Downtown Las Vegas is eager to resume operations, and once it does, I believe that casinos in the vicinity of the Fremont Street Experience will thrive in a rather unexpected manner, outperforming the ones on the Las Vegas Strip.
Smaller hotel capacities
Around Fremont Street, there are approximately 7,200 hotel rooms up for grabs. To put it in perspective, if you were to combine the number of rooms at Venetian and Palazzo, it would be roughly the same. Out of all the downtown accommodations, Golden Nugget claims about one-third of them. The interesting thing is that downtown casinos don't require nearly as many guests to make a profit compared to those on the Strip. This is because the overhead costs for hotel operations and other amenities are significantly lower.
The city center relies heavily on the revenue generated by the gambling industry.
According to state reports, nearly half of the revenues generated by downtown Las Vegas casinos come from the bustling casino floor, showcasing the city's vibrant gambling culture. In contrast, Las Vegas Strip casinos only account for approximately 35 percent of their total revenues from gaming activities, as the Strip offers a wide array of entertainment options beyond the casino experience. As the city gradually recovers from the recent disruptions, it is anticipated that casino operations in downtown Las Vegas will soon return to a state resembling their pre-pandemic levels, attracting both local gamblers and tourists looking for a thrilling and memorable experience.
When resorts reopen, the lack of other amenities and attractions will result in a higher number of gamblers in the tourism industry compared to normal times. As a result, downtown areas will see a surge in player-friendly gambling, making it more appealing than ever before.
Reduced dependence on convention business in the city center.
Downtown Las Vegas, with its limited convention space, is not the preferred destination for many conventions, unlike its competitors located on the Strip. This discrepancy is partially responsible for the low projected occupancy rates on the Strip. The cancellation of numerous conventions has further contributed to this downward trend.
The conventions bring about positive effects on the casinos located around Fremont Street. People who attend these events have the option to explore downtown Las Vegas, either by visiting or choosing to stay there instead, especially when the Strip hotels have raised their room rates due to high occupancy. The revenue generated from these attendees is crucial for the downtown area of Las Vegas, but it is unlikely to offset the significant losses experienced on Las Vegas Blvd.
Residential individuals frequent the downtown area more frequently compared to the bustling Strip.
When it comes to the Strip, it's not easy to come across locals who are regulars. The combination of paid parking and exorbitant prices makes it unattractive for those who reside in the Las Vegas Valley. However, downtown has a different vibe altogether, resembling more of a lively street celebration with a bustling bar scene in Fremont East that is popular among the locals. While tourism might suffer during this period, the impact on local visitation will not be as significant.
Boyd Gaming, the proprietor of seven locals casinos, holds a wealth of information on local players within their downtown casino database. In order to attract residents to Fremont Street, particularly if neighboring locals casinos have either not resumed operations or have reduced them during the initial phase, enticing staycation and free play offers may be extended to the locals.
Fremont Street attracts the attention of the millennial and Gen Z populations.
The older age groups will likely experience the heaviest impact from the loss of leisure tourism, as the coronavirus poses a significant threat to their health. Fremont Street, on the other hand, caters to a different crowd and is not specifically targeted at those tourists. It is a vibrant street party that goes on all night, with alcohol flowing freely. The younger generation, who are more prone to taking risks, may be more inclined to visit Fremont Street despite the health concerns, especially considering the recent drop in hotel rates.
Circa is set to revitalize Fremont Street, breathing new energy into the iconic area.
In December 2020, the long-awaited Circa will finally open its doors on the historic grounds once occupied by the Las Vegas Club. Spearheaded by Derek Stevens, the mastermind behind Golden Gate and The D, this ambitious project marks a significant milestone for downtown Las Vegas. After years of anticipation, the city will witness the birth of a new resort, the first of its kind in decades, as Circa emerges from the ashes of the past, ready to redefine the landscape of Sin City.
Circa, the forthcoming resort on Fremont Street, promises to become a major draw for both visitors and residents. Despite the fact that the economic climate is not as favorable as initially anticipated, the resort is expected to thrive due to its advantageous position in a market less susceptible to the downturn than the Strip's new developments. This strategic advantage ensures that Circa will continue to attract a steady stream of tourists and locals, solidifying its position as a must-visit destination.
Downtown Las Vegas offers exceptional affordability.
In the vibrant heart of Las Vegas, the downtown casinos reign supreme, providing an unparalleled value compared to their counterparts on the iconic Strip. These havens of entertainment boast not just one, but four casinos featuring video poker machines that yield an astonishing return of over 100 percent. Moreover, the allure of craps tables is irresistible, as they generously offer odds that can reach a staggering ten times the original bet. However, Main Street Station takes it to another level entirely, captivating gamblers with an astounding twenty times odds. When it comes to blackjack, several casinos graciously pay out at an impressive rate of 3:2 for every blackjack hand, a favor not bestowed upon those frequenting the Strip. Additionally, the downtown casinos prove to be more accessible to budget-conscious players, with a minimum bet for table games frequently set at a modest $5. Moreover, when hunger strikes or the desire for some retail therapy arises, downtown establishments cater to patrons' needs by offering a wide array of dining and shopping options at reasonable prices. Alas, this harmonious balance between quality and affordability remains elusive within the glamorous confines of the Strip.
Not dependent on VIP gamblers.
During the final week before the casinos closed down, I strolled through the bustling establishments, taking note of the distinctive atmosphere. As I ventured along the famous Strip, I couldn't help but notice a conspicuous absence of players within the high limit salons and slot areas. These particular individuals, who hold great significance for the Strip's casinos, seemed to be few and far between. However, the scene was quite different in Downtown Las Vegas. Out of the three casinos I explored – Golden Gate, Golden Nugget, and The D – only these establishments offered high limit salons. Yet, these areas did not leave a lasting impression of being a significant part of their operations. Comparatively, the minimum bet in these salons typically ranged between $25 and $50, whereas on the Strip, wagers started at $100 or even higher.
Not all positive updates
Downtown Las Vegas is currently grappling with several challenges. It is anticipated that tourism in the area as a whole will experience a decline. Unfortunately, this downturn will also affect Fremont Street, which will not be exempt from the consequences. The hotels located on Fremont Street can expect to see a decrease in occupancy rates for the foreseeable future.
Tourists from Hawaii have a special affinity for Downtown Las Vegas, making it a popular destination for them. Unfortunately, this particular group of tourists is causing a significant blow to the Boyd Gaming properties. The latest earnings report from the company highlights the challenges they face due to travel advisories originating from the islands. These advisories not only hinder visitation from Hawaii but also potentially delay the reopening of the company's three downtown properties.