Las Vegas high rollers may not return soon

Bloomberg News Service

LAS VEGAS — Las Vegas casinos may have to wait as long as a year before average hotel room rates return to the levels seen before the Sept. 11 terrorist attacks, casino companies and analysts said.

To get hotel occupancies back above 90 percent, compared to 67 percent in the weekend after the attacks, casino operators have had to cut room rates as much as half.

At MGM Mirage Inc.'s MGM Grand casino on the Las Vegas Strip, rooms during the week are available for $70, about 40 percent less than the average daily rate of $115 a year ago.

"To get back to where we've been is going to take three or four quarters," said Alan Feldman, an MGM Mirage spokesman.

The discounts, though helping to fill rooms, are attracting budget-minded customers who are less likely to spend as much in the No. 1 casino market's malls, restaurants and shows.

"From a financial perspective, focusing on occupancy misses the point because that doesn't mean things are returning to normal," said UBS Warburg analyst Robin Farley. "You've got a value driven customer in there that plays at a $5 table instead of a $25 table."

After the Gulf War and recession of the early 1990s, it took two years for Las Vegas' gambling revenue to rise for three consecutive months, Farley said. Compounding the problem now is that business travel was falling prior to the attacks because of a slowing U.S. economy.

MGM Mirage casinos, including the Bellagio and Treasure Island, were 90 percent or more full over the past weekend, said Feldman. Midweek occupancies, which are more dependent on business travel, have been about 75 percent.