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1999 Was a Watershed Year for Las Vegas Gaming Industry

by Gary Thompson

The fear and uncertainty that gripped the Las Vegas gaming industry as 1999 began have given way to hope and renewed confidence at the dawn of the new millennium.

Soaring stock prices, booming visitor volume, improving Asian economies and the successful assimilation of more than 11,000 new hotel rooms without any drop in occupancy rates have combined to put smiles on the faces of casino executives and many investors.

Even the lower-than-expected crowd over the New Year's Eve weekend hasn't damped the enthusiasm of casino executives, who say advance bookings indicate last year's strong trends should carry over in the year 2000, albeit at a somewhat slower pace.

Las Vegas Convention & Visitors Authority spokesman Rob Powers said Monday the agency won't have final New Year's crowd estimates available for a few weeks. But he said the LVCVA is comfortable with the 240,000 number it predicted a week before the New Year.

"I'm fascinated by some of the New Year's post mortems taking place," said Mirage Resorts Inc. Vice President Alan Feldman. "To suggest that Las Vegas was a bust is laughable.

"The high expectations for big millennium celebrations were universal. Yet Las Vegas raised its room rates to historic levels in the face of competition from cities all over the world, and all we had was an 85 percent citywide occupancy rate."

Feldman said advance room reservations for the next big events here -- Super Bowl weekend and Chinese New Year -- are strong. And he said many long-time visitors who opted to stay home last weekend are likely to schedule trips to Las Vegas over the next few months.

Boyd Gaming Corp. spokesman Rob Stillwell agreed.

"As far as January is concerned," he said, "we're definitely hitting the ground running. The general feeling is that a lot of our customers were just waiting to get New Year's Eve behind them.

"Now there appears to be a lot of pent-up demand for Las Vegas visits, which should add a little to the first few weeks of January."

Overall, the New Year's weekend was uneventful, resort executives said.

"It was one of the biggest non-event events ever, and we're all grateful for that," said Kurt Ouchida of the Venetian. "The hotel and casino were operating at full capacity and the mood was festive but calm."

"It was definitely a holiday weekend, though it didn't measure up to what people had originally expected," Boyd's Stillwell said. "We adjusted our anticipations toward the end of the third quarter.

Feldman said Mirage's Las Vegas resorts -- Bellagio, the Mirage, Treasure Island and the Golden Nugget -- had 95 percent of their rooms occupied, most of them by guests who were "comped."

Table-game play was relatively weak at many big Strip resorts, as higher minimum betting limits drove some customers to locals-oriented casinos and their more modest minimums. Several Strip properties let dealers off early on Saturday night due to slow business.

The overall low crowd count didn't help gaming stocks start off the New Year's first trading session well, either. Gaming stocks followed the general market lower Monday, with all big casino operators posting stock price declines.

Through the end of 1999, most big-cap casino stocks climbed more than 60 percent since last Jan. 1, while small-cap operators fared even better, jumping an overall 150 percent, said Prudential Securities gaming analyst Joe Coccimiglio.

Of the six largest casino companies, only Mirage Resorts saw its stock price finish with a single-digit percentage gain, while shares of Park Place Entertainment, MGM Grand, Harrah's Entertainment, Mandalay Resort Group and Station Casinos all registered big price increases in 1999.

Las Vegas visitor volume soared to nearly 34 million persons in 1999, an 11 percent year-over-year gain that outpaced the 10.1 percent jump in room counts stemming from the openings of five new hotel-casinos and expansions at two other resorts.

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