Regent may benefit from competition

David Strow

Wednesday, Sept. 13, 2000 | 11:33 a.m.

From the north side of the new Suncoast hotel-casino, it isn't hard to miss.

There to the north, just a Tiger Woods drive across Angel Park Golf Course, lies Regent Las Vegas, the first gaming property to open in the Summerlin area.

Since its opening in July 1999, the golf resort and upscale casino has struggled financially, unable to draw sufficient numbers from either the Las Vegas locals market or the tourist market. And until now, the Regent has operated with a near-monopoly on the Summerlin locals market, its nearest competitors at least five miles west.

What the Suncoast means for the future of the Regent is hotly debated on Wall Street. Yet top executives at both properties are taking a decidedly cooperative attitude, saying both will benefit from the increased business the Suncoast will bring to the area.

Both properties refer to their distinctly different offerings -- where the Suncoast offers bowling and movie theaters, the Regent offers a spa and upscale pubs and restaurants.

"We have a lot of amenities that they don't, and vice versa," said David Ross, general manager of the Suncoast. "We're able to take larger groups if we combine rooms, and have that kind of relationship.

"It's better for us to have a little synergy than it would be to have a lot of negative competition. That gets ugly. I don't think it does anyone any good, including the customers."

Darrell Luery, vice chairman of the Regent board of directors, refers to it as the "cluster effect."

"By having more than one property out here, we provide more options and more opportunities for customers to do things," Luery said. "We're hoping that, by being combined, we'll draw more people to this area.

"We hope the sum of each of us is more than two."

Luery and Ross have held meetings to discuss potential cooperation. A strong possibility, the two say, is that the properties will jointly operate a shuttle bus between the two hotel-casinos. Other possibilities could include joint community shows, such as the joint fireworks shows operated in the past by neighboring North Las Vegas casinos Texas Station and Fiesta.

"There's lots of opportunities, and we're thinking in that vein," Luery said.

Not everyone is buying it, however.

"I don't think the Regent competes with Suncoast, but because it's been the only game in town, many Summerlin residents have gone there that would have preferred something different," said Andrew Zarnett, gaming analyst with Deutsche Banc Alex. Brown. "Now they have something different. Clearly, the price points are a lot more attractive (at Suncoast) than they are at the Regent.

"(Luery) is hoping, but at the end of the day, Suncoast has entertainment that far surpasses anything the Regent has. I think it's going to hurt Regent."

Though he projects the brunt will be borne by the Regent, Zarnett feels competition will be felt beyond the Summerlin area. He predicts nearby northwest Las Vegas properties, such as Texas Station and the Fiesta, could initially see 5 percent of their business siphoned off by the new Suncoast.

But Jason Ader, gaming analyst with Bear Stearns, argues that the Regent hasn't much to fear from Suncoast, though he believes the property's future remains "very challenged."

"The product they (the Regent) created out there is going head-to-head against resorts in Scottsdale and Phoenix," Ader said. "They're definitely in different niches. They're not going to be cannibalistic."

One benefit of opening a second property in the area will be giving consumers more options -- and more reasons to come to the area other than the Regent alone, said Anthony Curtis, publisher of the Las Vegas Advisor newsletter.

"It will definitely kickstart (the Summerlin gaming market) ... it will send more people there," Curtis said. "When people aren't doing well in one casino, they'll move over to the other.

"Everyone's saying it will be the death knell (for the Regent), but I don't think so. I think it will be more valuable than hurtful to the Regent next door."

But Curtis added that the window of opportunity for the Regent will be limited. To take advantage of customers attracted initially by the Suncoast, Curtis said, the product has to come close to the competitive pricing espoused by Coast Resorts' properties.

"If Regent is going to take advantage of (Suncoast), it has to have a competitive (in price) product," Curtis said. "Their product will have to match up, and that's going to be tough."

Though Harlan Braaten, president of Coast Resorts, acknowledges his company's newest property could swipe market share from other area casinos, he insists this effect should be short-lived.

"In my experience in the local market ... you'll have some impact in the first month or two on (neighboring casinos)," Braaten said. "But the population is growing so rapidly that it seems (new competition) is absorbed very quickly by the new people moving into those areas."

The property should also grow the market, Braaten said, because many Summerlin-area residents go to casinos infrequently because of distance. With a casino so close by, Braaten said, casino visits should increase substantially among a large portion of the area's residents.

The two will be alone for the near future, though several possible projects in the pipeline would offer new options to the south and southeast of the Suncoast.

First to move may be Swiss Casinos of America, majority owner of the Regent. Swiss Casinos acquired a 55-acre gaming-entitled land parcel at Town Center Drive and the Las Vegas Beltway from Howard Hughes Corp. in June, and has said it wants to begin construction of a locals-oriented casino there by 2002. Under this schedule, project completion would come in 2004. Swiss also holds the right of first refusal to purchase the four remaining gaming-entitled parcels in Summerlin itself.

Station owns a 51-acre gaming-entitled land parcel five miles east of the Swiss Casinos site, located at Durango Road and the Beltway. But Station has remained silent on its long-term development plans of the property.

A third possibility is a joint venture hotel-casino in Spring Valley, proposed by Triple Five Nevada Corp. and Boyd Gaming Corp. The Clark County Commission approved their development of a 22-acre site at Flamingo Road and Canyon Center Drive, but the Nevada Gaming Policy Committee overturned this decision. The future of this development now rests in the courts, after Triple Five and Boyd sued to overturn the committee's decision.