Casinos consider asset-light model

[Bazz]

From Reuters

By Kyle Peterson

LOS ANGELES (Reuters) - Casino companies with expensive properties in Las Vegas are considering following some major hotel operators in shedding their real estate to focus solely on operating the properties, industry leaders said.

The so-called "asset-light" model has become increasingly popular among hotel companies, but casino owners are approaching the concept cautiously.

Full piece can be read here.

[Scrooge]

It is an interesting idea, I am not sure to many of the companies will go for it though, if only because of the amount of revenue that comes from the hotel rooms etc.

Hilton is bad example for the reporter to use, he should of also pointed out that while yes 10 years ago 90 percent of their profits came from company owned hotels he kind of left out the fact that the vast majority of that income came from one section of the company...gaming...the hotel/casino's in Vegas and Atlantic city bank rolled the Hilton corp for a number of years.

[Bazz]

It would certainly free up huge amounts of dosh for groups like MGM - Mirage and Harrahs, with the money available to finance further expansion in other marketplaces around the world.

[Scrooge]

Yes it would, however they would then be at the mercy of the landlords when it comes time for renovations etc.

Companies like the Millennium Management Group have been able to create a little niche for themselves, however I just cannot see most casino companies going that way.

There is plenty of money out there for the casinos to finance any expansion they want.