Gaming execs: Las Vegas business showing signs of improvement

By Richard N. Velotta

Wednesday, May 5, 2010 | 1:08 p.m.

Operators of Las Vegas' Hard Rock Hotel say the free fall on hotel rates has ended in other properties run by the Morgans Hotel Group in other cities and a similar pattern is emerging in Las Vegas.

Frederick Kleisner, CEO and a director for New York-based Morgans, told the state Gaming Control Board today that the company has seen a pattern of event-driven demand, followed by sustained demand and the driving of higher rates in New York, Los Angeles and Miami.

"I think we'd like to see jaw-dropping increases, but we're happy to see gradual increases over the next 120 days," said Kleisner, who was unanimously recommended for approval of suitability and key executive applications in several executive positions with the company. "We still have a bit more wood to chop."

The board's recommendations will go to the Nevada Gaming Commission for final approval May 20.

Every once in awhile, the Control Board has an agenda filled with requests from uncontroversial applicants who have clean regulatory records.

Some regulatory files are so good that the applicant's appearance is waived by the board. But those who do appear get fewer questions about their personal background and licensing and more about current events at the property and how the Nevada economy is faring.

Today's meeting was one of them.

Kleisner, who has filled in for former general manager Randy Kwasniewski since his death in March, said some demand has been driven by the National Association of Broadcasters convention and the International Council of Shopping Centers trade show.

Kleisner said he believes demand is strengthening because excessive supply on the luxury end of the market has been tempered by the cancellation of some projects.

The Hard Rock is in the process of hiring a new general manager for the property and Kleisner said a list of two dozen candidates for the job has been pared to a short list and that the company is now conducting background checks on the remaining applicants.

Kleisner also told the board that senior management at the Hard Rock is focusing more on the oversight of hosted gaming and clubbing activities and that managers have signed documents acknowledging their understanding of the property's policies.

"We share your concern that every operator has to cut the cards regularly," Kleisner said.

Other executives winning licensing approval from the board today received similar questions about the state of the economy.

"It's been up and down," said David Nolan, assistant general manager of the Suncoast, when asked how business was.

"Every time I think I'm seeing an upward trend, it goes back down again," said Nolan, who was unanimously recommended for approval for licensing as a key employee.

Control Board Chairman Dennis Neilander asked Mirage President and Chief Operating Officer Scott Sibella if his property had seen a downturn since his company's sister property, Aria, opened its doors at CityCenter.

"It wasn't as much as we thought it was going to be," Sibella said, adding that The Mirage is expecting an uptick in reservations in the second half of 2010 and even better demand patterns in 2011.

Sibella was recommended for approval of licensure as an officer of the company.

Randy Morton, president and chief operating officer of Bellagio and who was recommended for approval for licensing as a key executive, echoed Sibella's comments, adding that he's optimistic because of the pacing of convention bookings and other business traffic.

"It's the first time in 18 months that we have had what we consider to be a normal mix of casino, leisure, business and FIT (free and independent traveler) bookings," Morton told the board.

In other business today, the board approved an application for a public offering for Icahn Enterprises LP, one of several subsidiaries of Carl Icahn's business empire. A representative for Icahn said he still has no firm plans for the Fontainebleau on the north end of the Strip, which he acquired in a bankruptcy sale.

The board also closed the books on Fontainebleau's previous owners, granting a series of requests to withdraw gaming licensing applications. Fontainebleau Resorts LLC now has a single employee managing the company's interests in Chapter 7 bankruptcy.