Las Vegas Strip Aims for August Reopening

The Las Vegas Sands predicts the famous desert gaming strip, which was shut down on March 18 because of coronavirus, will return to life in late summer. After shuttering for the first time in almost 57 years, hotels and casinos were forced to furlough staff while enduring a 44 percent loss in value. The Casino and Gaming sector of the S&P 500, which includes Wynn and MGM resorts along with the Sands, has lost $50 billion.

Robert Goldstein, who is the president and CEO of the Sands, admitted during a quarterly earnings call that he did not know how many people would be flying into Las Vegas in the next three months. He added that there was potential for group business starting in August and going into autumn. On the same call, Patrick Dumont, the Sands’ CFO, stated there was an expectation of a May or June reopening in some capacity.

The hotel and casino industry plays a large role in the economy of Nevada. To date, there have been over 300,000 jobs lost due to the pandemic, and it is unclear whether all of those positions will return. According to the American Gaming Association, the economy of the United States will lose $44 billion if casinos and hotels remain dark through the middle of May. Las Vegas alone brought in $12 billion worth of revenue in 2019.

The CEO of Wynn Resorts, Matt Maddox, sent a message to Governor Steve Sisolak, urging him to consider opening up the state’s economy in the near future. The Nevada Gaming Control Board has said it will allow casinos to open their doors only after submitting plans for hygiene, testing and personal protection for employees. Sands’ founder Sheldon Adelson said that recovery from the Covid-19 event would likely take a while, but that Las Vegas had very bright days ahead, despite a $51 million loss in the first quarter for the hotel.

The news is not all negative for the industry. With 90 percent of the country in lockdown, more people are turning to top online casinos for entertainment and fun, as reports. The games are easy to play and are a great way to relieve the tedium of staying at home. They also provide welcome relief from work, Zoom meetings and children running around. While many people enjoy the bright lights of Las Vegas, they also find the accessibility of online casino games to be more appealing than a long plane trip and weather that is often blistering hot. Internet casino gaming has not experienced any revenue loss throughout the lengthy coronavirus event and will likely continue to do quite well, even as the economy slowly returns to normal.

Despite the cautious optimism of Las Vegas hotels and casinos, investment banker Joel Simpkins warned in a report that recovery would be slow after the pandemic and is highly dependent on how much traffic passes through McCarran Airport. He also said that the strip would open in carefully controlled phases to ensure that there is not further spread of the illness. In addition, parking and resort fees could be lowered or eliminated altogether to stimulate business. Simpkins added that most casino operators would have to provide incentives to get people back on the strip, but getting cash flows and revenues back to pre-pandemic levels will take time.

Simpkins said that when visitors do return, he expects casinos to enforce social distancing and other safety protocols. This includes having a lower number of available rooms, fewer restaurants open, gaps between slot machines and less seating at gaming tables. While casinos will want to bring back as many workers as they can, there will initially be limited staff on hand to assist guests. Simpkins stated that bringing back employees is more efficient than hiring new people.

While the entire country has suffered under the weight of the Covid-19 crisis, Las Vegas has been hit especially hard, and getting the hotels and casinos back up and running benefits the state of Nevada as it is very dependent on gaming revenue. Whether the industry can meet an August start-up point remains to be seen. The sooner people return to play, the better for both Las Vegas and Nevada.

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