Venetian discloses layoffs, notes rebound

David Strow

Wednesday, Sept. 26, 2001 | 11:08 a.m.

The Las Vegas Strip's Venetian resort has reduced its workers' hours by 27 percent and temporarily suspended construction of a new 1,000-room hotel tower, company officials said Tuesday.

The moves come as the Venetian, like casino properties up and down the Strip, struggles to get through an unprecedented slowdown in business following the terrorist attacks of Sept. 11. But business is starting to come back, Venetian officials said.

"Things certainly don't look as bad today as they did just a few days ago," said Bill Weidner, president of Venetian holding company Las Vegas Sands Inc. "I think we're seeing the rebound, and rather strong rebound, of Las Vegas overall."

The number of workers laid off at the Venetian is less than 100.

"That number will continue to be assessed based on business volumes," said Rob Goldstein, president of the Venetian.

But the number of "full-time equivalents" -- a figure used to measure hours worked by employees -- has been reduced by 27 percent, said Las Vegas Sands Inc. Executive Vice President Brad Stone.

"We're trying to manage our labor costs to our business volume ... while being very sensitive to maintaining (employee) relations and trying to work through these issues with our team members," Stone said.

The Venetian also said it has temporarily suspended construction of a 1,000-room hotel tower on top of its parking garage. The Venetian is spending between $175 million and $200 million on the project, which will include a new parking garage and 150,000 square feet of new convention space.

Though construction will stop, planning and permitting for the project will continue, Weidner said.

"We believe very strongly (in the expansion) as a primary part of the future of the Venetian," Weidner said.

"However, we also recognize that in the current environment, we need to do the prudent thing (and) put this in some kind of temporary abeyance. We will continue some activity, minimal as it may be, because when the opportunity is correct, and the markets and Las Vegas rebound, we want to be prepared to immediately start."

Other major projects suspended in recent days include a 900-room hotel tower at Caesars Palace, a 1.8 million-square-foot convention center at Mandalay Bay, and a $111 million high-rise timeshare at the Strip's north end being built by Hilton Hotels Corp.

In the days following the Sept. 11 attacks, the Venetian's financial performance fell substantially. Occupancy at the 3,036-room hotel fell from 97 percent the weekend of Sept. 8 to 48 percent the weekend of Sept. 15. Table drop the first weekend after the attacks was down 53 percent from the previous weekend, slot handle fell 41 percent, and room rates fell 24 percent to an average of $175.

Those numbers are starting to come back. During the past weekend, occupancy at the hotel was 70 percent. Table drop was down just 13 percent from the Sept. 9 weekend, and slot handle was off 15 percent from that weekend -- still below normal, but up sharply from the Sept. 15 weekend.

"It's fair to say the high end of our business ... has been negatively impacted, especially foreign play," Goldstein said.

During the conference call, Venetian officials also re-ignited their war of words with the Las Vegas Convention and Visitors Authority. Weidner said he had been angered by LVCVA comments that several conventions had been cancelled at the Sands Expo Center, owned by Las Vegas Sands. He called the LVCVA's comments "a Chicken Little spin," made without context.

"I don't believe those communications were terribly well thought out, and bordered on the irresponsible," Weidner said. "That packaged negative information was fed to a press looking to promulgate negative news, and that information fed right into that feeding frenzy."

LVCVA spokesman Rob Powers declined to comment.

The Venetian filed three separate lawsuits against the LVCVA in 1999 and 2000, claiming a $150 million bond issue funding the expansion of the Las Vegas Convention Center was an unfair advantage for a competitor. The Venetian and LVCVA had apparently made peace in February, when they agreed to drop their claims against one another.

Weidner said upcoming major conventions, including Comdex, should help solidify business in the coming months.

"Unless there's some other shoe that drops here, our forward calendar is extraordinarily strong," Weidner said.

Meanwhile, Park Place Entertainment Corp. said it has laid off 8 percent of its 18,000-person Las Vegas workforce since the Sept. 11 terrorist attacks -- nearly 1,500 people.

The Strip's other two major operators, MGM MIRAGE and Mandalay Resort Group, have also been laying off workers in the past several weeks. MGM MIRAGE anticipates its layoffs could reach 2,000 by week's end, while Mandalay has said its layoffs number in the "hundreds."