Exxon Biggest Quarterly Profit in US History as Airlines, Vegas Suffer
The Las Vegas gaming industry has taken quite the hit as a result of US economic woes despite previous beliefs that gambling was a "recession proof" industry. It actually still may be but that philosophy did not take into account the price of getting to Vegas. $4.00 plus a gallon of gas and air fares going through the sky as a result of escalating oil prices.
The idea that Exxon reported the biggest quarterly profit ever by any U.S. corporation during a time when Vegas and others are hurting has sent shockwaves throughout America on Thursday, and Vegas interests are among those surely pounding their fists.
Second-quarter earnings of $11.68 billion were reported by Exxon and The world's largest publicly traded oil company said net income for the April-June period came to $2.22 a share, up from $10.26 billion, or $1.83 a share, a year ago.
The sharp rise in oil has forced airlines to cut flights to and from Las Vegas with the biggest impact to be felt this fall when most scheduling alterations go into effect. Some smaller cities like Lincoln, Nebraska will lose direct Las Vegas flights all together. Allegiant Air has decided to pull that particular route. Still others will lose flight frequencies.
US Airways Group announced it was cutting nearly half its Las Vegas flights as part of companywide belt-tightening earlier in July.
Soaring fuel prices are forcing airlines to cut flights and jack up fares to Sin City. Road trips have become luxury, writes Oskar Garcia of the Associated Press. And tourists who do make it to Las Vegas are spending less, leading casinos to offer deals just to keep them in their resorts.
"The overall economic uncertainty this country is facing ... makes the outlook for the next several months very murky," said Gary Thompson, spokesman for Harrah's Entertainment, owner of seven Las Vegas casinos.
Casino operator Las Vegas Sands has lost around 70 percent of its stock value over the last nine months.
Las Vegas hotel occupancy fell 2 percent in the five months through May from a year ago, dragged down by a 9.7 percent decline in nights spent by convention attendees, according to data from the Las Vegas Convention and Visitors Authority.
In Clark County, where Las Vegas is located, gambling revenue dropped 16 percent in May, its fifth straight monthly decline, and was down 6.4 percent for the year, Nevada's Gaming Control Board said July 10. Las Vegas home prices peaked in August 2006 and have fallen 29 percent since, according to the S&P/Case-Shiller Home Price Index.
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Jagajeet Chiba, Gambling911.com
