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Stand-Alone Strip Casinos Also Cutting Jobs

LAS VEGAS, Nevada – Sept. 25, 2001 -- The Strip's oldest stand-alone hotel-casinos are fighting the city's recent tourist slowdown by laying off workers and cutting employee work schedules, property executives said Monday.

Single Las Vegas Boulevard hotel-casinos not owned by Strip heavyweights MGM Mirage, Park Place Entertainment or Mandalay Resort Group face the same challenges confronting the big operators after the Sept. 11 terrorist attacks.

Air service disruptions and a general reluctance to travel have cut recent Las Vegas hotel occupancy and pressured room rates.

An estimated 73 percent of the city's nearly 125,000 rooms were expected to be occupied this past weekend, leaving about 187,500 visitors in town.

Las Vegas megaresorts are accustomed to weekend occupancy rates of nearly 100 percent, and the city attracts about 250,000 visitors on a typical weekend.

The Sahara, Riviera, Imperial Palace, Tropicana and New Frontier don't have the 50,000 hotel rooms controlled by the Strip's aforementioned three major operators.

The five stand-alone properties together have 9,401 rooms, about 13 percent of the Strip's total.

Sahara owner Bill Bennett said his hotel has seen its occupancy decline to about 73 percent from a weekend average of nearly 100 percent.

The property has avoided layoffs by reducing many employees' hours by 50 percent, Bennett said. Room and food prices have been cut, and mailings sent to members of the casino's slot club in an effort to generate additional drive in traffic.

That said, the long-time casino operator and former chief executive of Mandalay Resort predecessor Circus Circus believes the current Strip slowdown won't last long.

"We seem to be coming back, and I'm not too worried about it," he said.

Bennett said the Sahara, which opened in 1952 and has 1,720 rooms, isn't hurting more than the big Strip megaresorts. In fact, he believes the corporate management of the top casino operating companies may make them less able to deal with the recent events.

"Over here if we need to make a change I make the decision and it's done," he explained. "Over there, they have to get permission from the board of directors."

The New Frontier's Najam Khan also noted the smaller operator's advantage in a time of crisis.

"We're very flexible, and we can adjust more quickly," said Khan, general manager of the 1,000-room property that opened in 1968.

The New Frontier has laid off about 20 percent of its 900 employees, Khan said. Hotel occupancy dropped to about 55 percent from average occupancy above 90 percent.

Despite the occupancy drop, Khan's hotel hasn't joined the rush by Strip megaresorts to cut room rates to fill rooms.

"I'm holding the line on our prices," Khan said. The property's weekend rates have stayed in the $99 range. "Going into a panic mode doesn't solve the problem."

Riviera Las Vegas President Bob Vannucci said his property has also kept its room rates constant, in the $60 range, noting that the big megaresorts would have to drop rates even more drastically to compete with his prices.

Hotel occupancy has stayed in the 75 percent range over the past two weeks, he said, attributing the figure to the Riviera's reliance on smaller conferences and conventions.

"Some of the other properties concentrate on corporate conferences, but ours are mostly smaller associations whose members pay for their own expenses," Vannucci said. "People are less likely to cancel if they're paying."

The Riviera, which opened in 1955 and has 2,116 rooms, has laid off about 90 of its 1,900 employees. The property was able to save an estimated 30 jobs because many workers volunteered to take unpaid time off, he added.

Vannucci said the Riviera's speedy decision-making process allows the property to move quickly.

"The big resorts have many more meetings and conferences, while we can get it done almost instantaneously," he said.

The Tropicana, which opened in 1957, has seen its hotel occupancy fall and has laid off employees, but property general manager Hector Mon declined to provide exact numbers.

"The vast majority of hourly employees are on four-day work weeks," Mon said in a statement. "In cases where it is not possible to reduce schedules, we've had to resort to layoffs. The fluid situation we are experiencing right now is making it difficult to forecast how quickly business will bounce back."

The 1,875-room property has seen a significant decline in customer traffic, Mon noted.

Imperial Palace executives failed to return phone calls. The 2,700-room property opened in 1977.

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