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The Strip: Room Raise Projected in January

LAS VEGAS -- Christmas dawned with the gaming industry getting its wishes for the New Year, data collected by Bear, Stearns & Co.suggests.

Average weekday and weekend room rates on the Strip during the week of Jan. 9-12, when the Consumer Electronics Show is in Las Vegas, are pulling well ahead of rates in 2002 and pre-Sept. 11, 2001, with one glaring exception.

In the survey for the week ending Jan. 11, average weekday rates across the Strip declined to $151, down 11 percent compared with the same week in 2002.

Compared with the same week in 2001, however, rates were up an average 43 percent.

Average weekend rates across the Strip increased to $222, up 59 percent compared with the same period in 2002 and up 17 percent from 2001.

"The week's results were generally positive and follow a rather successful post-New Year's week on the Strip," Bear, Stearns analyst Jason Ader said.

Brian Gordon, spokesman for Applied Analysis, a Las Vegas-base financial consulting company, said: "The hefty room rates were getting a boost from planned attendance at CES. The further we move from September 11, (2001,) and people get more comfortable with traveling again, the stronger the industry performs,"

Park Place Entertainment Corp. posted an average weekday rate of $186 in the survey, up "a solid" 26 percent compared with 2002, the fourth consecutive weekday gain for the company, Ader said. In addition, weekday Park Place rates increased 73 percent compared with the 2001 period.

Meanwhile, the average Park Place 2003 weekend rate was $214, up an "impressive" 144 compared with the prior year period, he said.Weekend Park Place rates increased 49 percent compared with 2001.

The average MGM Mirage weekday rate was $139, down 20 percent from CES week in 2002, but up 47 percent from 2001. The average weekend rate was $251, up 34 percent from 2002 and 19 percent from 2001.

And the average Mandalay Resort Group weekday rate was $144, up 14 percent from 2002 and up 36 percent from 2001. Weekend rates averaged $229, up 49 percent from 2002 and 17 percent compared with pre-Sept. 11 rates during CES in 2001.

Preliminary data from Bear, Stearns also suggest double-digit room rate gains during the Martin Luther King Jr. Day weekend, Jan. 18-20.

At Applied Analysis, Gordon said Las Vegas resorts will also get a boost in January business from Asian visitors coming ahead of the Feb. 1 Chinese New Year's celebration.

Analysts generally remained cautious about making firm predictions about 2003 beyond the holiday period.

"Looking ahead, after following several weeks of a holiday season-related convention schedule lull, we believe that the Las Vegas convention schedule will play a significant role on the Strip in the first quarter (of 2003)," Ader said.

For the one-week period ending Christmas Eve, the Dow Jones Casino Index closed up 2 percent at 240, compared with the Standard & Poor's 500 that closed down 1 percent at 892.47.

Gambling stocks generally outperformed the broader indices last week, as trading remained relatively light, Ader said, with large-cap gaming stocks fairing best

"We believe investors were relieved that Mexico did not pass gaming legislation that could have created additional competition for Las Vegas," he said.

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