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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Few New Year's Eve Sellouts for Vegas Resorts

2 December 2004

LAS VEGAS -- With New Year's Eve landing on a weekend, the average cost of a Las Vegas hotel room for the three-day holiday is up 25 percent from a year ago, a report from a Wall Street gaming analyst shows. And, because of the prices associated with the Friday through Sunday period, only two resorts are reporting sellouts.

Still, most Strip executives are sure their properties will be filled to capacity when the party hits town.

"If you can't sell out New Year's Eve, then you might as well close up shop," Caesars Palace President Mark Juliano said.

In a report compiled by Deutsche Bank, the average nightly room rate for New Year's Eve is $399, representing a 25 percent jump over rates sampled a year ago, one month before the end of 2003.

Also, at the beginning of December a year ago, eight Strip resorts reported being sold out for New Year's. On Wednesday, only the off-Strip Las Vegas Hilton and Rio reported all their rooms are booked for New Year's Eve.

"Last year, New Year's fell on a Wednesday-Thursday, with the bulk of the holiday coming the following weekend," Deutsche Bank gaming analyst Marc Falcone said.

"That may be a huge reason for the discrepancy. There may have been more aggressive marketing activity to fill the rooms at New Year's because it was midweek. Still, our indicators show the booking levels for the crucial New Year's period this year are solid."

According to the report, Bellagio is asking $699 a night for New Year's, Four Seasons is quoting $650 a night, The Venetian is priced at $649 a night, and the Hard Rock Hotel wants $509 a night.

Falcone said the New Year's weekend also provides an interesting challenge for operators; New Year's Eve falls on Friday, and the bulk of the weekend lands within the first quarter of 2005.

"This could have a meaningful impact on both the fourth quarter of 2004 and the first quarter of 2005, in regards to the timing of high-end play and recognition of gaming revenue," Falcone said.

Overall, Las Vegas room rates have been solid for the year. Falcone said prices for the current quarter have increased 11 percent over last year, with the average rate for a night on the Strip at $168.

The New Year's rates will help boost that figure since the prices during the Christmas holiday are traditionally lower. The Las Vegas Convention and Visitors Authority said room rates in Las Vegas had increased 8.5 percent through September.

"Visitor volume is up 5.5 percent for the year and, when there is a demand for rooms, rates typically rise in price," said Terry Jicinsky, the authority's senior vice president of marketing.

"We expect to be at capacity at New Year's, especially with all the excitement surrounding the Centennial."

Last year, the Las Vegas Hilton offered a two-night stay for New Year's with rates ranging from $399 to $499 per night. This year's three-night package ranges from $599 up to $699 per night.

"The packages are obviously higher because of the three-day weekend, but New Year's has always been a traditionally active time for us," Las Vegas Hilton spokesman Ira Sternberg said.

A spokeswoman for the Rio confirmed the property is sold out on New Year's with an average rate of $380 per night.

Juliano said just because Caesars Palace isn't listed among those properties sold out doesn't mean the resort isn't booked. He said blocks of rooms have been reserved for casino customers and aren't available to the general public.

"At this point, I'm not too worried about New Year's," Juliano said. "That's always been a strong time for this property."