Though no industry is immune to slumps, Las Vegas has typically been safeguarded against protracted ruts. Casinos and sportsbooks are considered recession-proof, largely because they peddle the allure of winning big-time. During the height of the coronavirus pandemic, however, no industry was inoculated against serious pain.
Vegas, in fact, was and continues to feel the ramifications more than most. Travel shut down for a while, and the reopening of life as we know it has still seen people flock to the top online sportsbooks rather than on-site betting locations. Now would not seem to be the time to invest in Sin City's future. And yet, despite the potential red flags, casino operator Genting Group is betting $4.3 billion on Las Vegas' long-term livelihood.
But will their dice roll pay off?
Impact Of Genting Group's $4.3 Billion Bet on Vegas
Correct: That's billion with a "b." Genting Group sees a lucrative outlook for Vegas, one in which it can share the playing field with online sportsbooks operators and all the other places in the United States that continue to legalize sports betting.
Truth be told, by opening Resorts World Las Vegas, which will include three hotel partnerships with Hilton, Genting Group, which is based in Malaysia, doesn't have to worry too much about the increase in legal sports betting cutting into its appeal. Other regional locations don't offer the same amenities as Vegas, which will have more immersive casino experiences on top of shows, higher-end hotels, one-of-a-kind excursions and so much more.
Going up against the online sportsbooks, which are being legalized across the United States at an increasing rate, is actually the bigger gamble. While the pandemic isn't raging like it was before, people haven't resumed travel like they did previously. There remains a stigma among some against going out in public, flying domestically and internationally and just generally subjecting yourself to large crowds.
Resorts World Las Vegas, along with the rest of Sin City, is tasked with enticing tourists back to their physical locations—an undertaking that is already underway.
Bringing Business Back To Vegas
To understand what Vegas is up against, we must first get a grasp on how much business they're trying to recoup. In two words: a lot.
Sin City's overall revenue for 2020 checked in at $18.3 million, which represents a 25.2 percent decrease from their $25.4 billion profit stream in 2019. The numbers for 2021 won't be as bleak, but they will be down substantially compared to 2019. The goal at hand is to facilitate a major turnaround by 2022.
Casinos at large have started doing this by running special package promotions if you book in advance, upping the number of amenities and comps they're offering and, above all, creating an environment that's deemed safe and secure amid throngs of people. Everything from socially distanced slot machines to plexiglass seating around table games to craps and roulette tables without a dealer or the need to touch chips or dice has been installed throughout the City of Second Chances.
What's more, these precautions appear to be resonating with tourists.
After seeing the number of visitors exponentially decline through February 2021, the foot traffic began a gradual uptick in March. Since then, from April through June, Vegas has surpassed 2 million tourists for three months running. While those sub-3 million figures are still a ways off the 2019 pace, they represent over a 2,300 percent increase from 2020. That's a big deal.
Resorts World Las Vegas' Role In Vegas Reboot
By opening a $4.3 billion resort, Resorts World Las Vegas is of course taking extra steps in appealing to prospective guests.
With a strong presence in Singapore and a planned one in Tokyo, this initially included drawing in Asian clientele, something they wanted to attempt by offering unique amenities like a panda habitat. Multiple delays, however, forced them to scrap more extravagant plans. They instead wield many of the same over-the-top luxuries as other casinos, only on a larger scale.
The resort covers almost 90 acres, houses more than 3,500 hotel rooms and suites, boasts a 5,000-seat theatre, and has been outfitted with one of the world's biggest LED screens on one of its towers. It is reportedly the largest new property on The Strip in more than 10 years.
Resorts World has also continued putting together an Asian motif with its decor, art, and show options. Given how big the gambling market is in Asia, as well as their existing presence in Singapore, this seems like a good move. They will be able to cross-promote, and their reach will only increase if they're ever able to get up and running in Japan. Partnering with the Hilton also ensures them a level of domestic brand recognition to reel in tourists who aren't familiar with their international operations.
Make no mistake, this is still a risk. And while every casino is facing the same challenges, very few are starting from scratch or on the hook for a recent $4.3 billion investment.
Genting Group is clearly confident in its ability to get the property off the ground. And really, we can't blame them. Between Vegas' on-the-rise tourist numbers and the relatively successful deployment of COVID-19 vaccines in the United, this seems like a gamble that will eventually pay off—even if it takes longer than intended.
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