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Rod Smith

Stardust Not Accepting Reservations

22 June 2006

LAS VEGAS -- The Stardust no longer is accepting hotel reservations past Nov. 1, and some industry observers expect that to move up to Oct. 1.

Industry observers say the Riviera, Circus Circus and Palace Station can expect to see a bump in hotel reservations as regular guests at the Stardust look for similarly priced accommodations on the Strip.

The Stardust, which will be torn down early next year to make way for Boyd Gaming's $4 billion Echelon Place, has stopped taking room and event reservations for Nov. 1 and beyond.

Previously, the company said it would accept reservations into December.

However, the Strip resort's catering staff last week began calling organizations that had scheduled events or were in discussions about holding them at the Stardust after Nov. 1 and told them that the hotel would close on that date.

Boyd Gaming spokesman Rob Stillwell confirmed that no reservations are being accepted for the property after Nov. 1, although the company still intends to keep the resort open past November if it can be staffed properly.

"We're hoping to continue operation (unless) employee ranks become a problem," he said.

Stillwell said the company is concerned that it will not be able to maintain customer service standards after Nov. 1 because of employee migration to other properties, retirements and other factors.

Stillwell said the Stardust even could move the date for not accepting reservations forward to Oct. 1 if too many employees leave the property quickly.

"We're just being extremely cautious about the last two months of the year," Stardust general manager Tony Taeubel said.

The company is in the process of relocating workers to other local Boyd Gaming properties, but it is unclear how quickly the transfers will take place, Stillwell and Taeubel said.

Stillwell said several events planned after Nov. 1, which he did not identify, had been canceled, but no room reservations have been canceled yet.

"It's easier to turn the tap back on (if we decide to stay open longer) than it is to turn it off," he said.

Stillwell also said the company has been particularly sensitive to event planners because meetings and conventions require more elaborate planning beyond hotel reservations.

Stillwell also said Boyd Gaming has 11 other resorts in the Las Vegas area to which it can refer customers.

Industry insiders long have speculated that the Stardust would be closed by Halloween, and now they are speculating that it will be shut down by Oct. 1.

"It's no easy trick to keep booking rooms when the market knows you're going to close any day now, date uncertain," said one competitor who asked not to be named.

He and other Stardust neighbors are marketing themselves actively to Boyd Gaming customers in light of the development of the 5,300-room Echelon Place, although they are hesitant to discuss their promotional efforts publicly.

"I wouldn't call it poaching. They're going to be closed for a good four years, and I'd rather pick up their customers than have one of our competitors get them," another competitor who asked not to be named said.

Jim Medick, chief executive officer of the MRC Group, Nevada's largest market research firm, said Circus Circus and the Riviera, each just to the south of the Stardust, are both actively trying to pick up customers who ordinarily would stay at the Boyd Gaming property.

Medick said neighboring hotel-casinos will pick up added customers when the 2,431-room Stardust closes and probably before.

"People who go to the Stardust go out of habit. They'll feel themselves frustrated wherever else they stay, but they wouldn't stay at Wynn or The Venetian. They're not that kind of spenders," he said.

The Riviera and Circus, as well as the Sahara and Stratosphere clustered at the north end of the Strip, are all offering room rates of less than $100 a night in November.

Rooms booked on the Internet at Wynn Las Vegas and The Venetian, by comparison, average more than $350 a night, and no rooms are available in November at less than $250.

"Regular Stardust customers will check in at the Riviera or Circus Circus, but a lot of them will be disgruntled as those properties raise their rates (to meet the newly created demand)," Medick said.

Riviera spokesman John Neeland said his company had no comment about whether it is getting a bump in reservations from Stardust customers or whether it is marketing actively to attract them.

Alan Feldman, spokesman for MGM Mirage, which owns Circus Circus, said it is logical that some Stardust customers will migrate to Circus Circus because the two properties are similarly priced.

However, he said that Circus Circus is not targeting Stardust customers and that the closure will have the unfortunate effect of cutting walk-in traffic in the area.

Station Casinos spokeswoman Lori Nelson said her company has not yet seen a direct effect on reservations and is not doing anything to target specific Stardust customers.

She also said it is probable that Palace Station will see an increase in reservations over time because it is close to the Stardust and offers similar room rates.

Jackie Brett, spokeswoman for the Imperial Palace which also offers rooms for less than $100, said her company hasn't gone after Stardust business aggressively, largely because her property's convention space is smaller and could not accommodate much of the Stardust business.

And while it is taking bookings through July 4, 2007, for now, its fate also is in doubt as owner Harrah's Entertainment plans the redevelopment of the block on the east side of the Strip north of the Flamingo.

Spokesmen for the Sahara and the Stratosphere did not respond to questions about their properties' responses to the pending closure of the Stardust.

Still, Medick said the Stardust must be closed to make way for Echelon Place and should be closed quickly.

"Every day they drag it out, it gets worse in terms of workers looking for other jobs, service and customers being lured to nearby properties," he said.

Marketing programs in the works to lure Stardust customers are said to include price discounts, bonus player program points, entertainment tickets and personal appeals involving customer service.