Vegas has been changing for the past few years. Food, show, and sightseeing revenue has gone up, while the percentage of people who gamble in the city has actually decreased a full 4% since last year. That does not mean that the city is going full-on family-friendly in all areas, but it is becoming a destination for more than just adults.
Add in the potential of an NHL hockey team on the Strip and the possibility of the Oakland Raiders moving and Sin City may look very different than it did just a few years ago. In this clip from the Industry Focus: Consumer podcast, Motley Fool analyst Vincent Shen and contributor Seth McNew talk about how Vegas is cleaning up, and some of the exciting new family-friendly developments that have sprung up recently.
A full transcript follows the video.
This podcast was recorded on June 28, 2016.
Vincent Shen: Just to give everyone a brief overview, the idea is, ultimately, this isn't really the Las Vegas of the past, even a few years past. As Seth had explained it to me before the show, it's kind of like it's getting cleaner, it seems, maybe a little bit more upscale. We know that Wynn (NASDAQ:WYNN) tends to cater to that kind of clientele, and he's definitely one of the leading names there.
Some quick info that I had from the Las Vegas Convention and Visitors Authority. Since the turn of the century, about 15 years, visitor traffic to Vegas has been up about 20%, whereas gaming revenue is up about 25%, from $7.7 to $9.6 billion. But it's actually down from the peak, which they hit in 2007.
It seems like, from their visitor profile, where they lay out things like first-time visitors, repeat visitors, what they're doing, where they're spending their money, visitor profile shows average expenditures for food and drink is up 6.3% in the past four or five years. Spending on shows, which is something that you're intimately familiar with, is up 30.3%, really impressive there. And then, for sightseeing, it's up about 45.1%. Shopping was down in 2015 compared to 2011, but the previous year actually showed growth of 15.8%.
The last thing that really hammers this home is the fact that the percentage of visitors who gambled in Vegas was down 4% from 77% to 73% over the past four or five years.
In your view, are you seeing this in person, how things are changing in terms of these companies focusing on other areas outside of the casino floor?
Seth McNew: Absolutely. I think, even if you had been in Vegas 5-10 years ago, you would really see a change now. It's much more family-focused. The casinos are really cleaning up a lot. Even out on the Strip, everything's cleaned up a lot. There's a lot more options, as well. Once you get there from the airport, it used to be that you would go straight to the casino tables. Now there are so many more options. You have a really nice hotel, you go see a show, you have a nice dinner. Then, gambling might be a small part of that. But definitely not the entire trip.
Shen: OK. For gaming revenue, I think I saw somewhere that the portion of the amount of money that, basically, the city and Clark County are drawing in has decreased. And a lot of that comes from the new developments such as the arena that opened recently. I think we've seen some of these. What do you think so far? Can you describe them a little bit, and what your experience has been?
McNew: Yeah. What you're talking about, that gaming revenue, from the last time I read on that LVCVA, that's down to about a third of the total revenue that the city brings in.
Shen: Which is totally surprising when you think about Sin City, because it's always seen as the gambler's paradise, but obviously that's no longer the case.
McNew: Yeah, one-third of the people are much more interested in going and having all these other options to do, other than just gaming.
Shen: And some of those options are ... ?
McNew: You mentioned the Arena. The Arena just opened up in April. This is MGM's (NYSE:MGM) new vision for that part of The Strip. That's on the very south end of The Strip. There's a whole area outside that they call The Park, and it has restaurants and shops and bars you can hang out at. And the Arena itself is this massive, gold bronze structure that seats 20,000. In there, you're going to have concerts, conventions, and hopefully an NHL team.
Shen: That seems to be the big push from when I was doing the research for this show. That might be the first major sports team to actually get in Las Vegas, because you guys don't currently have any other major franchises.
McNew: Right. So they're pushing to have an NHL team there, and it sounds like it's going to happen. ...