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Uncertainty Continues for Las Vegas Casinos

LAS VEGAS, Nevada – Oct. 7, 2001 -- Hotel occupancy rates continued their post-Sept. 11 climb throughout the city on Friday and Saturday nights, but Sunday's start of the Afghan bombing campaign has increased the economic uncertainty plaguing Las Vegas.

No one knows what impact TV images of the nighttime air raids will have on the already damaged psyches of domestic and foreign travelers.

Rather than experiencing a rebound, casino industry executives and observers say the region's $32 billion tourism-dependent economy appears to be entering a period of yo-yo'ing results.

The numbers may be strong one weekend and weak the next, as U.S.-led military effort increases, and the Osama bin Laden-inspired terror network retaliates.

"There are a lot of shoes out there, and there's always another one that's about to drop," University of California, Irvine economics Professor Peter Navarro said of the uncertainty.

Las Vegas' economic troubles have multiplied as the casino industry's Sunday through Thursday results remain well-below normal, with free-spending visitors from the East and Midwest, and domestic and foreign high rollers avoidingstaying off the sort of long-haul flights that crashed into the World Trade Center and Pentagon.

In light of Sunday's events, casino industry observers wonder whether tourists will:

-Remain close to home, as was the case in the weeks following the start of the 1991 Gulf War.

-Shun major tourist destinations, fearing terrorists will target high-profile symbols of U.S. culture.

-Travel anyway, figuring the distant shellings are occurring on the opposite side of the globe, offering some sense of homeland security.

The Las Vegas Convention and Visitors Authority expected a citywide hotel occupancy rate of 84 percent this past weekend, for a 10 percentage point jump from the previous weekend's figure.

The results are expected to be available Tuesday, and if they are close to projected would reflect a 20 percentage point increase from the Friday and Saturday following the World Trade Center and Pentagon attacks.

MGM Mirage's Bellagio was 99 percent full with a Saturday night room rate of $299, or nearly twice what the hotel charged guests last weekend.

But its occupancy rate is expected to plummet to about 70 percent today with a very unBellagiolike price tag of $129. Those figures could be even lower if travelers stay home in light of the Afghan bombing runs.

By midday Sunday, the number of phone calls had "dramatically" fallen to MGM Mirage's hotel reservation clerks, who book 18,000 Las Vegas rooms, said company spokesman Alan Feldman.

"What has already become a hard to discern pattern is getting even more complex," Feldman said.

It's also difficult to determine what the hypersensitive economic environment will mean for the region's 814,000-person workforce, which has experienced the loss of nearly 20,000 casino industry jobs in the aftermath of the Sept. 11 terrorist attacks.

MGM Mirage has cut 6,000 positions; Mandalay Resort Group a total of 4,500; and Park Place Entertainment at least 1,500, with standalone operators cutting thousands more.

For every job lost within the local casino industry, one is expected to be lost outside within the next three to six months, according to University of Nevada, Las Vegas economist Keith Schwer, potentially pushing the region's unemployment rate from 5.1 percent in August to more than 9 percent.

A recently introduced proposal by the 50,000-member Culinary Local 226 is designed to prevent further layoffs.

The union has offered to cut the hours of its working members by 20 percent so laid-off workers can be rehired at least part-time. The proposal is working its way through the executive suites of local casino companies, but it's unclear how many will go along with the plan.

"I hope they'll decide it's best to have everybody working some days than just a few people working," said Bill Thompson, a University of Nevada, Las Vegas professor who studies the casino industry. "I think rather than having layoffs the industry should have a flexible workforce right now."

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