The bankrupt Monorail isn’t doing much
to help itself these days
By STEVE FRIESS
to help itself these days
By STEVE FRIESS
Up until now, most of us assumed the folks operating the troubled, bankrupt Las Vegas Monorail were doing their best amid so many challenges. Its lousy location, its lack of an airport connection and its lackluster support from the resorts along the route seemed doom-making enough.
What I had never seriously considered was that the folks who run the thing had actually just given up on salvaging the mess. Until now.
Earlier this month, the system reported it lost $23.1 million in 2010, way up from $2 million in 2009, and shuttled 5.2 million riders along its tracks last year. In 2005, it had 10.3 million riders. In January 2010, the Monorail filed for Chapter 11 bankruptcy protection and is now in the process of reorganizing its deluge of debt.
None of this is surprising, but one statistic did provide a shock: The Monorail raked in a paltry $190,000 in advertising revenue in 2010, down from about $2.3 million in 2007. That’s a drop off of nearly 92 percent.
To which I had one thing to say: “Huh?”
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3 comments:
I find it hilarious that Las Vegas can't support a monorail and yet they want to build a train that goes to Victorville.
At this point, I believe the monorail has priced itself out of business with a single ride at
$ 5. When the monorail first opened, I thought it closed at 11 at night, which I always thought was too early if you wanted to use it to go to a nightclub down the strip. Yet when I looked at their website just now, it says the monorail is operational until 2 or 3 in the morning. I wonder when this change happened?
I think it common, and probably good business, to place as much of the liabilities as possible against the bankruptcy, as well as soft-selling income. You need a good and sympathetic partner, so it is done as quietly and smoothly as possible. Vendors who paid $1 million is 2007 might pay $800,000 in 2009, $100,000 in 2010 (because of the bankruptcy) and be so excited by the energy of the reorganized company that they pay $800,000 in 2012. I think when a company is in bankruptcy all bets are off and everything is done with an eye toward the future.
I always had a hunch that the Greenspuns Vegas.com brand was getting pretty much a free ride (no pun intended) with their wrap on one of the trains.
A couple of years ago, you got a free monorail ticket with any purchase from Vegas.com (except I think for dining reservations). I conjecture that the Greenspuns cut a deal where in return for them helping promote the monorail, they got their wrap on one of the trains for cheap or free.
It would be interesting to see if the Greenspuns are still getting a cheap (or free) deal to have their wrap on the train. Something is really fishy when the total of ALL advertising is as small as you've noted.
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