The following is an excerpt from Teresa Rivas | August 14, 2017 | Barrons.com |
We all know by now that what happens in Vegas doesn’t stay in Vegas. To that point, Morgan Stanley’s Thomas Allen and his team recently visited the city and met with Boyd Gaming (BYD), Caesar Entertainment (CZR), Eldorado Resorts (ERI), Las Vegas Sands (LVS), MGM Resorts (MGM), MGM Growth Properties (MGP), and Wynn Resorts (WYNN) and came away slightly more bearish on the outlook for the Vegas demand environment, but more bullish on ‘operating smarter’ and momentum in Macau.
First, the good news. Allen writes that they heard a lot about how casinos are operating smarter than they or others had in the past. That means using big data to decide where to reinvest, rather than chasing unprofitable businesses: “This is manifesting itself in BYD's 250-300bps 3-year margin uplift goal, MGM's shift away from RevPAR growth to its profit per occupied room strategy, CZR's counter-intuitive but successful calling strategy and part of its significant cost savings ($800m over past 2 years), and one of the main reasons ERI has become relevant.”
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