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Inside Gaming Column: Vegas Needs Condos to Match the Competition

24 April 2006

The development of condominium projects here may be a game of catch-up, a new report out of Applied Analysis, a Las Vegas-based financial think tank, shows. Out of the top U.S. markets, Las Vegas ranked 22nd in share of the total housing market that are condominiums. Topping the list were West Palm Beach (almost 30 percent), Honolulu, Fort Lauderdale, Miami, northern New Jersey and New York City. But even Detroit, Boston and Houston led Las Vegas (with barely 5 percent condos). Developers say with its high income, boomer residents and visitors, Las Vegas should be near the top, not the bottom.

West Coast chatter suggests the expected $1 billion expansion at Caesars Palace is designed to compete with Wynn Las Vegas, The Venetian and Bellagio. Word is that owner Harrah's Entertainment plans two projects in one -- another new tower, like the Augustus Tower and a new sports arena -- to return Caesars to its glory days as the prime venue for top-flight boxing. Big sport events would let casinos raise minimum bets as much as four-fold. They would also help fill rooms, building amenity revenues.

March Madness this year underscored a marketing trend. Gone are the days when you knew where your favorite games, dealers and slot machine were. Now casinos reconfigure their floors almost daily to match the demographic profile of the guest du jour. During March Madness, marketing gurus had craps and blackjack where slot machines had been. They knew just what their guests wanted to play and had it at the ready.

Investor interest in the Riviera is surprising, especially in light of Boyd Gaming Corp.'s plans to close the Stardust around the holidays. Industry insiders say the Riviera has to wait for the opening of Boyd's 5,300-room Echelon Place in 2010 to see significant increases in foot traffic. The Riviera anchors the north part of the Strip with Circus Circus, which has 3,764 hotel rooms, and is bordered to the north by condos that won't provide sufficient foot traffic.

Industry insiders say visitors from California, the single biggest source of Las Vegas tourists, are disgruntled by show prices. That's not surprising with the average ticket up about 20 percent from last year. Even the highest income respondents to recent polls say they won't go to shows approaching $200 a seat. Ditto for shows that have been cut to a Cirque du Soleil 90 minutes. And ditto for restaurants that are pricier than those back home in LA. Quality matters, but price remains a factor for Las Vegas vacations, even for some of the richest among us.

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

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