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Rod Smith

Tourism Numbers for Holiday Steady, Sales Up from 2005

1 June 2006

LAS VEGAS -- With sales increases from amenities far outpacing the increase in visitors over the Memorial Day weekend, Las Vegas seems to be proving its new paradigm true: High-end amenities can insulate the city from travel downturns.

While final data will not be available for about a month, the Las Vegas Convention and Visitors estimated that the holiday weekend's visitor count remained largely unchanged from last year's 291,000 visitors.

That may not be too surprising since the number of hotel rooms decreased to 132,000 from 133,000 a year earlier because of the closing of properties such as the Boardwalk, Bourbon Street and Westward Ho.

However, based on anecdotal evidence, officials and insiders said visitors spent 5 percent to 10 percent more over the Memorial Day weekend than they did a year earlier. Some officials predicted even larger increases by the time final tallies are in.

The lure of a sinking dollar, the draw of locals casinos as alternative vacation destinations and the city's continuing shift toward higher spending visitors helped spur the increased spending.

Gasoline price increases, which had been a cause of concern, seemed to have little or no effect on the number of visitors at most resorts.

Higher fuel costs may even have given some properties a boost.

New Frontier spokeswoman Melanie Mabry said gasoline prices were important factors for older properties such as hers.

The New Frontier dropped its average room rates for drive-in customers last weekend, she said.

"The average rate for the wholesalers, Internet bookings, groups, and even our casino discount customers was slightly higher than for the prior year," she said. "With the reduction in room rates to attract last-minute drive-in people, we evened out overall with the combined room revenues."

Aladdin Vice President for Hotel Operations Bill Feather said the property enjoyed record-setting drive-in traffic from Los Angeles, San Diego and Arizona despite gasoline prices.

Other hotel-casinos, especially the newer locals casinos -- Red Rock Resort, South Coast and Green Valley Ranch Resort -- said they had their fair share of local residents as guests and some may have landed Las Vegans who wanted to save on gasoline or to try out the new resorts.

Local resident Bill Smith said he and his wife spent last weekend trying out Red Rock Resort.

"We're tired of the traffic to California, and it only gets worse. The cost of gas is just a surcharge for trying places we've already been when there's newer stuff (here) without the hassles," he said.

They'd previously checked out South Coast and Green Valley Ranch Resort for the same reasons.

Bargains also abound for international visitors because of the declining dollar.

One couple in a designer boutique section at Macy's in Fashion Show mall said Memorial Day had nothing to do with their visit.

"We came to shop because of the exchange rate. You can buy everything here you can buy in London and maybe for half the price. This is like the world bargain basement for high-class stuff," said the husband, who asked not to be named. "We got orders from friends and are shopping for ourselves and are basically on a weeklong spree."

Players, who asked not to be named, said the casinos in both Wynn Las Vegas and The Venetian were packed all weekend with more Asian high rollers than normal.

One player from Japan said he came to see Wynn Las Vegas, but he was betting more than usual because he budgets in Japanese yen, which has appreciated against the dollar.

MGM Mirage spokesman Alan Feldman said the trends together underscore that Nevada has created a tourism economy that is succeeding.

Occupancy at MGM Mirage properties during the Memorial Day weekend at least matched 2005, thanks partly to a big boost from the properties entertainment.

"Anecdotally, the Madonna concert brought a sold-out crowd of 14,000 to MGM Grand on Saturday night and 13,000 on Sunday night. Bellagio's rooms were sold out the entire weekend and we sold out 100 percent of Bellagio's suites on Saturday night -- a record for the Memorial weekend Saturday," he said.

Harrah's Entertainment spokesman David Strow said his company also enjoyed a strong weekend.

"Leisure business remains strong, but we took action to help our casino business," he said, citing in particular completing the integration of the Total Rewards player program for Caesars Entertainment customers and a private party at Caesars Palace for the company's seven-star customers.

Keith Schwer, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas, added that rising prices for gasoline and other items cause people to rethink their spending.

"If prices rise sharply, including exchange rate effects, a relatively high-income person might conclude that his or her money goes farther in Las Vegas than in Paris, France. Rising fuel prices shift a host of consumer decisions; it does not always follow that tourism in Las Vegas will drop proportionately to fuel price increases as consumers spending shifts," he said. "We could end up being the consumers' second choice, but number one in relative terms because the Las Vegas option improved in terms of satisfaction per dollar."