Chinese New Year signals recovery

David Strow

Thursday, Feb. 21, 2002 | 11:01 a.m.

As Chinese New Year comes to an end, it appears the annual festival has lived up to the hopeful expectations of Las Vegas casino operators.

But the benefit of having Asian high-rollers flock to the city could go beyond a single two-week festival. Some see it as an indicator of a long-term recovery for Las Vegas from its post-Sept. 11 tourism doldrums, as international travelers grow comfortable once again with visiting Las Vegas and the United States.

"If it was a strong weekend, then it's an indication the international traveler is at least willing to begin coming back to the United States," Dennis Forst, gaming analyst with McDonald Investments, said. "That's been the primary problem for high-end (Las Vegas) operators."

Chinese New Year fell on Feb. 12 this year, and the festival continues through next week. But the peak of activity came last weekend, and a favorable convergence of events helped push activity up even further.

"A combination of three events -- Valentine's Day, the three-day (President's Day) weekend and Chinese New Year -- worked together," John Marz, senior vice president of marketing at Mandalay Resort Group, said. "We were either sold out or very close to sold out at each one of our properties."

MGM MIRAGE, Park Place Entertainment Corp. and the Venetian also reported sell-outs or near sell-outs.

"This weekend looked the closest to a normal weekend we've seen in quite some time," MGM MIRAGE spokesman Alan Feldman said.

The Las Vegas Convention and Visitors Authority had been projecting Las Vegas would host 278,000 visitors last weekend, with 95.6 percent of the city's hotel rooms occupied. The actual numbers for the weekend, however, won't be released until early April.

After months of below-normal business, there are expectations that the President's Day/Chinese New Year weekend is more than just a one-time blip.

International visitation was hardest hit after the attacks of Sept. 11, as terrorism and bio-terrorism fears caused many foreign visitors to shy from the United States.

"There was a lot of concern throughout the world, certainly throughout Asia, about traveling," Mike French, senior vice president of operations at the Venetian, said.

But those concerns are starting to fade -- and this past weekend will play a big part in that change of attitudes, French said.

"Once people have been here, had a good time, and seen that there's no problem, they'll be happy to come back again," French said.

Andrew Zarnett, gaming analyst with Deutsche Banc Alex. Brown, believes Las Vegas' visitor counts could surge in the next few months as visitors' comfort level returns.

"What we're beginning to see is the realization of pent-up demand," Zarnett said. "Those who postponed their trips because of Sept. 11 are itching to get to Vegas, and we're beginning to see that wave emerge. We see that revenue lost in September and October being filled over the next six months, which means Las Vegas should experience quite robust times over the next two quarters."

There are other signs of a return to normalcy. Marz noted more and more guests are willing these days to book rooms weeks, not days, in advance.

"There was a time there when our booking window was within seven days," Marz said. "It's further out now. From a booking standpoint, that's good news, because we're not sitting on the edge of our seat looking seven days out."

Still, there are many voices cautioning the recovery still has some way to go. Even this weekend, Marz said, rates remained 5 percent below pre-Sept. 11 levels at Mandalay's properties.

"It's just going to take awhile for the rates to get back to where they were," Marz said. "We are starting to recover, but it's going to be a slow recovery."

Feldman was also reluctant to make predictions that Las Vegas had turned a corner with this weekend.

"We're in a fairly fluid situation right now, and I'm not sure I'd draw any conclusions yet about where things are moving," Feldman said.

And even returning to pre-Sept. 11 levels won't mean the kind of rapid growth Las Vegas has seen in recent years. Even before the terrorist attacks, Zarnett said, Las Vegas was already experiencing a slowdown from the business boom that started in the late 1990s.

That boom was triggered by a building spree on the Strip that saw five megacasinos open in a span of just 22 months. Long-term, that is the kind of trigger Las Vegas needs, Zarnett said.

"Las Vegas needs to continually reinvent itself," Zarnett said.