging a camera around and hoping to catch someone," casinos need to home in on the problem by analyzing player data and working with other departments, such as video surveillance, to detect theft, Hoke said.
(Distributed by Scripps Howard News Service, www.scrippsnews.com.)
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