Apertor Research                                     www.apertorhospitality.comJuly 1, 2010The Outlook for the Las Vegas L...
2Overview„   Recent commentary regarding the Las Vegas economy                „   Based on data we have analyzed and anted...
3                                                                        Las Vegas Locals Market Major Properties       At...
000 omitted                                                                                                               ...
5Core industry metrics plummet on a y/y basis                                                                       Daily ...
6National and local economic trends severely impact the locals gaming market„   The largest industry in terms of local emp...
7Las Vegas locals gaming revenue declined during the recession                    $3.0                    $2.5            ...
8……While supply increased just prior to and during the recession                                                        LV...
9Win per slot declined in face of new supply            $120            $110            $100             $90             $...
10Population declined in 2009 after years of growth                                                                       ...
11Local personal income declined in 2009                                        Total personal income                     ...
12Housing permits fall below 1980s levels        45,000        40,000        35,000        30,000        25,000        20,...
13Las Vegas employment trends have been negative since 2008                                                               ...
14…..Las Vegas employment trends continue to decline into 2010                                                            ...
15Negative Las Vegas employment trends hurt gaming revenues                                              employment       ...
16Negative Las Vegas employment trends hurt gaming revenues (continued)„   Forecasts by the DETR suggest that there will b...
„                                                                                                                         ...
18Housing market distress negatively impacts locals market                                      Y/Y Shiller Las Vegas hous...
19Housing market distress negatively impacts locals market (continued)„   Based on our research and discussions with local...
20Southern California housing market premium that drove Las Vegasmigration was eliminated during the recession            ...
21Southern California housing market premium that drove Las Vegasmigration was eliminated during the recession (continued)...
22LV Locals Market impacted by negative population and income growth                         y/y total personal income    ...
23LV locals market impacted by negative population and income growth (continued)                                  populati...
24LV locals market impacted by negative per capita income                                        per capita income (left a...
25Per capita gaming spend also declined at a greater rate than per capita income                                y/y change...
26Taxable sales head south from 2006 peak to current trough                         $3.6                         $3.4     ...
Apertor las vegas locals casino market 1a
Apertor las vegas locals casino market 1a
Apertor las vegas locals casino market 1a
Apertor las vegas locals casino market 1a
Apertor las vegas locals casino market 1a
Apertor las vegas locals casino market 1a
Apertor las vegas locals casino market 1a
Apertor las vegas locals casino market 1a
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Apertor las vegas locals casino market 1a

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The presentation provides an analysis of the Las Vegas economy and its impact on the Las Vegas locals gaming market.

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Apertor las vegas locals casino market 1a

  1. 1. Apertor Research www.apertorhospitality.comJuly 1, 2010The Outlook for the Las Vegas Locals Casino MarketEconomic Challenges Dominate the Environment Gregg Carlson Advisor 702.506.0475 x540 gcarlson@apertorhospitality.com ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  2. 2. 2Overview„ Recent commentary regarding the Las Vegas economy „ Based on data we have analyzed and antedoctal evidence we have is mixed as some commentators point to a near term collected in Las Vegas, we believe that optimism of a significant recovery, while others point to a lack of recovery. near–term recovery in the Las Vegas locals market is premature.„ Boyd Gaming (Boyd) recently forecasted a near term recovery in „ Our view is that the locals market is highly dependent the Las Vegas locals market, pointing to recent improvements on overall conditions in the local economy in a way that in headline national economic metrics including, consumer is only partially influenced by the Las Vegas Strip. confidence, consumer spending, and new home sales, as well as Las Vegas visitor volume. Boyd pointed to improving „ Our view is that a locals casino market recovery is dependent trends in their Las Vegas locals business and forecasted y/y upon a local economic recovery that stimulates job and growth in the 2nd half of 2010. Boyd essentially make’s population growth, as well as improvement in the local housing case that near-term improvement on the Las Vegas Strip market. We also believe the locals market is significantly will positively impact their Las Vegas locals franchise. influenced by trends in retiree population growth as the market is highly dependent upon the 55+ age group.„ MGM continues to make the Las Vegas Strip recovery case based on the assertion that trends in their group „ As a result of poor near and intermediate term prospects for business bookings are improving in the back half of 2010 job and population growth and ongoing negative issues in the into 2011. According to Boyd, this recovery would help local housing market, we are not predicting a near term recovery their business recover in the Las Vegas locals market. in the Las Vegas economy and therefore the locals gaming market. We also believe that the significant historic driver of 55+„ On the other hand, commentary made by the Nevada Department population growth is not present in the current environment. of Employment Training and Rehabilitation (DETR) suggests that while the worst of the recession may be over, Nevada „ We therefore believe that recovery in the market continues down a long bumpy road to economic recovery. will be bumpy, slow and protracted.„ The most recent readings of UNLV’s leading local economic indicators also provide no visibility for improvement in the Las Vegas economy over the next six months. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  3. 3. 3 Las Vegas Locals Market Major Properties At 12/31/09Dimensioning the market Property Slots Tables Total positions Market Share BOYD The Orleans 2,812 60 2,872 5.2%„ The Las Vegas locals market is one of the largest gaming Sam’s Town 2,370 30 2,400 4.3% markets in the U.S., generally ranked behind the Las Vegas Suncoast 2,217 36 2,253 4.1% Gold Coast 2,058 49 2,107 3.8% Strip and Atlantic City based on gaming revenue. Jokers Wild Casino 484 7 491 0.9%„ The market is dominated by 26 properties. At Boyd Subtotal 9,941 182 10,123 18.2% 12/31/09, approximately 60% of the gaming positions STATION are controlled by Boyd (18% within 5 properties) Red Rock Station 2,989 64 3,053 5.5% and Station (41% within 10 properties). Sante Fe Station 2,825 47 2,872 5.2% Boulder Station 2,749 41 2,790 5.0%„ The most recent significant additions to the market include, Green Valley Ranch 2,392 55 2,447 4.4% South Point - 2005, Red Rock Station - 2006, Eastside Sunset Station 2,463 41 2,504 4.5% Aliente Station 2,013 44 2,057 3.7% Cannery - 2008, Aliante - 2008 and M Resort -2009. Texas Station 1,994 31 2,025 3.6% Palace Station 1,722 46 1,768 3.2%„ Overall revenue in the market declined in 2009 on a y/y basis Fiesta Henderson 1,628 19 1,647 3.0% despite the supply increases that occurred in late 2008 to early Fiesta Rancho 1,412 16 1,428 2.6% 2009 associated with the Aliante Station and M Resort openings. Station Subtotal 22,187 404 22,591 40.7% BOYD & STATION subtotal 32,128 586 32,714 58.9%„ Historically the Las Vegas locals market market has been driven by general population and consumer spending OTHER MAJOR PROPERTIES growth tied to the Las Vegas Strip, real estate and South Point 2,270 71 2,341 4.2% construction growth as well as an influx of retirees. Silverton 2,221 35 2,256 4.1% Cannery Casino 2,010 37 2,047 3.7%„ Boyd and Station have traditionally dominated the market. Eastside Cannery 1,963 25 1,988 3.6% M Resort 1,893 72 1,965 3.5% Rampart Casino 1,265 28 1,293 2.3%„ The most recent property openings were bets on the Arizona’s Charlie’s - Decatur 1,200 12 1,212 2.2% growth of rooftops in the immediate surrounding areas. Arizona Charlie’s - Boulder 1,000 12 1,012 1.8% Rooftop growth currently does not exist. There is little Terrible’s LV 960 9 969 1.7% visibility that housing construction will commence in Jerry’s Nugget 728 9 737 1.3% a significant way for the foreseeable future as a whole Club Fortune 560 12 572 1.0% or in areas that support recent property additions. OTHER MAJOR PROPERTIES subtotal 48,198 908 49,106 88.4% Other properties 6,357 111 6,468 11.6% Total 54,555 1,019 55,574 100.0% Source: Company filings and Nevada Gaming Commission ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  4. 4. 000 omitted $2,600,000 $2,800,000 $3,000,000 $3,200,000 $3,400,000 $3,600,000 $3,800,000 Jan 06 Feb 06 Mar 06 Apr 06 May 06 Jun 06 Jul 06 Aug 06 Sep 06 Oct 06 Nov 06 Source: Nevada Gaming Commission, Apertor Hospitality Dec 06 Jan 07 Feb 07 Mar 07 Apr 07 May 07 Jun 07 Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07 Jan 08 Total slot volume Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Volume continues to decline as the “great recession” swamps the industry Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 4©2010 Apertor Hospitality, LLC. All Rights Reserved.
  5. 5. 5Core industry metrics plummet on a y/y basis Daily volume per slot - negatively impacted since late 2008 $2.5 $2.4 $2.3 $2.2 $2.1$s in thousands $2.0 2006 $1.9 2007 $1.8 2008 2009 $1.7 2010 $1.6 $1.5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Nevada Gaming Commission, Apertor Hospitality ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  6. 6. 6National and local economic trends severely impact the locals gaming market„ The largest industry in terms of local employment is the „ Forecasts we have viewed indicate that Las Vegas employment gaming industry, followed by retail, government, construction conditions will not likely improve until 2012 or later tied and health care. During 2008 these industries employed to an overall improvement in the U.S. economy, forecasted 68% of the total workforce in Las Vegas as follows: improved conditions on the Las Vegas Strip and improvement − gaming 29%, retail 11%, government 11%, in the U.S. housing market, among other factors. construction 10% and health care 7%. „ While the worst may be over in the local housing market, risks remain, owing to the ongoing high unemployment„ Broad based employment declines have occurred in the gaming, rate, negative loan to value and an overhang tied to retail and construction industries. Government employment is potential mortgage resets over the next two years. set to decline as well due to local government budget issues. „ Residential construction in Las Vegas is expected to„ Prior to the recession, spending in the locals market was remain non-existent for the foreseeable future owing also driven by the significant increase in housing values. to a variety of negative economic factors as well as During 2008 and 2009, the housing market collapsed and a significant overhang of foreclosed houses. housing-driven consumer spending declined as well. „ Government emergency home ownership programs (i.e.„ The housing market collapse and significant volume declines on HAMP) could help the local housing market some. So far we the Las Vegas Strip now places Las Vegas near the top of negative believe the impact from these programs has been minimal. economic statistics in terms of unemployment (currently near Local forecasters do not expect these programs to turn 14%) and housing negative loan to value (approximately 80%). the Las Vegas residential real estate market around. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  7. 7. 7Las Vegas locals gaming revenue declined during the recession $3.0 $2.5 $2.0 $1.5$’s in billions $1.0 $0.5 $0.0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Nevada Gaming Commission„ The locals market consistently grew along with the overall growth of the Las Vegas economy and then collapsed during the recession. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  8. 8. 8……While supply increased just prior to and during the recession LV locals market number of gaming devices 60,000 55,000 50,000 45,000 40,000 35,000 30,000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Nevada Gaming Commission„ Capacity grew along with the growth of the local economy. „ There has been a significant increase in major property supply since 2006 tied to the Aliante Station, Eastside Cannery, M Resort, Red Rock and South Point openings. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  9. 9. 9Win per slot declined in face of new supply $120 $110 $100 $90 $80 $70 $60 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Nevada Gaming Commission, Apertor Hospitality„ The market is primarily a slot market as slot revenue is the largest revenue source in a typical Las Vegas locals casino operation. Slot win per unit has significantly declined since 2007 due to the recession and overall supply increase. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  10. 10. 10Population declined in 2009 after years of growth Clark County population 2,000,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 1980 1981 1982 1983 1985 1986 1988 1989 1990 1991 1992 1993 1995 1996 1998 1999 2000 2001 2002 2003 2005 2006 2008 2009 1984 1987 1994 1997 2004 2007 Source: UNLV Center for Business and Economic Research„ After years of increases, the population declined during 2009 due to the recession. This was the first decline since 1980 (the period we tracked in our research). ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  11. 11. 11Local personal income declined in 2009 Total personal income LV locals gaming revenue ($s in billions) $90,000 $3.0 $80,000 $2.5 $70,000 $60,000 $2.0 $50,000 $1.5 $40,000 $30,000 $1.0 $20,000 $0.5 $10,000 $0 $0.0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: UNLV Center for Business and Economic Research, Nevada Gaming Commission and Apertor Hospitality„ The decline in locals gaming revenue preceded the decline in personal income as the locals market has proven to be susceptible to the recession. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  12. 12. 12Housing permits fall below 1980s levels 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - 0 81 82 83 85 86 88 89 90 91 92 93 95 96 98 99 00 01 02 03 05 06 08 09 84 87 94 97 04 07 8 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 19 19 19 19 20 20 Source: UNLV Center for Business and Economic Research„ The housing market is a significant driver of the local economy. „ Our local contacts suggest that national builder local land After years of increases tied to market growth, housing permits acquisition activity has increased some. At the same time, a plummeted during the recession. During 2009, issued permits fell significant amount of shadow inventory exists in bank REO activity. below the 1982 level (the lowest level of the period we tracked between 1980 and 2009). Recent 2010 monthly permitting activity „ Construction activity and employment are not has improved over 2009, but remains at overall low levels. expected to return for several years. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  13. 13. 13Las Vegas employment trends have been negative since 2008 employment unemployment rate 16% 950,000 14% 900,000 12% 850,000 10% 800,000 8% 750,000 6% 700,000 4% 650,000 2% 0% 600,000 Jul 01 Jul 07 Jul 08 Jul 09 Jan 00 Apr 00 Jul 00 Oct 00 Jan 01 Apr 01 Oct 01 Jan 02 Apr 02 Jul 02 Oct 02 Jan 03 Apr 03 Jul 03 Oct 03 Jan 04 Apr 04 Jul 04 Oct 04 Jan 05 Apr 05 Jul 05 Oct 05 Jan 06 Apr 06 Jul 06 Oct 06 Jan 07 Apr 07 7-Oct Jan 08 Apr 08 Oct 08 Jan 09 Apr 09 Oct 09 Jan 10 Apr 10 Source: UNLV Center for Business and Economic Research, DETR and Apertor Hospitality„ Employment consistently grew in each and „ Employment in the construction industry declined approximately every year between 1980 and 2007. 60% on a peak to trough basis between 2006 and 2010.„ Employment reached a peak in 2008 and has subsequently declined. „ Employment in the gaming industry on the Las Vegas Strip and Downtown Las Vegas declined approximately 13% on a peak to trough basis between 2006 and 2010. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  14. 14. 14…..Las Vegas employment trends continue to decline into 2010 employment unemployment rate 920,000 16% 14% 900,000 12% 880,000 10% 860,000 8% 6% 840,000 4% 820,000 2% 800,000 0% Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 Source: DETR and Apertor Hospitality„ Recent monthly data points remain extremely negative. „ We estimate that the actual unemployment rate is approximately 20% as the published rate does not include discouraged and under-employed workers. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  15. 15. 15Negative Las Vegas employment trends hurt gaming revenues employment LV locals gaming revenue ($s in billions)1,000,000 $3.0 900,000 $2.5 800,000 700,000 $2.0 600,000 500,000 $1.5 400,000 $1.0 300,000 200,000 $0.5 100,000 - $0.0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: UNLV Center for Business and Economic Research, Nevada Gaming Commission and Apertor Hospitality ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  16. 16. 16Negative Las Vegas employment trends hurt gaming revenues (continued)„ Forecasts by the DETR suggest that there will be „ The March 2010 employment data point no employment growth during 2010. declined by 5.7% on a y/y basis.„ Virtually all major industry sectors have significantly decreased „ The most recent unemployment rate (April 2010) reached an all time employee headcounts. The gaming industry has aggressively high for the period we reviewed (the year 2000 forward) suggesting reduced headcounts and has indicated that they plan to that employment conditions in Las Vegas remain challenged. minimize headcount increases in the face of a recovery. „ The most recent April 2010 locals gaming market data„ Our polling of local major employers suggests that the citywide point continued to be negative on a y/y basis. hiring freeze remains intact in all major industry sectors. „ The bottom line is that substantial ongoing negative„ The shoe that is in the process of dropping is government. employment issues will continue to negatively State and local budget deficits will continue to play a big role affect gaming spend in the locals market. in reducing the headcount in this sector going forward.„ Local researchers suggest that employment conditions will not meaningfully improve until 2013 based on an overall improvement in the local economy that will depend on and lag a national economic recovery. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  17. 17. „ Case Shiller Index 100 150 200 250 300 50 0 January 1987 July 1987 January 1988 July 1988 January 1989 Source: Case Shiller Index July 1989 January 1990 July 1990 January 1991 July 1991 January 1992 CA-Los Angeles July 1992 January 1993 July 1993 on a peak to trough basis between 2006 and 2010. After years of stability, the Las Vegas housing market January 1994 and 2010. Housing values declined approximately 55% experienced a significant boom and bust between 2003 July 1994 January 1995 July 1995 January 1996 July 1996 January 1997 Las Vegas housing market boomed and went bust July 1997 January 1998 July 1998 „ January 1999 NV-Las Vegas July 1999 January 2000 July 2000 January 2001 July 2001 January 2002 July 2002 January 2003 July 2003 January 2004 July 2004 meaningful signs of improvement. Recent data points have yet to show January 2005 July 2005 January 2006 CA-San Diego July 2006 January 2007 July 2007 January 2008 July 2008 January 2009 July 2009 January 2010 17©2010 Apertor Hospitality, LLC. All Rights Reserved.
  18. 18. 18Housing market distress negatively impacts locals market Y/Y Shiller Las Vegas housing index y/y locals gaming revenue 50% 40% 30% 20% 10% 2007 2008 2009 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 -10% -20% -30% -40% Source: Case Shiller Index, Nevada Gaming Commission and Apertor Hospitality„ Gaming revenue significantly declined during 2008 „ Our research suggests that part of the locals market gaming and 2009 along with local housing values. revenue decline was directly and indirectly tied to a negative housing value adjustment that occurred during 2008 and 2009. Our regression analysis suggests that approximately 60% of overall U.S. consumer spending may be explained by changes in housing values on an approximate one year lag basis. The local trend appears to be aligned with this national research finding. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  19. 19. 19Housing market distress negatively impacts locals market (continued)„ Based on our research and discussions with local real estate „ Southern Nevada also faces ARM mortgage reset risk professionals and researchers, we expect the recovery over the next 24 months as approximately 30% of in local housing market to be weak and protracted, Nevada Alt-A ARM loans are subject to reset. extending over a multi-year period of time pending an improvement in the employment outlook. „ Data supplied by the New York Federal Reserve suggests that the Clark County 90 day delinquency rate was„ Current estimates suggest that 70% to 80% of homes located in well above the national average at 12/31/09. Las Vegas are in a negative loan to value position. At 12/31/09 the Las Vegas region had an aggregate 133% negative loan to value, one of the highest rates in the U.S. High negative loan to value relationships tend to increase the foreclosure rate. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  20. 20. 20Southern California housing market premium that drove Las Vegasmigration was eliminated during the recession Southern CA Home Prices Las Vegas New Home Prices Annual population growth $600 10% $500 8% $400 6% $s in thousands $300 4% $200 2% $100 0% $0 -2% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: UNLV Center for Business and Economic Research, Station Casinos 2008 investor presentation and Apertor Hospitality. Note: Southern CA home prices are based on a weighted average of Southern California 5 County new and existing home prices ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  21. 21. 21Southern California housing market premium that drove Las Vegasmigration was eliminated during the recession (continued)„ California is the number one point of origin for Las Vegas „ The premium has significantly shrunk since 2007 retirees at 31% of total retirees which is approximately and now approximates 2001 levels. 5x greater than the 2nd ranked state, Arizona. „ We believe this is a negative influence on California retiree„ Las Vegas population growth has long been migration and population growth to Las Vegas looking forward. influenced by retiree migration. „ While the premium has recently expanded some, most of the„ Between 2001 and 2007, a large premium developed recent increase is attributable to ongoing decreases in Las Vegas between Southern California and Las Vegas home values in home values, which we view as a negative population driver. spite of the strong increase in Las Vegas home values. „ Migration to Las Vegas has also been negatively impacted by„ This premium, low taxes and other factors, drove retiree population near retirees that have postponed retirement due to economic growth as Southern California residents in retirement or nearing stress and inability to sell their residence in their home market. retirement cashed out of homes in Southern California and acquired homes in Las Vegas with lesser debt levels/higher equity levels. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  22. 22. 22LV Locals Market impacted by negative population and income growth y/y total personal income y/y locals gaming revenue y/y change in population 20% 15% 10% 2008 5% 2009 0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 -5% -10% Source: UNLV Center for Business and Economic Research, Nevada Gaming Commission and Apertor Hospitality„ The chart shows that the Las Vegas locals market has contracted along with negative changes in personal income and population trends. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  23. 23. 23LV locals market impacted by negative population and income growth (continued) population growth + per capita income growth locals gaming revenue growth 20% 15% 10% 2008 5% 2009 0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 -5% -10% Source: UNLV Center for Business and Economic Research, Nevada Gaming Commission and Apertor Hospitality„ The Las Vegas locals market has been defined as a derivative of „ We believe the 2008 to 2009 locals market gaming the combination of population and per capita income growth. revenue decline was also influenced by a significant The relationship between population plus per capita income decline in local housing values during this period. growth and locals gaming market spending (revenue) growth was strong between 1996 to 2007 and then weakened during 2008 and 2009 as locals gaming growth significantly declined. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  24. 24. 24LV locals market impacted by negative per capita income per capita income (left axis) Gaming spend per person (right axis) 45,000 $1,600 40,000 $1,400 35,000 $1,200 30,000 $1,000 25,000 $800 20,000 $600 15,000 $400 10,000 5,000 $200 - $0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: UNLV Center for Business and Economic Research, Nevada Gaming Commission and Apertor Hospitality„ The Las Vegas economy and locals market declined from a per capita income and spend vantage point as the decline in gaming spend per person preceded the decline in per capita income. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  25. 25. 25Per capita gaming spend also declined at a greater rate than per capita income y/y change in gaming spend per person y/y change in per capita income 15% 10% 5% 2009 0% 1996 1997 1998 1999 2000 2002 2003 2004 2005 2006 2008 2001 2007 -5% -10% -15% Source: UNLV Center for Business and Economic Research, Nevada Gaming Commission and Apertor Hospitality„ During 2008 and 2009, per capita gaming spend declined at a greater rate than per capita income as the recession intensified. ©2010 Apertor Hospitality, LLC. All Rights Reserved.
  26. 26. 26Taxable sales head south from 2006 peak to current trough $3.6 $3.4 $3.2 $3.0 $’s in billions $2.8 $2.6 $2.4 $2.2 $2.0 6 7 6 07 08 09 6 10 7 8 9 6 7 8 9 0 8 9 6 7 8 9 06 07 08 09 l-0 l-0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -1 l-0 l-0 -0 -0 -0 -0 n- n- n- n- p- p- p- p- n ay ay ay ay ar ar ar ar ar ov ov ov ov Ju Ju Ju Ju Ja Ja Ja Ja Ja Se Se Se Se M M M M M M M M M N N N N Source: Nevada Department of Taxation„ Clark county taxable sales have generally been in decline since the 2006 to 2007 peak. Recent numbers remain comparatively weak. ©2010 Apertor Hospitality, LLC. All Rights Reserved.

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