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Gaming Guru

Steve Green
 

Adelson 'holding up quite well' despite recession

11 March 2009

LAS VEGAS, Nevada -- Las Vegas Sands Corp. Chairman and Chief Executive Sheldon Adelson today said business remains sound for the company in Las Vegas despite concerns about the recession, a decline in corporate travel and the replacement of his top corporate lieutenant.

"We're holding up quite well,' Adelson said at the Deutsche Bank Hospitality & Gaming Conference in New York.

Adelson said that at the company's Venetian and Palazzo resorts on the Las Vegas Strip, which together have 7,100 suites, the occupancy rate in February was about 93 percent and the average daily room rate was about $225.

"Both of those are up over last year,' Adelson said. "For us, 93 (percent) is scraping the bottom of the barrel, but compared to other properties (in Las Vegas) it's sky high.'

While some financial corporations receiving government bailouts have canceled business meetings and plans to attend conventions in Las Vegas because of congressional and media scrutiny, Adelson said companies in other industries are still sending business people to Las Vegas for meetings and events.

"We've been impacted slightly, but only in the financial (industry) area,' said Adelson, whose company also owns the big Sands Expo Center adjacent to its Las Vegas hotels.

He said mass market hotel visitors are wagering less money in the company's Las Vegas casinos, but indicated the high-roller business is holding up and noted the high-end gamblers account for most of the company's Las Vegas casino win.

"Some (VIP gamblers) are impacted by the recession, but a lot are not,' he said.

Despite the company's stock price continuing to trade below $2, Adelson said Sands' finances are solid and will be bolstered by the sale of two retail malls in Macau, which he said have attracted strong interest from investors. He said the company's massive $5.4 billion resort in Singapore remains on track to open in December or January and, like Macau, will be a "game changer' for the company.

For the fourth quarter of 2008, Sands revenue rose 4.3 percent to $1.9 billion and it lost $111.3 million vs. a profit of $39.9 million in the year-earlier quarter.

Separately, Las Vegas Sands disclosed today that William Weidner was told March 4 he was being fired as president and chief operating officer -- four days before Weidner resigned.

"The company believes that the March 4, 2009, meeting with Mr. Weidner served as notice to Mr. Weidner that he would no longer be employed by the company,' Las Vegas Sands said in a regulatory filing.

The company also suggested the drama isn't over between Weidner and Adelson, saying that after two board members informed Weidner he was being replaced, "the company and Mr. Weidner attempted to negotiate the terms of Mr. Weidner's departure for the next several days, but were unable to reach agreement.'

Weidner said in his resignation later he resigned his executive positions and his position on the board of directors for "good reason' under his employment agreement.

Weidner noted in his resignation letter he has had and continues to have differences with Adelson about the management of the company.

"Last year, with falling stock prices and worsening global economic conditions, disagreements and conflicts arose between me and the chairman, Sheldon Adelson," Weidner told Bloomberg News. "He's the CEO, he's the majority owner, and just recently he's insisted on having more control over the day-to-day operations, and I figured it was time for me to then move on."

Board member and hotel industry veteran Michael Leven will replace Weidner as president and chief operating officer.

Adelson today shrugged of questions about Weidner, but did point out the company's chief strategist and visionary -- himself -- remains on board.

Of Leven, he said, "He's got decades of experience and is probably one of the most well-known and well-liked operations guys in the entire industry.'

Asked if any other top executives will be leaving, Adelson said: "Nobody's indispensable.'

Las Vegas Sands stock closed up 24 cents at $1.66 today. It tumbled 20 percent to $1.42 Monday on news of the departure of Weidner,. a fixture on the Las Vegas Strip and in the Asian gaming markets where he and Adelson developed Sands' resorts.