Terror slowdown hurts Venetian

Friday, Oct. 26, 2001 | 9:26 a.m.

The parent company of the Venetian reported a 17 percent drop in cash flow for the quarter ending Sept. 30, as the post-Sept. 11 tourism downturn took its toll on the Las Vegas Strip resort's casino operations.

Still, company officials today said the Venetian is rebounding quickly and demand strengthening.

Las Vegas Sands Inc. reported cash flow of $33.1 million, down from $39.8 million in the year-ago period. Revenues fell 10 percent to $123.2 million, while the net loss increased 28 percent to $6 million.

Las Vegas Sands President Bill Weidner called them "reasonable ... results in a severely disrupted environment."

The primary culprit in the Venetian's weaker earnings appeared to be the casino. Casino revenues dropped 15 percent to $61.4 million, with table game play showing the biggest decline; table game drop, or the amount wagered on the Venetian's table games, was $214.1 million during the quarter, down 27 percent. The Venetian blamed this not only on weaker visitation, but also on the tightening of the casino's table game marketing efforts.

Slot handle fell 6 percent to $475.7 million.

The Venetian's hotel held up surprisingly well during the quarter, with average daily room rates actually increasing $13 to $181 during the quarter. Occupancy averaged 87 percent during the quarter, down from 96 percent in the year-ago period. This lower occupancy led to a 3 percent decline in hotel revenues, to $43.7 million.

Room rates and occupancy have been steadily increasing since Sept. 11, Weidner said.

Food and beverage revenues were down 15 percent to $11.7 million during the quarter. But the Grand Canal Shops reported increased business, as revenues rose 2 percent to $8.5 million, and cash flow rose 20 percent to $4.8 million.

The company said it has been engaged in aggressive cost-cutting since Sept. 11, primarily in the area of casino marketing. The Venetian's operating costs fell 6.5 percent during the quarter to $86.3 million.

In late September, the Venetian said it had reduced worker hours by about 27 percent, though layoffs at that time totaled less than 100.

Falling interest rates also helped the company, as interest expense dropped 13 percent to $26.7 million.