Timing of Chinese New Year should push Strip metrics into positive territory, despite flattish airport/taxi data and difficult hold comparisons.
With the eternal caveat of assuming normal hold percentages, we think Strip gaming revenue growth was likely in positive territory in January. Any growth would be impressive considering the unfavorable calendar and difficult hold comparisons. Of course, baccarat volume associated with the timing of Chinese New Year in January this year should be the big offset.
Airport traffic at McCarran increased only 0.3% in January while the number of taxi trips actually fell 0.9%. The primary driver of the flattish transportation statistics was an unfavorable calendar. January of 2012 contained one fewer Saturday. We are also making the assumption that drive-in traffic from California was down YoY due to the one fewer Saturday and high gas prices.
So where does this leave our projections for Strip projections? Overall, our model is spitting out growth of 3-7% for gross gaming revenues, driven by a 70% increase in Baccarat volume – 100% increase in revenue – offset by a 7% and 5% decline in slot and non-Bacc table revenue, respectively. Last year’s slot and table hold percentage was higher than normal – except for Baccarat.
Here are our projections: