Executives assess LV growth

Gary Thompson

Thursday, March 21, 1996 | 11:59 a.m.

Las Vegas will continue to grow as a tourist destination if transportation systems and other infrastructure improvements keep pace, three top gaming executives agreed today.

But if growth slows, older gaming operations must modernize or lose market share, they warned.

The trio represents three of the biggest players in gaming -- Mirage Resorts Inc., Circus Circus Enterprises Inc. and Boyd Gaming Corp. Mirage and Circus operate four of the five biggest resorts in Las Vegas and are co-owners of a sixth -- Monte Carlo -- opening this summer. Boyd owns the sprawling Sam's Town and Stardust resorts, downtown properties and casinos in Louisiana, Missouri and Mississippi.

"How long does the growth go on?" asked Mirage executive Dan Lee. "Only as long as we can find places to build new and exciting resorts. And we're out of room on the Strip."

Lee said water, traffic, school and other infrastructure problems can also limit expansion of gaming unless solved.

"The county's done a great job in addressing some of the problems," said Lee, senior vice president of finance and development for the company. "McCarran Airport has stayed ahead of the growth curve. The quality of ours schools is impressive, though we've got to do away with double sessions."

But ensuring an adequate water supply and widening Interstate 15 between Las Vegas and Los Angeles -- a key market for local gaming -- are two areas needing work.

"I don't know if you have driven that highway on a weekend recently," Lee said, "but it's bumper-to-bumper traffic between here and Barstow, (Calif.)"

Circus Circus President Glenn Schaeffer said Las Vegas has grown from a regional gaming center to a worldwide tourist destination. "We have become the epicenter of entertainment tourism because we're a product that's unavailable anywhere else -- the entertainment megastore."

One example is the 3,000-room Monte Carlo, a Circus-Mirage joint venture. "We will open it just 15 months after breaking ground," he said. "That's the fastest construction of a project that size in U.S. history. And it's the trades in this city that made it possible."

Between them, Circus and Mirage employ nearly 35,000 people, a number that will rise almost 20 percent this year alone. Mirage is spending $1.2 billion on its Bellagio resort, scheduled to open in 1998, and $1 billion in other gaming areas, Lee said. Circus will spend $1.4 billion in the next couple of years, including construction of new resorts at the south end of the Strip.

Boyd Group President Chuck Ruthe acknowledged Lee's warning that if market growth slows, "he who has the oldest hotel loses."

"Several years ago, we decided we were local operators and adapted that philosophy to emerging markets as gaming spread. We went into Louisiana, Mississippi and Kansas City and are doing well there," Ruthe said.

"But Circus and Mirage changed the rules of how to succeed in Las Vegas. And we are going to be competitive."

Noting that the Stardust sits on 70 acres of prime Strip property, Ruthe said Boyd Gaming is developing a comprehensive expansion program. "We are planning the Stardust of the future."