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The Honolulu Advertiser
Posted on: Saturday, March 3, 2007

Island residents fill Boyd’s coffers

By Greg Wiles
Advertiser Staff Writer

Boyd Gaming Corp. set its sights on the Hawai'i market when it opened the California Hotel in Las Vegas in 1975. Boyd's downtown properties offer local foods - and even some dealers in aloha shirts.

Boyd Gaming Corp.

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Hawai'i residents continue to play a significant role in filling downtown Las Vegas hotel rooms for Boyd Gaming Corp., which in recent years has grown to become the third-largest U.S. gaming company.

Local residents were responsible for up to two-thirds of the room nights at its three hotels in downtown Las Vegas in 2006, according to the company's latest filing at the U.S. Securities and Exchange Commission. The company, which operates 16 properties, caters to Hawai'i residents with three hotels, the California, Fremont and Main Street Station.

"We directly compete with eight casinos that operate in downtown Las Vegas. However, we have developed a distinct niche for our downtown properties by focusing on customers from Hawai'i," Boyd said in an annual SEC filing.

The gaming company said it's focused on the Hawai'i market since opening the California Hotel in 1975 and has well-established relationships with Hawai'i-based travel agencies.

"These relationships, combined with our Hawaiian promotions, have allowed the California, the Fremont and Main Street Station to capture a significant share of the Hawaiian tourist trade in Las Vegas," Boyd said.

Las Vegas has been a favorite travel destination for Hawai'i residents for decades. A 2005 Scarborough Research survey determined 176,482 residents, or about 35 percent of O'ahu adults, had traveled to Las Vegas in the past 12 months. Scarborough found 83 percent stayed in a hotel and had a median income of $76,100. More of the travelers were women (51 percent) than men.

Boyd's downtown hotels cater to travelers with local foods and, in the California's case, casino dealers dressed in aloha shirts. Its marketing includes direct mailings of promotions and other items to past customers of the three hotels. In 2004, the properties sent out a bimonthly newsletter to about 94,000 households, most of which were in the 50th State.

Part of Boyd's dominance of the Hawai'i trade in Las Vegas can be traced to its Vacations Hawaii travel package seller. Vacations Hawaii runs six weekly charter flights between Honolulu and Las Vegas to guarantee it has a supply of inexpensive seats to offer travelers.

Filings show, however, Boyd's grip over the Hawai'i market loosened a little last year compared with 2005.

At the 781-room California Hotel, local residents accounted for 67 percent of room nights last year. That was down from 70 percent a year earlier.

The number of Hawai'i-resident room nights at the 447-room Fremont Hotel, which is adjacent to the much-photographed light canopy on Fremont Street, slipped to 56 percent from 61 percent a year earlier.

At the 406-room Main Street Station Casino, the Hawai'i occupancy number fell to 55 percent from 59 percent.

The downtown hotels also compete with better-known hotels on the Las Vegas Strip that typically cost a little more to stay at. Boyd's downtown hotels have been getting a little more expensive, though.

At the California, the average daily room rate rose by $1 to $33 between 2005 and 2006.

At the Fremont and Main Street, the rates rose by $2 a night.

The filings also show that Boyd's downtown Las Vegas properties contributed $278.7 million to the company's total revenue of $2.43 billion in 2006. Boyd's operates 13 other hotels in five states and has a 50 percent interest in the Borgata Hotel Casino in Atlantic City.

Reach Greg Wiles at gwiles@honoluluadvertiser.com.