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Inside Gaming Column

Gaming industry boardrooms in Las Vegas are about as close to euphoria as they get. Executives tell us, based on sales booked for next year, they expect the percentage rise in revenue per available room to be up at least in the mid-single digits, and possibly up by double digits. That's based on heavy convention bookings for 2006 combined with record leisure travel bookings. Analysts say Wynn Las Vegas and the new towers at Caesars Palace and Bellagio are driving demand faster than supply can keep up. Plus, no new rooms are scheduled to come on the market in 2006.

Meanwhile, analysts say gaming companies are likely to turn tidy profits thanks to hurricanes Katrina and Rita. Property insurance likely will cover replacement costs for damaged Gulf Coast casinos, some of which will never reopen. Those casinos that do reopen will be much improved, partially at insurance company expense. Business interruption insurance also will cover all of the companies' earnings losses for some six months after casinos reopen, including picking up their idled employees' pay. Wall Street realizes it will take time to settle insurance claims, but expects the black ink to flow.

For New Orleans business, however, the news is grim. The French Quarter and Central Business District are packed, but with Federal Emergency Management Agency contractors and relief workers who are renting 20,000 hotel rooms a day. Initial surveys show 25 percent of the restaurants that helped make the city famous are expected to stay shuttered. And meeting planners tell us associations are really scrambling for meeting space in other cities, especially Las Vegas. Bad news for a city in which occupancy rates already were languishing below 70 percent.

It seems as if Manhattan real estate magnate Bruce Eichner is stealing a page from Sheldon Adelson's playbook. "Eichner's ditch," which you can see just south of Bellagio, is said to be the second-biggest dig in Strip history. Eichner, who is developing the Cosmopolitan with former Venetian executive Tom Friedman and Soros Fund Management, is digging down for parking to maximize usage per acre. Adelson is doing the same thing at the Palazzo, which he is building by The Venetian.

What's all the fuzz about? Suddenly, carousels at the airport for picking up luggage, billboards around town and a ton of taxis are all feathered up with "Avenue Q" lookalikes. It's part of an alternative ad campaign, courtesy of Wynn Las Vegas, that will also appear in in-flight magazines, local magazines and newspapers. Sources close to developer Steve Wynn say he wanted a thought-provoking campaign. Others say he's risking his brand on point-of-sales advertising to boost traffic.

Gaming Wire Editor Rod Smith can be reached by e-mail at rsmith@reviewjournal.com or by phone at 477-3893.

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