Fourth of July will likely be strong for LV resorts

By Liz Benston (contact)

Wednesday, July 3, 2002 | 11:12 a.m.

Fears of terrorist threats, lingering economic woes and triple-digit temperatures won't keep tourists away from Las Vegas this July Fourth weekend, the city's hotel-casinos, tourism authority and other experts say.

Many Strip hotels say they have already stopped accepting reservations for July Fourth because they are nearly booked, according to the hotels' reservation departments. And two of the Strip's largest hotel-casino operators -- Park Place Entertainment Corp. and MGM MIRAGE -- say their hotels are either at or near capacity. Though room rates are difficult to target, fluctuating daily according to demand, the two operators say room rates are on par with or higher than they were at this time last year.

The Las Vegas Convention and Visitors Authority expects 260,000 visitors and 90 percent of its rooms to be filled on July Fourth, increases of 4 and 3 percent, respectively, over last year.

Las Vegas largely has the 2002 calendar year to thank for that. This year, July Fourth falls on a Thursday -- a day that's easier on tourists than last year's Wednesday holiday, industry watchers say.

"It's a lot easier to extend a Thursday to a long weekend than a Wednesday to a long weekend," said Marc Falcone, an analyst covering gaming and lodging companies for Deutsche Bank Securities.

Las Vegas is still feeling some lingering pressure on hotel rates, however, Falcone said. He projects rates for leisure travelers this summer will be down about 5 to 10 percent from last year's levels.

The city already is pinched by seasonal declines in convention business as well as a dip in tourists during hot summer months.

Consumers also have made some fundamental changes in their spending habits since the terrorist attacks of Sept. 11, which exacerbated some underlying economic pressures, observers say.

National Airlines, like other carriers, has felt the impact of belt-tightening by corporate travel departments and consumers alike, spokesman Dik Shimizu said.

"(Business travelers) are not buying their last-minute, unrestricted tickets anymore," he said. "Leisure travelers are not buying 60 to 90 days in advance. They may wait 10 days before their vacation."

Still, the airline's largely leisure travel business looks strong this holiday weekend, with passenger volumes at or better than last year, he said.

Three-fourths of seats on National's planes were full Tuesday, with increasing passenger loads projected today and tomorrow. Loads decrease slightly on Friday, likely because travelers have already reached their destination for the long holiday weekend, Shimizu said. Saturday, loads approach 80 percent and pass the 90 percent mark Sunday.

News that the FBI is on heightened alert for possible terrorist activity on July Fourth, and recent reports that a local man had allegedly intercepted a phone call made by terrorists plotting an attack, have apparently had little effect on business, hotels say.

Representatives for both Park Place and MGM MIRAGE said their hotels received "a handful of calls" from concerned tourists. None of the few calls made to MGM MIRAGE's Mirage hotel-casino resulted in cancellations, while a few calls to various Park Place properties were made to cancel trips, representatives said.

"The vast majority of our guests are very excited about visiting our hotels for the July 4 holiday," Park Place spokeswoman Debbie Munch said.

Park Place has more than 14,000 rooms on the Las Vegas Strip, while MGM MIRAGE has about 16,000 rooms on the Strip and nearly 18,000 rooms including the Golden Nugget Hotel & Casino in downtown Las Vegas.

Overall, rates have actually increased slightly compared to a year ago, MGM MIRAGE spokesman Alan Feldman said. The company is projecting to sell out most of those rooms on Thursday and Friday, though the sellout rate last year was quicker.

"We were much closer to being sold out this time last year," he said.

The Las Vegas market will show resilience even as summer doldrums put some pressure on rates, Wall Street analysts say.

"We continue to believe the city's recovery is tracking ahead of expectations and is showing positive signs as hotel operators approach the important Fourth of July holiday," Bear, Stearns & Co. gaming industry analyst Jason Ader wrote in a research survey this week.

An advance room rate survey for the week ending July 27 pinpointed weekday rates on the Strip at $97, in line with last year, Ader said. Weekend rates increased 6.6 percent, to $169.

Strip operator Mandalay Resort Group posted a 13 percent gain in midweek rates and a 25.5 percent gain in weekend rates compared to last year, driven by strong gains at the Four Seasons Hotel and Mandalay Bay properties, the survey found. Park Place showed mixed results, with a 3.8 percent gain during the week and a 2.5 percent decline for the weekend. MGM MIRAGE was similarly mixed, falling 23.8 percent during the week and jumping 5.4 percent on the weekend.