Casinos hopeful New Year will draw Asian visitors

David Strow

Monday, Feb. 11, 2002 | 10:59 a.m.

In China, 2001 was "The Year of the Snake." For Las Vegas casinos, the name seemed appropriate, as a tourism slowdown struck the city like a cobra in September.

High-end business took one of the hardest turns of all. In November, win from baccarat -- the game of choice for high rollers -- plunged more than 80 percent on the Strip, resulting in more than $40 million less for the casinos' coffers that month. It was the slowest month for baccarat in Nevada in eight years.

But Tuesday the Chinese "Year of the Horse" begins. And casino operators are cautiously optimistic that business could come out of the gate strong on the first day of the Chinese Year. The city's biggest high-end players, including MGM MIRAGE, Park Place Entertainment Corp. and the Venetian, are all cautiously predicting solid business for the upcoming holiday.

"So far, it looks a little softer than last year, but it's a whole lot better than it could have been," said Mike French, senior vice president of operations at the Venetian.

"Looking at the business we have on the books right now, we're expecting a good turnout from overseas," said Park Place spokeswoman Debbie Munch. "We're expecting a Chinese New Year's that would compare favorably with any of the Chinese New Year's celebrations we've had in the last three years."

But when you're dealing high-end business, Munch said, making predictions can be difficult.

"These are some of the world's wealthiest people," Munch said. "They can quickly change their travel plans. But from looking at the reservations, we're expecting a very good turnout from overseas clientele."

For Las Vegas casinos catering to high-end customers, Chinese New Year's ranks behind only Western New Year's in significance, said MGM MIRAGE spokesman Alan Feldman. It's a holiday where some of the biggest whales on the Pacific Rim come to Las Vegas to celebrate and gamble -- and Las Vegas casinos, if they're lucky, see their bottom lines bulge.

While the terrorist attacks of Sept. 11 dragged down domestic tourism to Las Vegas, they nearly wiped out international high-end business. MGM MIRAGE officials have estimated that international high-end business fell 75 percent after the attacks, while domestic high-end business fell 50 percent.

"I personally made a couple of trips to China since Sept. 11, and in November I heard a lot of reluctance by Asians to fly," French said. "(They believed) planes were falling out of the air (in the United States), that people were dying left and right."

The anthrax scare that followed soon after exacerbated those fears.

"They were watching CNN, reading stories ... and it seemed as though every day there was a story about anthrax," Feldman said. "They were getting the impression as though anthrax was far more widespread than it was."

Time has helped soothe those jangled nerves. Since Sept. 11, there has been just one attempted terrorist strike against the United States -- the bombing attempt on a transatlantic flight in December -- and that attempt failed. And for months, no new cases of anthrax have been reported.

And so the appetite of high-rollers to return to the Strip appears to be returning. MGM MIRAGE Chairman and Chief Executive Terry Lanni estimated last week that his company -- which accounts for more than half of the city's high-end business -- has recovered about two-thirds of the international high-roller business lost after Sept. 11. Domestic high-end business is now down about 13 percent at MGM MIRAGE.

That, of course, could change quickly.

"We need to be a little more circumspect about turning points," Feldman said. "We need to be a bit more conservative, certainly until the war is over. Until that's come to a more definitive end, we need to be prepared for some additional turns in the road."

Still, a big Chinese New Year's could prove crucial in the long-term recovery of high-end play, French said. That's because the circle of high-end players is a relatively small one.

"There are folks coming that haven't traveled in awhile," French said. "If they come, see everything's OK, and the trip goes well, they'll go back, talk to their friends, and we'll see business start to return. It's a small number of people, and at that level, they all know each other."

At this point, the more important factor for the city is the turnout for Chinese New Year's, not necessarily the profits, said CIBC World Markets gaming analyst William Schmitt.

"It would be a positive if the volumes were there, regardless of whether someone (a high-roller) loses a lot or not," Schmitt said. "In terms of travel from the Far East and Europe, that would be a good indicator people are willing to get on airplanes and travel to Vegas."

Still, business travel, not high-end business, is the more important factor in engineering a broader turnaround for the city, Schmitt said.

"That (business and convention travel) is a much more sustainable business in the long-term, and it's much more predictable," Schmitt said. "The high-end really focuses on two companies (MGM MIRAGE and Park Place), and it's historically been (volatile)."

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