LAS VEGAS, Nevada - As reported by the Las Vegas Sun: "Skeptics have been suggesting for decades that Las Vegas has built more hotel rooms than can be filled, and still with every economic
downturn, the Strip bounces back with remarkable occupancy rates, stoking even more construction.
It may be the closest that man has come to creating a perpetual motion machine.
But the machine is sputtering now, and will sputter more through 2010, according to two new reports out this week that fret about the number of hotel rooms being added to the market next year.
In their reports, debt analysts at Deutsche Bank and CreditSights zeroed in on the impending flood of new hotel rooms on and near the Las Vegas Strip — a market struggling with an oversupply of rooms, slot machines and gaming tables.
"The challenge for the casinos will be to maintain hotel occupancy even as new supply is brought on over the next 14 months," CreditSights said in its report.
Even without taking into account the 3,815 rooms at the stalled and bankrupt Fontainebleau resort, analysts say new rooms coming online at CityCenter and elsewhere will pressure the Las Vegas industry.
CreditSights noted that lower room rates are helping to fill Las Vegas hotels, but sales of condominium units on and near the Strip have come to a near standstill with 2,200 vacant units on the market..."
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