Gaming stocks decline but visitation holds up

By Liz Benston (contact)

Monday, March 24, 2003 | 11:07 a.m.

Gaming stocks fell today though it appeared to be businesses as usual for Las Vegas casinos during the first weekend of war with Iraq, which brought the heaviest U.S. casualties to date and grim television footage of American prisoners of war.

Tourists still mobbed the city over the weekend, which is one of the biggest for Las Vegas as it marked the first to usher in the National Collegiate Athletic Association's basketball tournament. Despite the war in Iraq, properties said Friday they expected to fill their rooms to near capacity as fans nationwide travel to Las Vegas over the next couple of weekends to bet legally on NCAA games during "March Madness."

Properties at MGM MIRAGE -- which owns the most Strip resorts -- were filled at or near capacity over the weekend, company spokeswoman Yvette Monet said today.

"Going into this week our call volume is slightly down, but the number of reservations remains steady," Monet said. Friday, MGM MIRAGE reported that a small number of customers had rescheduled their vacations but didn't cancel them -- a development that hasn't significantly affected business, spokesman Alan Feldman said.

At Boyd Gaming Corp., which operates the Stardust on the Strip, three casinos downtown and two on Boulder Highway, business was strong as properties filled with people in town to watch and bet on NCAA games.

"It was a very busy weekend for us with March Madness," Boyd spokesman Rob Stillwell said.

Harrah's Entertainment Inc., which owns Harrah's Las Vegas and the Rio, doesn't draw large numbers of sports bettors for such events.

Still, both properties were fully booked for the weekend, which was no different from previous weekends -- the war and the NCAA tournament notwithstanding, spokesman Gary Thompson said.

"Business was excellent," Thompson said. "The war has not had any impact at all."

The Palms resort, which is located just off the Strip on Flamingo road, also was sold out over the weekend.

"Business was great -- we were packed" in the casino and in the resort's various nightspots, hotel manager Michael Volk said.

At Park Place Entertainment, occupancy levels were "strong" and reflect normal weekend levels for the season, spokesman Robert Stewart said.

"The war really doesnt seem to be having a significant effect on our occupancy," he said.

After a slight spike in cancellations last week, reservations and occupancy rates appear back to normal, he said.

Mandalay Resort Group representatives could not be reached.

The Las Vegas Convention and Visitors Authority doesn't track occupancy rates around NCAA weekends.

Still, 5,000 attendees were expected for the Exhibitor Show 2003 convention at the Mandalay Bay Convention Center that began Sunday and extends through Thursday.

Only a few said their companies were prohibiting travel and cancelled reservations to the show, an annual event that showcases services offered by trade show and event marketing professionals.

"We are determined in these troubled times to continue business as usual," said Lee Knight, the Exhibitor Show's founder, said Sunday.

Though companies may so far be immune to significant declines in business, their stocks suffered today as investors' hopes of a swift war in the Middle East faded.

The broader market fell more than three percent before noon trading today -- ending a rally that began last week as the country moved closer to the brink of war. News of the U.S. military's heaviest casualties so far, television footage of American prisoners of war and reports of stiff resistance from Iraqi fighters continued to depress stocks this morning.

Gaming stocks also declined today, with Las Vegas casino companies falling hardest. Park Place Entertainment fell 6.8 percent to $7.03, MGM MIRAGE fell 6.4 percent, to $29.19, Mandalay Resort Group fell 4.2 percent to $27.74 and Boyd Gaming fell 6.1 percent to $13.12. MGM MIRAGE hasn't created any expectations for how events will unfold, Feldman said.

"There was no way to predict this," he said. On the other hand, he said, "it's not the Gulf War and it's not 9-1-1, thank God. We are prepared for any number of possibilities."

Customers are "carving out more time in their day to watch CNN or Fox or read the newspaper, but as a general rule people seem to be carrying on," he added.