Venetian finances mixed — table win off, hotel healthy

Friday, March 23, 2001 | 11:16 a.m.

Venetian officials are warning that poor hold will take a significant bite out of the $1.5 billion resort's earnings for the first quarter of 2001, despite record strength in the Las Vegas Strip property's hotel business.

In a presentation to investors Thursday, Venetian Executive Vice President Bradley Stone said the Venetian is expected to post cash flow of $39 million to $42 million for the quarter. In the March 2000 quarter, the Venetian reported cash flow of $55.2 million.

That's the result of a big drop in table game hold. While table game drop rose 7 percent to $272.6 million through March 17 -- and daily slot win rose 9 percent to $135 per unit -- table hold percentage was just 14.4 percent, down from 20.5 percent in the comparable year-ago period. That will knock $13 million to $15 million from the Venetian's cash flow during the quarter, Stone said.

"Despite this unusually low table games win percentage, the Venetian's rooms and other business segments continued to perform extremely well ... this demonstrates the strength of the overall Venetian business plan," Stone said.

The 3,036-room Venetian has recorded an average occupancy rate of 99.4 percent through March 17, up from 93.4 percent in the year-ago period, Stone said. The resort posted an average daily room rate of $214 for the period, up from $183.

One of the biggest jumps came in revenues from convention and group business. Average daily room rates for this category shot up 20 percent to $221, and Stone said a significant amount of group room business is being turned away because of a lack of capacity.

Such demand, Stone said, calls for a significant expansion of the hotel. That's the direction the Venetian is heading in, with plans to add a 1,000-room tower this year.

New details on that expansion were not disclosed, though Stone said he believes the biggest impact from the new room tower will be in non-gaming revenues. Venetian owner Sheldon Adelson has said previously that construction on the $200 million tower will proceed this summer and be complete by mid-2002.

Separately, the Venetian has started construction work on an outdoor gondola ride, similar to the ride offered in the resort's Grand Canal Shoppes.

The 570,000-gallon lagoon in front of the Venetian has been drained to allow for the construction of a boarding dock. The Venetian is applying for a permit from Clark County to operate the ride, and hopes to have it operating by May.