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Big parts of the operation just aren't generating any revenue and that is seriously impacting properties on the Strip. The recent announcements that certain casinos are shutting between Monday and Thursday is unprecedented and that is why operators need to rethink their business models in order address ongoing concerns.


market you're talking about. In a regional gaming market, you are by and large doing okay in terms of the business. On average, you make more money from each person that walks through the door in terms of gaming revenue, but those people aren't able to enjoy the other non-gaming assets they used to, whether it’s the buffet, spa or anything else. Tis is interesting as customers are currently content not enjoying these non-gaming assets for a bunch of different reasons.


Tose assets also happen to be lower margin business units within a casino so when you factor in a reduction in the workforce that most operations around the country has had to endure leads itself to a pretty profitable business at the moment. Your expenses have been dramatically reduced, your low margin business assets are still inactive and each customer that walks through the door is generating more money. Although there aren't more customers in total because all of the casinos around the States and the world are having to put capacity restrictions in place, each customer is worth more and that turns into a very efficient operating model. How sustainable that operating model is going forwards is a different question.


On the other hand, if you're an operator on the Las Vegas Strip it's a completely different story.


P120 NEWSWIRE / INTERACTIVE / MARKET DATA


Te physical plant is much bigger and is much more reliant on non-gaming revenue sources.


If you go back to the early 2000s and before, gaming revenue was the majority of the revenue make-up for big integrated resorts on the Strip. From 2005 onwards, the paradigm shifted. Gaming revenue was 66 per cent of revenue for the property and non-gaming revenue formed the other 34 per cent. Tis has now reversed, and it is non-gaming revenue streams that continue to be impacted most by Covid-19.


We touched on some of the non-gaming amenities regionally, but those same challenges exist in in a strip property on top of the significant loss of convention revenue that big properties typically enjoy. Conventions are a high margin business and are well placed on the calendar as they maximise revenue in the middle of the week when there are fewer tourists and lower visitation volumes. Tere is another big revenue source gone.


Big parts of the operation just aren't generating any revenue and that is seriously impacting properties on the Strip. Te recent announcements that certain casinos are shutting between Monday and Tursday is unprecedented and that is why operators need to rethink their business models in order address ongoing concerns.


Is limiting opening hours something you would advise clients?


In the right environment I think it makes sense. If you have a big facility that is expensive just to turn the lights on, typically has a high labour component and very low customer visitation during weekday periods - yes. If you know that you're not seeing enough demand to eke out a profit from Monday to Tursday, then it does make sense. I’m unsure whether that's a long- term strategy, but at the moment you just need to think about what's in front of you and the challenges that lie ahead for today and tomorrow, not next month or next quarter. It really is emblematic of the fact that the gaming industry, particularly on the strip, is taking it one day at a time to keep as many people employed without being shut down due to extreme losses.


How resilient are these strategies? It depends on how you define resilience! If


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