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Rod Smith

A Busy Day at Bellagio

16 April 2004

LAS VEGAS -- Not only is MGM Mirage's flagship property, the Bellagio, open for business again, but it enjoyed a busier than usual Thursday, a company spokesman, retailers and guests agreed.

"A lot of the questions for the past few days have related to how to build the business back and restore trust in the property. But over here, it's even busier than a normal Thursday," MGM Mirage spokesman Alan Feldman said.

Scores of tourists were lined up Thursday afternoon to check in to 1,000 rooms as guests continued returning to the Strip resort after an early Easter morning power failure completely shut down the resort for about 3 1/2 days.

Early Wednesday evening, the first guests, some 1,000 to 1,200 visitors, began checking into 800 rooms after the 3,000-room megaresort reopened, and the $1.6 million property is expected to be at full booked by the end of today.

The hotel's casino also opened Wednesday evening, and all of its shops and most restaurants reopened Thursday while the remaining amenities are set to reopen today.

Bellagio's problems started when an "unknown event" disrupted the hotel-casino's primary power about 2 a.m. Sunday.

The disruption, which burned thousands of feet of power lines at the megaresort, forced Bellagio officials to begin closing the property Sunday. The hotel had to move guests to other properties and send most of its 8,000 employees home because its backup power system also had to be shut down while thousands of feet of damaged power lines were replaced and the repairs were inspected.

Feldman said there were two reasons for the spike in foot traffic Thursday.

"For visitors who have been in Las Vegas for a day or two and wanted to come to the Bellagio and couldn't, this may be their one chance to see it before they leave," he said.

"And a lot of the news coverage about the reopening at 5 p.m. (Wednesday) created an effect like an opening day," Feldman said.

Retail operators in the resort generally said foot traffic was as much as double normal, although they declined to discuss sales volume.

Matthew Hileman, marketing director for the independently owned Bellagio Gallery of Fine Art, said his gallery and art-related gift store have benefited from Wednesday evening's release of pent-up visitor demand.

"People were so eager to get back into Bellagio that we've had people lined up in mobs," Hileman said Thursday afternoon as customers jostled for space both inside and outside his business.

"We've done about double the business of a normal weekday, and if that continues, I think we'll have made up for the four lost days in about a week and a half."

The interest around the shopping area was also evident in the long lines in the ice cream shop, the packed pool and the line of people waiting to go into the gallery.

Hileman said his company's approximately 30 employees were paid despite not working in recent days, an unplanned break he likened to schoolchildren who receive "a snow day" off due to bad weather.

Any payroll-related expenditures will likely be made up through insurance and increased sales in the coming days, he added.

One manager, who asked not to be named, from a store in the high-end Via Bellagio retail corridor said foot traffic in front of her store and through the store were distinctly above normal.

Representatives from other stores in the Via Bellagio retail area declined comment Wednesday, although foot traffic in that area was clearly brisk Thursday afternoon.

Still, some guests at the property said they were disappointed to have been turned away earlier this week, by the hordes checking in all at once Wednesday and by the continued closure of some amenities.

University of Nevada, Las Vegas professor and casino industry expert Bill Thompson cautioned that high rollers are still going to need to be massaged, too.

"The comps are going to have to be really special for the next six months," he said.

More than anything, the power failure has turned out to be a case of bad public relations, Thompson said.

"Recovery is going to be a public relations recovery. We didn't have any injuries or a physical mess in the street," he said.

Still, Thompson said, at least in the short run, any press is good press.

"Bugsy Siegel's murder (in 1947) put us on the map. Before that, not many people knew we had gambling, compared with after the stories broke," he said.

Thompson said making up for the public relations black eye is important to the whole community, because the Bellagio is a critical part of the local economy and any lasting impact will have a trickle down effect.

"I think it was a very unfortunate incident. But given the strength in the destination travel business to Las Vegas and good treatment for customers except for the one-time cost of being out of service, there's shouldn't be any (long-term) impact," Deutsche Bank analyst Andrew Zarnett said.

Deutsche Bank analyst Marc Falcone has said the property stands to lose at least $3 million a day in revenue and about $1 million a day in cash flow, a key measure of profitability.

Gaming writer Chris Jones contributed to this report.