The value of shares in some of Nevada’s most prominent casino operators reportedly dropped dramatically yesterday amid ongoing fears that the appearance of the coronavirus strain in ‘The Silver State’ could significantly reduce tourist numbers.
According to a Thursday report from the Reno Gazette-Journal newspaper, Nevada recorded its first case of the highly-contagious coronavirus contagion yesterday with this news subsequently helping to immediately push the individual price of shares in local casino giant Las Vegas Sands Corporation down by approximately 4.1% to $54.88.
The newspaper reported that this decline was even more serious for Caesars Entertainment Corporation as its stock value crashed by 5.69% to $11.27 while Boyd Gaming Corporation suffered a 9.3% diminution to $22.43. Even more pronounced was the purported 9.5% decrease for Wynn Resorts Limited to $95.62 while investors in MGM Resorts International were seriously hurt courtesy of an 11.5% decline to $20.60.
However, the Reno Gazette-Journal reported that Red Rock Resorts Incorporated, which is responsible for Las Vegas’ 796-room Red Rock Casino Resort and Spa, experienced the biggest associated one-day plunge yesterday as the value of its shares fell by about 13.8% to $16.53.
The newspaper moreover reported that the Dow Jones Industrial Average chalked up its worst performance in some two years yesterday owing to anxiety over the viral outbreak that began in China while Mark Haefele, Chief Investment Officer for UBS Global Wealth Management, reportedly used a note to declare that he expects the Nevada casino market to ‘remain volatile’.
Reportedly read the filing from Haefele…
“The unfolding nature of the coronavirus threat, both real and perceived, is not yet quantifiable, and as such, the current global policy response can’t immediately be judged as sufficient or insufficient for restoring investor confidence in the short-term.”
For its part and the Las Vegas Review-Journal newspaper cited a Tuesday report from the United States Travel Association yesterday in warning that international travel to the United States is due to fall by around 6% over the course of the next three months. Such an outcome would purportedly represent the largest drop since the ‘Great Recession’ of the 2000s and could subsequently negatively impact gaming and tourism numbers in Las Vegas.
The Las Vegas Review-Journal quoted Barry Jonas from investments firm SunTrust Robinson Humphrey as proclaiming that aggregate individual hotel room rates across the Las Vegas Strip had recently dropped by about 27% although associated gaming volumes are remaining ‘stable to slightly up in the face of declining forward room rate pricing’.
Jonas reportedly told the Las Vegas Review-Journal…
“Our room rate analysis and recent news flow suggest some impact may be imminent. Near-in rate contractions have accelerated while far-out bookings could be seeing weakness.”