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The resorts and casinos industry is comprised of companies operating standalone resorts, casinos, or combination casino/resorts.

The majority of casino operators run combined casino/hotel facilities, although there are stand-alone casinos as well. The U.S. casino industry took in $34.13 billion in 2007,[1] a 5.3% increase from the $32.42 billion it took in in 2006.[2] According to American Gaming, the Las Vegas Strip was the most profitable region in the United States, taking in $6.75 billion in 2007,[3] while Nevada as a whole took in $11.80 billion in casino revenues.[4]

In 2007, the hotel industry took in $139.4 billion in revenue, a 4.5% increase from the year before ($133 billion).[5] However, analysts at Hotels Magazine believe that rising oil prices and an otherwise struggling U.S. economy will hurt the hotel industry in 2008,[5] with many hotel companies already feeling such negative effects in 2007.

Companies Involved


This group consists of companies that offer lodging services in facilities such as hotels and ski resorts. Many of the hotels in this segment obtain business through the practice of franchising, in which one company (such as Marriott International (MAR)) allows another (such as Lodgian (LGN)) to use its trademarks.[6] This group also receives revenue from the hotel or resort portions of casino facilities throughout the United States.

  • Marriott International (MAR) is a worldwide operator and franchiser of hotels and related lodging facilities. The company's revenue is divided into five segments, including International Lodging, Timeshare Lodging, Luxury Lodging, North American Limited-Service Lodging, and North American Full-Service Lodging.[7] Marriott's 2007 revenue was $13 billion.[7]
  • Starwood Hotels & Resorts Worldwide (HOT) is the hotel company behind brand names such as Westin Hotels and Resorts, Sheraton Hotels & Resorts, and W Hotels.[8] Starwood operates in 5 continents, with $2.45 billion (39.8% of total revenue) coming from the United States in 2007. Its total 2007 revenue was $6.15 billion.[9]
  • Intercontinental Hotels Group (IHG) is the largest hotel company in the world by number of rooms, with 590,361 rooms in over 100 countries worldwide.[10] IHG makes most of its money through the franchising of hotel chains such as Intercontinental Hotels and Resorts, Crowne Plaza Hotels and Resorts, Holiday Inn, and Holiday Inn Express. Its total revenue in 2007 was $1.86 billion.[10]
  • Great Wolf Resorts (WOLF) is the largest North American operator of family resorts.[11] These resorts, located in eight states and Ontario, Canada, feature indoor waterparks and other family-oriented entertainment activities.[11] Great Wolf owns and operates nine Great Wolf Lodge resorts, which are its signature northwoods-themed resorts, and one Blue Harbor Resort, which is a nautical-themed resort. In 2007, its revenue increased by 28%, up to an approximate $187.58 million.[11]
  • Lodgian (LGN) is an independent owner and operator of 46 hotels in 24 states and Canada. It operates its hotels under popular brands like Hilton, Holiday Inn, Marriott, and Wyndham.[12] Its revenue increased by 6.2% in 2007, up to $278 million overall. Its largest segment - Rooms - was responsible for 75% of its 2007 revenue (approximately $208 million).[12]
  • Vail Resorts (MTN) is a resort company that operates ski resorts (where it also has skiing and snowboarding schools), luxury hotels, and real estate in and around the company's resort communities.[13] The company operates in four states in the western United States: California, Colorado, New Mexico, and Wyoming.[13] Vail's 2007 revenue was approximately $941 million, with the majority of its revenue (66%) coming from its Mountain segment, which consists of revenue from its ski resorts.[13]


This group consists of revenue obtained from net gaming win in casino operations around the world.[3] As such, the companies involved in this segment include both stand-alone casinos and more popular casino/hotel facilities.[3]

  • MGM MIRAGE (MGM) runs hotels and casinos in markets around the world, primarily in gambling hotspots Las Vegas and Macau. MGM is the name behind the most profitable casino in Las Vegas (the Bellagio), and one of the most recognizable casino operators in the industry, with an estimated 18% share of the Nevada casino market.[14] Its 2007 revenue was approximately $7.95 billion, with an estimated $2 billion coming from its casino operations in Nevada alone.[14]
  • Las Vegas Sands (LVS), like MGM, also primarily operates its hotels and casinos in Las Vegas and Macau. Las Vegas Sands is perhaps best known as the company behind the Venetian, the second most profitable casino in Vegas behind MGM's Bellagio.[15] Its 2007 revenue was $2.95 billion, and its $405 million Nevada casino revenue was enough to earn it a 3.4% of the Nevada gaming market.[15]
  • Harrah's Entertainment (HET) is a private company that operates casinos and resorts primarily in the U.S. and U.K.[16] The company's 3 million square feet of casino space make it one of the largest casino operators in the world.[16] Harrah's earned $2.5 billion in 2007 from Nevada casino operations alone, giving it a commanding 21% share of the Nevada market.[16]
  • Penn National Gaming (PENN) owns casinos, racetracks, and other betting facilities in 14 states and Canada.[17] These 14 states include Pennsylvania, Colorado, Florida, Iowa, Missouri, and Mississippi.[17] In 2007, Penn Gaming's revenue was nearly $2.5 billion, with an estimated 87% coming from its Gaming segment and the other 13% coming from its Non-Gaming segment, which consists of lodging services and food sales.[17]
  • Wynn Resorts (WYNN) operates casinos in Nevada and Macau, obtaining about half of its overall revenue (approximately $2.86 billion in 2007) from operations in each location.[18] It has an estimated 8% of Nevada Casino market share, with approximately $1.30 of its revenue coming from its Nevada operations in 2007 (45% of total revenue).[18]
  • Century Casinos (CNTY) develops and operates gaming establishments and related lodging and restaurant facilities in 4 countries worldwide: the United States, Canada, South Africa, and the Czech Republic. Century's revenue increased by 57.2% in fiscal 2007, up to $91.65 million.[19]
  • Monarch Casino & Resort (MCRI) owns and operates the Atlantis Casino Resort Spa, a hotel/casino facility in Reno that boasts 50,000 square feet of casino space.[20] Monarch's revenue increased by 5.2% in 2007, up to a total of $159.86 million.[20]


Casino equipments

Hotel REITs


Expedia (EXPE)

Key Trends and Forces

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Domestic Crude Oil Prices per Barrel: Inflation adjusted for 2007 prices[21]

Slowdowns in the Transportation and tourism industries negatively affect out-of-state business for both casinos and hotels

Casino/resort operators depend heavily on overall economic strength for their revenue, as people tend to travel only when they have enough disposable income. In the first half of 2008, however, the price of crude oil rose to $98.66/barrel, up 76.8% from the year before.[21] With this increase came the obvious increase in the price of jet fuel, as prices rose from $850/metric ton at the beginning of 2008 to $1300/ton by June.[22] The increasing fuel costs caused increasing airline prices,[23] which in turn lowered the number of tourists who came to casinos in 2008.[24] For example, MGM MIRAGE, which depends mostly on tourism for its revenue, saw a decrease in revenue growth in 2007, from 17% in 2006 to a mere 7% in 2007.[25]

Economic cycles that decrease disposable income hurt the gambling industry

In 2008, domestic disposable income suffered from factors such as the previously mentioned all-time highs in oil prices, and a struggling U.S. housing market. These factors have contributed to shaky consumer confidence in the casino industry, sending the Applied Analysis Gaming Index, which includes casino operators and gaming machine manufacturers, down by 15.7 percent in January 2008.[26] While increasing oil prices have affected casino revenue from out-of-state travelers, decreasing disposable income has had an equal effect on in-state customers, as gambling is a luxury activity. As an example, same-property revenue for Isle of Capri Casinos (ISLE), which depends mostly on in-state customers for business in its U.S. casinos, fell by 13.6% in 2007.[27]

The seasonality of the hotel industry causes increased revenues in Q2 and Q3, and decreased revenues in Q1 and Q4

Tourists are more likely to travel during seasons with better weather conditions, and as a result, tend to go on vacations during spring and summer (Q2 and Q3 of a fiscal year) instead of winter or fall (Q1 and Q4).[28] Because the majority of hotel customers are tourists, this seasonality greatly affects the hotel business. For example, Wyndham, a company with a 2007 revenue of $4.36 billion, obtained $2.32 billion in combined Q2 and Q3 revenue, a 13.3% increase from the $2.04 billion in combined Q1 and Q4 revenue.[29]

Market Share

CHH Analyst Presentation, August 2007
CHH Analyst Presentation, August 2007[30]

As of January 2007, no one hotel brand commanded more than 12% of overall market share, with Wyndham leading the way at about 11.5%. In all, six hotel brands commanded at least 4% of the overall U.S. hotel market.[12]

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2007 Market Share by Revenue: Nevada Casinos

The U.S. casino industry took in $34.13 billion in 2007,[1] a 5.3% increase from the $32.42 billion it took in in 2006.[2] Nevada is the state with the highest revenue from casino operations, with an estimated aggregate $11.8 billion in revenue in fiscal 2007,[4] good for 34.57% of the overall U.S. casino market.[1] MGM does not separate its casino revenue by geographic location, so its $2 billion in Nevada casino revenue is an estimate based on the fact that 68% of its available casino floorspace is in Nevada[31] and its overall casino revenue for 2007 was $3.24 billion.[32] This would place its approximate market share at 15-20% of the overall Nevada gaming market. Wynn's market share is an estimate based on taking the percentage of casino revenue on its total revenue (73%) and multiplying it by Wynn's net revenue from its Nevada operations.[18]

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