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MGM MIRAGE OFFER: Bid made for Mandalay
June 05, 2004 - Room rates at Strip hotel-casinos
maintained their steady climb in the second quarter of 2004,
accelerating as Las Vegas heads into the hot summer months.
Gaming analysts say shrewd marketing campaigns combined with a
strong economic recovery are boosting business in Las Vegas
more than any other business or leisure visitor destination.
"A lot of the demand may be attributable to the creative
marketing campaigns that began 12 to 18 months ago and are
just gaining momentum. That's part of it," said Brian Gordon,
spokesman for Applied Analysis, a Las Vegas-based financial
consulting firm.
In addition, demand has been fed by the accelerating economic
recovery, with all key national indicators on the upswing,
including job creation and consumer confidence, he said.
"Media coverage of the Las Vegas Convention and Visitors
Authority's advertising campaign, prime time television series
and development activity are all driving interest in Las Vegas
(in particular). People are coming here in droves and it's
reflected in the room rates," Gordon said.
Data from Fulcrum Global Partners, an independent Wall Street
investment research firm, showed the average rate for a room
on the Strip in the second quarter booked three weeks in
advance increased $208, up 44 percent compared with the year
before.
Weekend rates increased to $286, up 54 percent and midweek
rates increased to $176, up 31 percent, the data showed.
In the first quarter, the average rate increased 25 percent.
Weekend rates were up 29 percent and midweek rates were up 17
percent.
For the year-to-date, the average room rate has increased 33
percent, with weekend rates up 40 percent and midweek rates up
23 percent.
Deutsche Bank analyst Marc Falcone said the record demand for
rooms in Las Vegas is driven by surging convention business,
which will continue to drive midweek business, and the "hip"
factor, which will keep driving weekend business.
Despite the record growth, which analysts agreed was outpacing
growth in the hospitality industry anywhere else, the last
week of June is shaping up to be weak, with the average room
rate booked in advance falling to $162, down 7 percent from a
year earlier.
Of the major operators, however, only Caesars Entertainment
was down heading into the summer period, which is
traditionally slower overall.
For the quarter as a whole, however, and for the first half of
the year, rates at all major operators are up strongly, led by
MGM Mirage, where the average room rate has climbed to $227,
up 62 percent over a year earlier.
Joe Greff, gaming analyst at Fulcrum Global Partners, an
independent Wall Street investment research firm, said the
major reason for a soft week at the end of June is the absence
of the International Trucking Show on the calendar this year
and very tough comparisons from the year ago period, when
pent-up demand was driving demand in the wake of major
hostilities in Iraq.
The show, which attracts more than 30,000 attendees, is being
held in Anaheim, Calif., this year.
"Despite the cool-off in rates in the last two weeks, the
forward calendar continues to look strong," he said.
« Go Back
MGM Mirage leader Terri Lanni speaks Jan. 30, 2003, at Preview
Las Vegas at the Cox Pavilion. Photo by Clint Karlsen. The MGM
lion peers Friday at the Mandalay Resort Group's Mandalay Bay,
Luxor and Excalibur, right, known as the Mandalay Mile. MGM
Mirage has made an offer to purchase rival Mandalay Resort
Group. The Tropicana, center, would not be part of the merger.
Photo by K.M. Cannon.
Article Copyright ©: R. Smith, Las Vegas
Review-Journal |
