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Slowdown Hits Las Vegas19 December 2000LAS VEGAS, Nevada – Dec. 19, 2000 – As reported by the Wall Street Journal: “After a two-year run of rising room rates and tight reservations in America’s gambling mecca, casinos since November have been cutting room prices in order to draw in customers. What’s more, overall gambling revenues on the Las Vegas strip declined 9.4 percent in September, the first such fall since December 1998. “`Typically, when you see room rates coming down like this, it signals a decrease in consumer interest,’says Harry Curtis, an analyst with Robertson Stephens in New York. “…Mr. Curtis says the slowdown is likely to be fairly subdued, much like what Las Vegas suffered amid a booming national economy in 1998, when the opening of new hotels drove down occupancy levels and resulted in room-rate reductions of about 2 percent. “…Casino operators say the jury is still out on whether the market is moving decisively into a downturn. “…James Murren, president and chief financial officer of MGM Mirage, which owns the Bellagio, MGM Grand, Mirage and other casinos, argues that room-price comparisons are faulty because they don’t take into account special events and other one-time occurrences. “…Adding to Las Vegas’s troubles, its hometown National Airlines filed for bankruptcy-law reorganization earlier this month, saying it can’t afford rising fuel prices. If the airline, which opened in May 1999, should shut down, nearly 100,000 travelers a month will be forced to seek other transportation into Las Vegas. “That could present a blow to casinos. This year, about 28 percent of MGM Mirage rooms were filled by people who flew on National Airlines, compared with 18 percent for Mandalay Bay, 14 percent for Park Place and 10 percent for Harrah’s, according to National Airlines research…” |