[guinnessjim]

Originally Posted by dude66

Actually you're wrong.

This chart shows it:

Inflation adjusted Oil Price Chart

The RED line is inflation adjusted price of oil. It's now higher than it was in the 1970s.

Keep in mind that chart is only a month old and is already out of date. It ends at $117/barrel. Well, we hit $145 last week, so it's even worse. The graph would now extend an entire line up.

ummm...yikes.

[ClarkGrisowld]

Energy costs have gone up, but what is more relevant to the typical tourist Vegas now attracts is overall inflation. It is creeping up again, beyond what the Fed is comfortable with, but has been in the 2-3% range for the better part of 20 years. Gas has a mental effect on perception, but the wealthy tourists eventually will adjust. Again, you have to look at overall inflation and so people with large disposable incomes that shell out in a big way to Vegas will adjust. For these people, increases in energy is being offset in other areas.

Housing has had a much bigger effect than gas. That's significant real wealth for even the well-to-do and they are feeling that.

We'll see what Q2 and the rest of the year brings, but thus far revenues are down about 3% on the Strip. Hardly cause for panic. Below GDP growth (which was 0.9% in Q1), but fairing better than many sectors. However, case in point, off-Strip gaming revenue (I'm including all the revenue streams for the casino, hotel, etc..) is down about 9%.

I do have a hard time seeing how the industry will absorb a 30% increase in capacity the next few years. But that's what people said about the last two expansions. It is different, this time however, with the global growth of gaming.

I don't expect the Strip and Vegas to crash, but ROI is probably permanently down. We'll recover, eventually, and see some growth but my guess is this is the last big expansion and we are probably closer than most want to admit to peak revenues. However, if projects such as City Center succeed in transforming Vegas into a truly cosmopolitan city (and it requires more than that, more arts and culture and, more importantly, other good paying white collar jobs) then all bets are off.

Very low probability for that scenario, but it's greater than zero. The water issue is a huge concern. If this is a long-term climate change and not just a drought, then we are in trouble. But as water becomes more scarce and goes up in price, de-salinization plants become economically viable. Again, I don't know what that takes, could be double or triple or more where prices are at now.

[dude66]

Originally Posted by ClarkGrisowld

But as water becomes more scarce and goes up in price, de-salinization plants become economically viable. Again, I don't know what that takes, could be double or triple or more where prices are at now.

Good, reasonable post, ClarkGrisowld. But... here's the problem. What do you suppose you'll need to power those desalination plants? Maybe something called "oil"? And when oil hits $200, how feasible will that ever be? See the problem?

Lest people call me "silly" on this point, consider today's Wall Street Journal:

"Oil's historic ascent from $100 to nearly $150 a barrel in just six months is lending weight to a far grimmer prediction: Crude could reach $200 a barrel by the end of the year."
source: Oil's Rapid Rise Stirs Talk of $200 a Barrel This Year - WSJ.com

(And before someone trots out nuclear power, remember that a nuke plant takes 10 years to zone and build and many billions of dollars we don't have.)

Which just goes to show that these pie-in-the-sky predictions of Las Vegas' never-ending expansion are utterly without a clue. There IS a limit on growth. We haven't hit it yet, and that has made people naive enough to think the limit somehow doesn't exist. But it does. Resources (water) and energy (oil) are finite. We're just now beginning to see the first real rumblings of this fact in 2008 but I guess some are turning a deaf ear to it -- probably those with a vested interest in the thousands of new hotel rooms, condos, and houses springing up all over the place. This is news they don't want to hear.

Sorry. No way around it (unless Olecapt has some secret combination water well/oil derrick in his backyard he'll share with the rest of us.)

[AA702]

Originally Posted by dude66

Good, reasonable post, ClarkGrisowld. But... here's the problem. What do you suppose you'll need to power those desalination plants? Maybe something called "oil"? And when oil hits $200, how feasible will that ever be? See the problem?

Lest people call me "silly" on this point, consider today's Wall Street Journal:

"Oil's historic ascent from $100 to nearly $150 a barrel in just six months is lending weight to a far grimmer prediction: Crude could reach $200 a barrel by the end of the year."
source: Oil's Rapid Rise Stirs Talk of $200 a Barrel This Year - WSJ.com


Which just goes to show that these pie-in-the-sky predictions of Las Vegas' never-ending expansion are utterly without a clue. There IS a limit on growth. We haven't hit it yet, and that has made people naive enough to think the limit somehow doesn't exist. But it does. Resources (water) and energy (oil) are finite. We're just now beginning to see the first real rumblings of this fact in 2008 but I guess some are turning a deaf ear to it -- probably those with a vested interest in the thousands of new hotel rooms, condos, and houses springing up all over the place. This is news they don't want to hear.

Sorry. No way around it (unless Olecapt has some secret combination water well/oil derrick in his backyard he'll share with the rest of us.)

There is also coal powered electricity plants, wind, hydro-electric, solar, hydrothermal (or is it geothermal?). The technology is out there. It would be better for CA to use those desalination plants because they are also included in our western drought.

The Aussies are already ahead of the ball, as their country is in a worst drought than we are in.

http://en.wikipedia.org/wiki/Kwinana_Desalination_Plant

[stainless55]

Its the airport and all the grief and humiliation you go through to get past security!

[surfbh]

This post clearly illustrates why you need to visit barackobama.com and vote for him in November. Or you can have a meltdown!

[sheriff]

Wynn LV reported earnings for the quarter--------no problem, only down 24% in LV ----let's build more rooms.

[sheriff]

Say it ain't so----------20% of the work force at the glorious Trump Towers LV have already been given their walking papers: Trouble at Trump Towers

[sheriff]

You heard it first here-------the Veer Condos at City Center are "veering" a little TOO much, and will require major repair. Apparently, "under" engineered.

[Buzz123]

Originally Posted by stainless55

Its the airport and all the grief and humiliation you go through to get past security!

It's easier at McCarran than at most other airports I've been to in the last couple of years.