MGM MIRAGE adds energy surcharge at some LV-area hotels

Friday, June 1, 2001 | 10:42 a.m.

Following in the steps of its Strip neighbors, MGM MIRAGE announced Thursday it would implement energy-related surcharges on hotel rooms at some of its Las Vegas properties.

Nightly surcharges of $3 will be implemented June 1 for room reservations made at the MGM Grand, Mirage, New York-New York and Treasure Island, the company said. Those charges are in line with surcharges already in place at Harrah's Las Vegas, the Rio, the Riviera and properties owned by Station Casinos Inc. A $2.25 per night surcharge will take effect at the Golden Nugget in downtown Las Vegas.

"We have put in place one of the most aggressive energy conservation programs in the history of this industry," said MGM MIRAGE Chairman and Chief Executive Terry Lanni. "However, even after achieving savings of millions of kilowatt hours of electricity, we are falling well short of keeping up with the recent energy price increases."

The Bellagio, the company's newest property, was excluded because it has new energy-saving technologies and didn't require a surcharge, said MGM MIRAGE spokesman Alan Feldman.

The Primm properties and the Strip's Boardwalk were also excluded; Feldman said the company believed guests at the hotels would be far less tolerant of such an increase because of the low room rates at the properties.

In a recent report, Bear Stearns gaming analyst Jason Ader estimated soaring electricity and natural gas prices would cost MGM MIRAGE $34 million to $36 million in cash flow in 2001.

It's unclear how much extra revenue the surcharges will generate for MGM MIRAGE, since room rates in Las Vegas fluctuate dramatically based on demand.