VEGAS INC Magazine - Latest Las Vegas business news, features and commentaries about gaming, tourism, real estate and more
Issue link: https://www.ifoldsflip.com/i/60513
IN BUSINESS GAMING TOURISM IMPROVEMENTS LIFT REVENUE FOR THE STRATOSPHERE By Steve Green senior staff writer The return of tourists to Las Vegas boosted fourth-quarter financial results for the owner of the Stratosphere. American Casino & Entertainment Properties LLC said March 22 it lost $7 million in the quarter ended Dec. 31, an improvement from the loss of $17.4 million in 2010's fourth quarter. Thanks to greater business volumes at the Stratosphere, companywide net revenue increased from $79 million to $81.3 million. The Stratosphere's net revenue increased from $34.6 million to $37.4 million, American Casino said. Average daily hotel room rates at the 2,427-room Stratosphere jumped from $44.12 to $55.11 as Las Vegas attracted 38.9 million people in 2011 — nearing the peak of 39.2 million people in 2007. Despite these improvements, business was sluggish for American Casino at its Aquarius resort in the competitive Laughlin market. Net revenue there was flat at $20.6 million. Also, net revenue at the company's two Arizona Charlie's properties in Las Vegas fell 2.4 percent to $23.3 million. ''The Las Vegas local market is showing signs of economic improvement in the areas of tourism and taxable sales, but continues to be impacted by high unemployment and declining home values. Heavy promotional activity by our competitors continues to dominate the Las Vegas local market,'' American Casino said in the financial report. Even as overall revenue increased, the company continued to lose money, largely because of interest costs running at more than $11 million per quarter, as well as noncash expenses for depreciation and amortization that totaled $9 million in the fourth quarter. Your Safety Our Priority SO FAR, GAS PRICES HAVE NOT AFFECTED LAS VEGAS TOURISM GAS PRICES, FROM PAGE 7 somewhat desensitized to the higher prices because they've seen them before, and changing their behavior may not be specific to a vacation," Bagger said. "They can cut corners other ways — riding bikes, buying less at the grocery store. But when it comes to leisure travel, it hasn't gotten there yet." Local resorts haven't seen a pullback in travel, but marketing experts are preparing for that possibility. Kimiko Peterson, director of advertising, public relations and social media at the Silverton, said her property had an excellent first quarter, with several weekends in March sold out. Despite that success, the Silverton is planning a "Fuel Frenzy" promotion in July, directed at locals, in which customers can win free slot play and gas cards. Peterson added that when gas prices skyrocket, her company's best tactic is to encourage visitation with lower room rates — which it will do in June when summer rates of $35 on weekdays and $55 on weekends will be reintroduced. Bagger said the LVCVA regularly communicates with resorts to gauge advanced bookings and determine whether gas prices are affecting them. So far, he said, there's been no indication that advance bookings have been affected. "One of the things we learned during the recession was that we have to be flexible in our messaging," Bagger said. "We can update our campaigns and messaging quickly to respond to the | 2 APRIL 2012 | circumstances." How would the message change? Bagger said properties would likely plot their own courses and that room price-point control can dictate the message. Gary Thompson, a spokesman for Caesars Entertainment, said his company hadn't seen a downturn in travel that could be attributed to higher gas prices. He said one tactic the company used in the past and could offer to customers again was the ability to trade points from the company's Total Rewards loyalty club for gas purchases. Like many of their resort counterparts, Caesars is seeing higher occupancy rates and average daily room rates, thanks to increased international travel and improvements in convention and business bookings. Thompson said the company hasn't had to be too concerned with the spike in gas prices because international and business components have been so robust. But even air travel costs are a concern that can be attributed to the rise in fuel. Last week, Southwest Airlines, the busiest commercial air carrier at McCarran International Airport, reported it didn't expect to be profitable in the first quarter of 2012 because of increased fuel costs. Thompson said that although there hadn't been any actions by the company for consumers, Caesars properties in Mississippi had begun establishing carpool networks for casino employees. It's Free. It's Easy. It's the Law. One call to 811 gets underground utility lines marked for FREE – whether you're a homeowner or professional excavator. Every digging job requires a call – even small projects – so be sure to: • Call 811 two days before starting any digging project • Wait for the site to be marked • Respect the marks • Dig with care Not calling can be life-threatening and costly. You can harm yourself or others, disrupt service to an entire neighborhood, and potentially be responsible for injuries, repair costs, and criminal penalties. www.swgasliving.com/safety 11