I was in Las Vegas with my family last week for the first time in about a year.

The naked girders of a planned addition to LVS’s Palazzo are still rusting away as they were a year ago.  And the metal bones of a couple of other casino projects decorate lots across the street from the WYNN resort.

The Trump hotel has opened, with the C-A-S-I-N-O letters removed from the sign on the front that marks the (long) drive from the Strip to the hotel door.  The absence of lights in the rooms after dark indicate that either everyone is wearing night-vision goggles or there aren’t many tenants.

I went into the Cosmopolitan, which is very trendy and has a strange, narrow rectangular casino floor.  And I saw the CityCenter for the first time–hotels, condos, casino and mall.  Very impressive, pretty empty–and an odd-looking casino here, too.

For a while, it looked as if snow would prevent us from flying back to the east coast.  A quick check of travel websites showed plenty of $50 and under rooms around, including at the Mirage.

A number of retail stores have gone out of business but the survivors aren’t sporting the profusion of SALE! banners they were in early 2010. Lots more people in restaurants.  A bunch of new restaurants, as well.

my thoughts

There were many more people around the Strip and in the casinos than I saw a year ago, even though the time we were there was a non-convention week, just after the CES.

Of course, it’s dangerous to generalize from just walking around.  I remember once, when Caesar’s was a public company, going to Atlantic City and seeing the Caesar’s there packed to the gills.  I called the company the following day and commented that they must be happy with the business they were doing.  They weren’t!  A main door was broken in the shut position, so gamblers who had lost all the money they intended to couldn’t get out–and were blocking the way to the slot machines.

Having said that, I’m willing to believe that Las Vegas is on the mend.

My walk brought home, however, just how extensive the hotel overcapacity in Las Vegas is.  Occupancies and room rates will remain low for a long time, I think.  That’s important, since the casinos themselves only account for about half a company’s profits in the good times.  The rest is the hotel.

I also suspect that the two new casinos at Cosmopolitan and CityCenter will end up being more or less overflow capacity that will be filled only when others are packed.  If so, the casino overcapacity isn’t so bad.  The real issue for this part of the business is whether American entrepreneurs (the prime casino patrons) will feel like gambling again.  My impression is that they already are.

The upcoming round of quarterly earnings reports for Las Vegas companies will be interesting.  My guess is that the second-line hotel casinos will suffer the most.  WYNN (I own it) is, I think, the only front-line firm with the financial wherewithal to keep refurbishing its rooms to keep its hotels in tip-top shape.  I wonder if that will make any difference.