Las Vegas Sands Survives Wynn Opening
By Margo McCall -- Tradeshow Week, 8/15/2005
The opening of the upscale Wynn Las Vegas apparently helped, rather than hindered, operations at the neighboring Las Vegas Sands.
William Weidner, LVS president and COO, said the April 28 Wynn opening drove more traffic to the Venetian Resort Hotel Casino, where second-quarter occupancy remained about 99 percent and revenue per available room rose to $228, up from $218 in the year-ago quarter.
"There has been no effect on our ability to increase our room rates," he told analysts. "Ultimately, we see the combination of the Venetian, Palazzo and Wynn creating a very powerful combination at our end of the Strip."
LVS reported $398.8 million in second-quarter revenue and $95.5 million in profit, compared with $266.7 million revenue and $39.5 million in net income in the year-ago quarter.
The Sands Expo & Convention Center was responsible for $13.4 million of that revenue, down from $16.6 million revenue in the second quarter of 2004. Group bookings for the rest of the year, however, are up 11 percent year over year, company officials said. Two-thirds of the space in a planned 450,000 square foot Sands meeting complex will come online later this year, with the remainder opening in the first quarter of next year.
Wynn Resorts, meanwhile, produced $201 million in revenue during its first two months of operation, but recorded a $35.2 million net loss. Room occupancy was 90.1 percent at its new hotel-casino, where the average daily room rate was $284.
Wynn and LVS are also going head to head in the Chinese gambling mecca of Macao. Wynn broke ground on Wynn Macao in June 2004 and is gearing up for a September 2006 opening. The company has revealed few details about its plans.
LVS' Sands Macao casino, which generated $205.1 million in revenue last quarter, has been open since the second quarter of last year. The company has decided to build all 3,000 rooms of its Venetian Macao project, rather than waiting to build half in a second phase.
LVS has also included a 1 million sq. ft. convention center in its plans for the Venetian Macao. But, due to high demand, LVS Chairman Sheldon Adelson said, the company has asked Chinese authorities permission to expand the size of the convention center. "Quite surprisingly, the convention market is quite robust in China. It is continuing to grow quite substantially," he told analysts.
Adelson said LVS has already started receiving show managers' requests for dates. "It's almost an order-taking environment, as opposed to a selling environment. The demand is so strong," he noted. "We believe we'll use up the available space, and we're looking for more space."
In Macao, LVS also plans to develop a Four Seasons hotel with 400 rooms and 600 apartments, as well as two additional 3,000-room hotels and retail space.
Furthermore, LVS has formed a convention and tradeshow marketing team to be headed by Wolfram Diener, former general manager of the Shanghai New Intl. Expo Centre, and Hal Lord, an LVS vice president of sales with 25 years of experience in the Asian convention market.
The company is also one of a dozen vying for the right to build a casino in Singapore. But, cautioned Weidner, "We're not going to get involved in Singapore unless we can make a return on investment that we think is reasonable from our perspective."
