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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Analyst Predicts Every Room in City Will Be Booked

29 December 2004

The number of Strip resorts posting "no vacancy" signs for the New Year's Eve weekend is growing quickly, with one gaming analyst predicting that every hotel room in Las Vegas will be booked as visitors celebrate the holiday.

As of Tuesday, many Strip resorts reported they had sold out all available rooms for Friday and Saturday nights, with tourists booking rooms for up to $699 a night.

"Even given the fact that Las Vegas has more available rooms than last year, I think you will see record revenues, record occupancy rates, record average daily room rates and record visitation for New Year's," said Marc Falcone, gaming analyst for Deutsche Bank. "Because New Year's falls on the Friday-Saturday calendar, every room in the city will be sold out."

Rooms at resorts such as Bellagio, Las Vegas Hilton, Caesars Palace, Rio, Paris Las Vegas, Palms and Stardust are booked for the weekend, with rates ranging from $225 to $699 per evening.

Other properties, such as Treasure Island ($399 a night), The Mirage ($559 a night), MGM Grand ($350 a night), New York-New York ($239 a night) and The Venetian ($499 a night), have rooms for New Year's Eve but are filling quickly.

"The demand is strong, and we only have a few hundred rooms available (out of 4,027)," said Venetian spokesman Ron Reese. "We anticipate being sold out this weekend."

At Mandalay Bay, rooms can be purchased for New Year's Eve at $359 in the main tower, but rooms in the adjacent The Hotel are sold out at $599 a night.

The average rate for a room New Year's weekend, according to Deutsche Bank, is $375 an evening, down slightly from a similar survey earlier this month. Still, rates are showing a double-digit increase from a year ago, when New Year's Eve fell on a Wednesday.

"Some of the decline is likely the result of the hotels discounting the few rooms they have left in order to sell out," Falcone said. "Last year, the week before New Year's, there were terrorist threats, which drove away some of the long haul travel, but those rooms were taken up by drive-in visitors. This is a very optimistic New Year's for Las Vegas."

One analyst said the end of 2004 could have produced an even larger win for Las Vegas resorts had New Year's Eve fallen on a Thursday so that resorts could benefit from a three-day weekend visitation.

"You will have the high occupancy levels because of the already built-in Friday-Saturday crowd," said Larry Klatzkin of Jefferies and Co. "Because it's New Year's, the properties can charge higher rates, but you can give extra weight to the weekend when the resorts can get a spillover from a three-day holiday."

The biggest question facing the major gaming companies is where the win from the New Year's weekend will be reported, since the fourth quarter of 2004 ends Friday and the first quarter of 2005 begins Saturday.

"We're predicting it could be split pretty evenly between the quarters, but there could be some potential fourth- quarter surprises for some companies," Falcone said.

Some casinos away from the Strip corridor are close to full occupancy. The Ritz-Carlton at Lake Las Vegas is asking $339 a night for New Year's Eve, with just a handful of the property's 349 rooms still available. Resort spokeswoman Bonnie Crail said the property expects to sell out for the weekend.

Properties operated by Station Casinos are still running in the high 90 percent occupancy range, but company spokeswoman Leslie Pittman said the remaining available rooms could be taken by Friday night.

"We have had a higher-than-normal customer call volume, and our bookings are traditionally 48 hours in advance," Pittman said.

Boulder Station is asking $189 an evening, Palace Station is seeking $179, and the Fiesta Henderson is booking rooms for $149 a night. All have a two-night minimum.

Even the 120-room Railroad Pass on the Boulder Highway is booked for New Year's Eve.

"About 40 or 50 of the rooms are set aside for our casino VIPs who frequent us regularly," said property general manager Todd Collins. "This year, we're not seeing the overflow from the Strip. It's pretty much our regular customers."