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McCarran Airport reported a decline of only 1.2% in September passenger traffic. However, the September revenue comp is the most difficult for the foreseeable future.

A 1.2% drop in enplaned/deplaned McCarran passengers is the smallest since February 2008.  The airport traffic comparison was relatively easy.  Nonetheless, the number was decent and could contribute to positive growth in Las Vegas visitation.  We now project visitation will show ever-so-slight growth - the first growth month since May 2008 - when the Convention Authority reports its numbers in a few weeks.

What's going on?  The calendar was very favorable, hence the easy comparison, with Labor Day weekend falling mostly in August of last year versus September of this year.  We also think the 17.5% year-over-year decline in gas prices in September will help drive auto traffic from California up around 10%.

So revenues will be strong too, right?  Not so fast. We are projecting Strip gaming revenues to fall 13% despite the decent traffic number.  Slot and table hold last September were each a full percentage point above the average.  The high hold % last year contributed a 10% offset to the gaming revenue decline.  Gaming revenues would've fallen around 15% rather than the relatively strong 5% that was reported in September 2009.  Of course our projections assume normal hold percentages this year and relatively stable Baccarat volumes.  Visits from a few Baccarat whales can have a big impact on revenues.  Indeed, an otherwise dreadful August was somewhat saved by strong Baccarat volumes.

The details of our projections are portrayed below.  Investors may be disappointed when the revenue numbers are released in a few weeks, particularly given the potential enthusiasm surrounding last night's airport numbers.

GOOD AIRPORT NUMBERS, TOUGH REV COMP - Estimated Strip Metrics

GOOD AIRPORT NUMBERS, TOUGH REV COMP - McCarran trends sep