- Las Vegas casino operators shares and stocks tumble further on Thursday over the Coronavirus spread
- Shares fall as much as 14% recorded
- 12 COVID-19 deaths recorded in the US with more than 200 cases reported across 18 states as of Thursday
- Nevada is one of the states that has recorded a COVID-19 related case
- The outbreak has led to the changing and cancellation of conventions and other business events while also prompting the casinos’ shares and stocks to tumble
Thursday, 5th March 2020, saw Las Vegas-based casino operators record share and stock drop over the rapid spread of the COVID-19 virus.
The local operators saw their shares record as high as a 14% tumble with the Dow Jones Industrial Average recording a 3.6% drop erasing the gains made on Wednesday. Another report has also shown a continued fall in the near-term Strip room rates.
As of Thursday, the US had recorded 12 COVID-19 deaths with more than 200 confirmed cases on the same across 18 states in the US including Nevada. The first Southern Nevada COVID-19 case was confirmed on the same day by the Southern Nevada Health District.
Events changed or canceled
The outbreak has resulted in many of the conventions and business events being changed or canceled. According to David Katz, a Jefferies analyst, he says that among many factors, the outbreak has prompted the casinos’ shares and stocks to tumble.
He stated that in the near-term, Las Vegas tourism and gaming numbers would probably take a hit but stated that it was too early to say the kind of long-term effects that would be experienced by the operators if any.
On the concern of how long the outbreak would last and the degree it would have on the economic activities, David stated, ‘My view is it is more episodic or temporary than something that will impair the business for an extended period of time.’
Recent earning calls from the operators drew a picture of the virus yet to hit the US operations. However, new research has suggested otherwise.
The US Travel Association on Tuesday announced that international travel to the country would fall over the next 3 months by 6% which would spell the largest decline since the Great Recession.
Room rates drop
According to a SunTrust Robinson Humphrey, Thursday published report, the Strip’s room rates were falling amid Coronavirus fears. The room rates at MGM Resort International’s Las Vegas, for example, had recorded a 27% drop rate on March 13th as compared to what was collected on February 27th.
Caesars Entertainment Corp. Strip room rates, on the other hand, were down with 16%, Las Vegas Sands Corp. down with 29%, and Wynn Resorts Ltd. properties recording a drop rate of 22%
The study also notes that the prices are normally unaffected in the months of April and May.
Shares fall as of Thursday
Barry Jonas, SunTrust Robinson Humphrey’s analyst, notes that the recent earning calls have suggested no gaming trends impact over the virus ‘as yet’. He said, ‘Our discussions with operators and manufacturers even suggest Strip gaming volumes remain stable to slightly up in face of declining forward room rate pricing.’
The following is how the shares closed down as of Thursday;
- Red Rock Resort – 13.9% to $16.53
- MGM Resorts – 11.6% to $20.60
- Sands Corp. – 4% to $54.94
- Boyd Gaming Corp. – 9.3% to $22.45
- Wynn Resorts – 9.5% to $95.58
- Caesars Entertainment Corp. – 5.82% to $11.25
The spokespeople for all the companies listed declined to comment.