Bottom? Has anyone seen the bottom?
So the experts tell us we’re bouncing along the bottom of the latest version of the recession. If you’re in Las Vegas or Atlantic City, the bottom would look nice. But I’m not sure we’re there.
If you’re in Macau, the bottom has a false floor, as the Chinese government re-imposes visa restrictions to cut the legs off of a mini-recovery.
If you’re in Europe, you can never tell whether times are good or bad because the taxes are so high and regulations so oppressive. And in Russia, you might as well find another country.
If you’re in Australia, the recession began more than five years ago when the state governments panicked and imposed some ill-considered restrictions on gaming in the name of problem gambling remediation.
But if you’re in South and Central America, it’s “what recession?”
So while the global economic downturn has different meanings and impacts around the world, I believe it has one silver lining common to all jurisdictions: opportunity.
Just look at the meltdown of the U.S. stock market-particularly gaming stocks-last year. Stocks like MGM Mirage, Las Vegas Sands, Boyd Gaming, IGT and most others hit new lows-dramatic lows that no one ever thought we’d see and still have viable companies.
Well, savvy investors jumped on those stocks and now they have rebounded substantially. Maybe not to the levels from which they fell, but still increasing from those lows by hundreds of percentage points.
Investors who understand the gaming industry can still find some values, although it takes a bit more research and courage than it did last year.
For those who have the financial resources to buy a casino resort, now is the time. We saw Phil Ruffin pay $750 million for Treasure Island in Las Vegas, once a $1 billion-plus property. In Atlantic City, a group led by Carl Icahn bought the Tropicana for $200 million (and that wasn’t even cash, just debt forgiveness). And now Penn National is bidding less than $300 million for the unfinished Fontainebleau in Las Vegas-a property that has already cost $1.5 billion. (Of course, another $1 billion will be required to finish it.)
There are plenty of other properties available around the world if you have enough money and enough business acumen to know which ones are potentially profitable.
Executives can also make their mark in this economy. If you are a traditional, follow-the-rules kind of person, it’s probably not going to happen for you. But if you push the envelope, get creative but frugal, motivate your employees and produce results, then you’ll probably go farther than you would have before the world changed.
Even at lower levels, employees who deliver the customer service, come up with new ways to make players happy and can pass that knowledge on to fellow employees have a great chance to advance.
And don’t think customers don’t understand that they also have opportunities. Heck, when room rates drop from $350 a night to $150, they know something is up. Many of them remember the old days, when Vegas gave away the store. The challenge for gaming companies is going to be catering to those customers and making them feel that they’re getting the store when they’re really not. That perception can come in many ways-it’s all about delivery.
Vendors to the gaming industry have not sat still while crying about a lack of business. Almost to a company, these creative vendors have spent the time developing new and improved products and services. So when the economy returns, these companies will be off and running.
Even in my business, there’s opportunity in this down economy. Not only is the gaming world changing for my company, but the media world as well. So we have something of a double challenge, but one that is exciting.
We were the first gaming company to produce podcasts, so it’s that commitment to technology that is driving our new products and services. GGB News, the only interactive weekly e-newsmagazine, comes out every Monday (www.ggbnews.com). Our blog gives you insight into some of the most gripping issues in the industry through my eyes and those of our writers (blog.casinoconnection.com). And once we determine how to best serve our readers and advertisers, you’ll find us on Facebook, Twitter and other of these fascinating social networking tools.
So times are tough, but they will get better. And the companies and individuals poised to take advantage of these once-in-a-lifetime opportunities will be the success stories of the future.