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Circus circus enterprises
 

Circus circus enterprises

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    Circus circus enterprises Circus circus enterprises Presentation Transcript

    • -MADHULIKA(4109026026)
      • Purchased in 1974 for $50,000 as a small & unprofitable casino operation.
      • By William.G.Bennett & William N. Pennington.
      • Rejuvenate Circus :- fresh marketing.
      • Went public with a stock offering in Oct 1983, & experiences rapid growth & high profitability over time.
      • Business of entertainment.
      • Innovators in the theme-resort concept popular in casino gaming.
      • Its areas of operations are Las Vegas, Reno, and Laughlin & Nevada as well as other locations in the U.S. and abroad
      • It operates 9 properties in Las Vegas, 10 properties in Nevada, 1 in Mississippi & has 50% ownership in other 3.
      • Circus Circus -Las Vegas:-
          • 69 acres land
          • 3744 hotel rooms.
          • 1,09,000 sq ft casino space.
          • Shopping areas.
          • 2 specialty restaurant.
          • Fast food shops
          • Cocktail lounges.
        • In 1997 - $126.7 million was invested – remodeling.
        • In 1998 - $35.2 million.
      • Luxor – 1993.
          • Egyptian themed hotel – casino complex.
          • 30 story pyramid.
          • Two new 22-story hotel towers.
          • 1,20,000 sq ft casino in hotel atrium.
        • In 1997 – went major renovations – costing $323.3 million.
        • In 1998 - $116.5 million.
          • 4425 rooms – renovated casino space.
          • A series of IMAX attractions- 5 theme restaurants.
      • Excalibur – 1990.
          • 28-story hotel towers – 4008 rooms.
          • 1,10,000 sq ft casino.
          • 12 restaurants
          • 1000-seat amphitheatre.
        • In 1997 – underwent renovations - $25.1 million.
      • The silver city casino & Slota-A-Fun combinedly offer 34,900 sq ft of casino floor.
      • All circus’s operations do well in city of las Vegas.
      • In 1997- operational earnings for Luxor & Circus Circus -Las Vegas were off 38% from previous year.
      • Due to disruption in services because of renovations.
      • Hotel room occupancy remained above 90% - low room rates.
      • Circus Circus – Reno:-
          • 1605 hotel rooms – 60,600 sq ft of casino.
          • Video arcades
          • Midway games & circus acts.
          • Cocktail lounges.
        • Remodeling - $25.6 million.
      • In1987 – The Colorado Belle – 63000 sq ft casino.
      • In 1983 – The Edgewat er – 57000 sq ft casino.
      • Combined, these two properties, contain 2700 rooms & over 1,20,000 sq ft of casino.
      • In Las Vegas – Mirage Resorts – to build Monte Carlo, a hotel-casino
        • 3002 hotel rooms
        • 90,000 sq.ft. casino.
      • In Elgin, Illnois, - 50 % partnership - Hyatt Development Corporation in The Great Victoria
        • styled to resemble a Victorian riverboat.
        • 36,000 sq. ft casino space.
      • 50 % partnership with Eldorado Limited in Silver Legacy.
        • 1711 hotel rooms.
        • 85000 sq.ft of casino space.
      • Strategies:-
        • Aggressive growth strategies.
        • Corporate structure – designed to enhance the growth.
        • A strong cash position – innovative ideas – cost control.
        • Competitive Edge - Invested heavily in renovation of existing properties.
      • 3 new projects:-
      • Mandalay Bay :- $950 million.
        • 43 story hotel – casino with over 3700 rooms – 11 acre aquatic environment.
      • In Detroit, Michigan, Circus has combined with Atwater Casino Group in a JV to build a $600 million project.
      • Planning to construct a casino resort along the Mississippi Gulf - $225 million.
      • In Atlantic city, Circus has entered into agreement with Mirage Resorts to develop a 181-acre site in the Marina district.
      • In 1997 – Gaming industry captured a large amount of dollars spent in U.S.
      • Gamblers lost $44.3 billion.
      • Casino gambling accounts for 76% of all legal gambling expenditures.
      • Las Vegas – largest U.S gaming market – largest conventional market – more than 1,00,000 hotel rooms.
      • Las Vegas attracts overnight resort-seeking vacationers.
      • Atlantic city attracts day trippers.
    • Revenues(1997) Income(1997) Revenues(1996) Net Income(1996 Starwood/ITT $6597 $249 Hilton hotels 5316 250 3940 82 Harrah’s Entertainment 1619 99.3 1586 98.9 Mirage resorts 1546 207 1358 206 Circus Circus 1354 89.9 1247 100.7
      • In Las Vegas, Nevada, gambling operations are subject to regulatory control by the
        • Nevada State Gambling Control Board,
        • the Clark Country Nevada Gaming & Liquor Licensing Board, and
        • City government regulations .
      • The laws, regulations & supervisory procedure are based on public policy concerned with prevention of unsuitable persons from having direct or indirect involvement with gaming at any time.
      • Core Competency is casino gaming.
      • Need to focus its efforts in Las Vegas, Atlantic City and Mississippi.
      • For years, analysts have questioned the ability of gaming industry to continue high growth as industry matures.
      • Circus enterprise faces the risk of maintaining high growth in mature industry.
      • Increasing competition.
      • Decrease in Net Income.
      • In 1974- Purchased by Bennet and Penington – Casino gaming.
      • In 1979 - Circus Circus purchased Slots-A-Fun.
      • In 1982 – remodeled Circus Circus.
      • In 1983 – went public - 0ffering four million shares on the New York Stock Exchange.
      • In 1983 - extended the operations in Nevada, purchasing the Edgewater Hotel and Casino on the Colorado River in Laughlin, Nevada.
      • In 1984 - purchased the Colorado Belle Casino - $4 million.
      • In 1985 - expanded the Reno facilities - constructing a 29-story hotel tower, called Circus Skyrise.
      • In 1990 – opened Excalibur.
      • In 1991 - earned $84.3 million on sales of nearly $620 million.
      • In 1993 – opened Grand Slam Canyon – amusement park.
      • In 1995 - Acquisition of privately held Gold Strike Resorts Inc. - $500 million
      • In 1999 -  $950 million upscale Mandalay Bay resort opens on the Strip; company changes its name to Mandalay Resort Group.
      • To become the first of a new generation of casino operators who saw their business not as an offshoot of a slightly shady underworld practice, but as an entertainment franchise designed to attract people of all income levels and all ages.
      • Circus Circus Enterprises, Inc. is in the business of entertainment, with its core strength in casino gaming.
      • Provide customers with entertainment that is pure play and fun.
      • Emphasize quality.
      • Look for innovations to improve customers' experience.
      • Commit to being a leader.
      • Attract family vacationers with fun for parents and children.
      • In the initial phase, company used to focus on “low roller”.
      • Later, it started focusing on “middle roller”.
      • Strength :-
        • Strong financial position
        • Innovative product & Marketing
        • Experienced management team.
        • Theme resort concept.
      • Weakness:-
        • Financial Performance.
        • Ability to compete in the fast changing Las Vegas market.
      • Opportunities:-
        • Expansion/Diversification
        • Theme park development.
        • Circus has traditionally attempted to attract the "low roller”. It has also ability to attract “high roller”.
      • Threats:-
        • Increasing competition
        • Economic cycle sensitivity.
      • Political:-
        • Strict governmental regulations pertaining to the gaming industry.
        • Change in laws, regulations & procedures could have an adverse effect on any gaming operations.
      • Economic:-
        • Casino gaming operations provide ½ of total revenue.
        • Expansion of competition is eroding Circus's market.
      • Social:-
        • Ability to attract high roller prospects.
        • Aims more at the middle income gambler & family oriented vacationers as well as upscale traveler and player.
      • Technological:-
        • Development of theme resort concept – new concept.
        • Expansion and diversification available due to a growing industry
      • Financial performance :- Circus casinos have the low revenue relative to its competitors.
      •   Las Vegas focuses on catering to higher-end rollers, while the company has targeted family vacationers .
        • Company has geared all of their casinos based on the family concept and has remodeled their casinos to fit its customer base.
      • Circus is facing increased competition from traditional competitors who are imitating some of their business strategies .
        • The latest mergers between ITT Corporation and Starwood Lodging Trust, has brought great competition to Circus.
      • Growth in the gambling industry has led to geographical expansion in recent years ; as a result Circus has been faced with increased competition .
      • To remain in the business of entertainment.
      • To stay one of the innovators.
      • To broaden its market.
      • To increase its market share
      • To focus on free cash flow
      • Aim more at the middle-income gambler, family-oriented vacationer, and the upscale traveler and player.
      • Promote theme gambling resort concept.
      • Pursue joint ventures and market analysis of opportunities
      • Employ growth strategy of acquiring smaller casinos in other states.
      • Differentiate strategy for high and low rollers
    • 1997 Revenues 1997 Income 1996 Revenues 1996 Net Income Starwood/ITT 6597 249 Hilton Hotels 5316 250 3940 82 Harrah’s Entertainment 1619 99.3 1586 98.9 Mirage Resorts 1546 207 1358 206 Circus Circus 1354 89.9 1247 100.7 Trump Hotel & Casino Inc 1399 -42.1 976 -4.9 MGM Grand 827 111 804 74.5
      • Purchased as a small & unprofitable casino operations – 1974 - $50,000.
      • In 1983 – went public – experienced rapid growth & high profitability.
      • In between 1993 & 1997 – average return on invested capital was 16.5% & generated over $1 billion in free cash flow.
      • Marketing:
        • Focus on middle income customer.
        • Offer customers good value for the cost
        • Concentrate marketing on repeat customers
        • Offer a large array of entertainment for customers
        • Focus on family tourists in advertisements
      • Research and Development :
        • Continuously upgrading building and equipment – so need to have state-of-the-art equipment
      • Operations :
        • Realize low profits per square foot of casino
        • Continuously update facilities
        • Design to entice family visitors
        • Use technology to create atmosphere for customers
      • Circus Circus Enterprise describes itself as in the business of entertainment.
      • Marketing of its product cater to “low rollers”.
      • Its rules and regulation complies with regulatory control by city government regulations.
      • The laws, regulations and supervisory procedures of virtually all gaming authorities are based upon public policy concerned primarily with prevention of unfair practices .
      • The main market of the company , showing growth was Las Vegas, Nevada.
      • Las Vegas remains the largest U.S gaming market.
      • It is a destination market for most visitor.
      • It attracts overnight resort seeking vacationers.
      • Gaming revenues are expected to continue to grow.
      • Currently, in Atlantic City, Donald Trump’s gaming empire holds the largest market share(30%).
      • The next closest in market share are Caesar’s (10.3%), Tropicana and Bally’s (9.2%), and Showboat(9%).
      • There remains a number of smaller markets located around the U.S, primarily in Mississippi, Louisiana, Illinois, Missouri and Indiana.
      • Native American casinos continue to be developed on federally controlled Indian land – constitute only a small portion of overall gaming revenues.