According to casino industry analysts, the soon to be opened Resorts World Las Vegas will not earn a profit for 3 to 5 years. The great thing about online casinos like Cookie Casino online is they have very few startup costs making them profitable almost instantly.
The casino is slated to be a mega-resort, costing $4.5 billion to build and featuring 3500 rooms. The casino is expected to be open for business in late 2021. It is estimated the resort is 95% completed, with the building taking place on the 56th floor and the gaming and dining area almost finished. It won’t be long now until you can win big on the gaming floor, enjoy a world-class meal in celebration before retiring to your brand new suite right on the strip for the evening.
Even though the construction process has been smooth for the casino, financial analysts still believe the multi-billion dollar resort will take time time to turn a profit due to depreciation and interest costs.
Analysts have forecasted that the casino will earn before interest and depreciation $80 million in 2022 and $110 million in 2023. These positive earnings will be wiped out by interest costs on the loans used to finance the resort and depreciation of the building, leaving the casino in the red for at least 3 to 5 years.
At a cost $4.3 billion price tag, Resorts World has won the prize of the most expensive strip-based casino in Las Vegas, just edging out the nearby Cosmopolitan, which cost $4.18 billion. With such a hefty price tag also comes big interest payments and debt obligations.
Why Will It Take The Resorts World Las Vegas Casino So Long To Be Profitable?
Industry analyst’s prediction that the Resorts World Las Vegas casino won’t be turning a profit anytime soon is not an attack on the casino. It is very common for newly built resorts to take years to be profitable as in the early years; they have to absorb huge interest costs as they pay down their debt obligations.
Once revenue starts picking, casinos then repay their loans, causing interest payments to significantly shrink, leaving a juicy profit for the gambling operators. This process often takes years. However, it is well worth the wait as after casinos get over that initial loss period, and they can reap huge gains than enrich the company.
The Resorts World Las Vegas Casino is fully aware of the process of becoming profitable and is in a strong financial position to spend a few years as a loss leader before enjoying the fruits of their labor.
Even though casinos are used to waiting years to earn a profit with current pandemic situations, the Resorts World Las Vegas Casino may have to wait a little longer due to the effect of government restrictions and a public that may be reluctant to travel on facility utilization. Analysts believe that utilization will be 50% for 2022, 65% for 2023, and 70% for 2024.