Convention business boosts Venetian profits

07.08.2003, Lesen Sie hier den Bericht über «Convention business boosts Venetian profits».

The owner of the Venetian casino resort in Las Vegas today reported record cash flow in the second quarter and increases in all major business segments as its convention business helped the property outperform competitors more reliant on the unstable tourism market.

The Las Vegas Sands Inc. reported a higher volume of slot and table game play than a year ago and also benefited by winning a greater percentage of those wagers from gamblers. Stable occupancy rates and higher room rates also boosted returns, executives said.

Cash flow at the Las Vegas Sands Inc. jumped 37 percent to $61.5 million in the second quarter compared with the same quarter a year ago. Revenue increased 17 percent to $150.4 million.

The company defines cash flow as earnings before interest, taxes, depreciation, amortization, pre- opening expenses, rent and other corporate expenses.

Construction is under way on the company's Venetian resort in the Chinese coastal city of Macau, which is still set for an opening in the first quarter of 2004, executives said.

The SARS virus scare in Asia hasn't hurt business prospects in Macau, William Weidner, president and chief operating officer of Las Vegas Sands, told investors on a conference call today.

During the first quarter, Macau casinos generated roughly $800 million, or about $9.5 million per casino table and a daily "win" of $26,000, he said.

Revenue was still up at least 12 percent in the second quarter -- and improving toward the end of the period -- while the SARS virus threat was imminent, he said.

An easing of currency regulations and travel restrictions also bodes well for growth, he added. Casino revenue increased 35 percent to $63.4 million. Table game volume rose 9 percent, to $198.5 million. Slot machine volume rose 5 percent to $452.6 million.

The Venetian's occupancy rate was 97.9 percent in the second quarter, relatively flat with the year- ago quarter. Average daily room rates were $206 compared to $196 a year ago. The property's combination of midweek group and convention-goer business helped maintain occupancy rates and room rates, Weidner said. Food and beverage revenue rose 18 percent to $20.8 million, helped by "strong group banquet business," executives said.

The Venetian's Grand Canal Shoppes mall generated rental and related revenue of $9.3 million, a 7 percent increase. Other retail revenue and operating revenue was similar to last year, at around $10 million. The mall expects to add about eight new tenants before the end of the year, including a jewelry store, two coffee outlets and a furniture and accessories store. Casino and hotel returns were higher than expected, Goldman, Sachs & Co. analyst John Kempf said. "We believe this performance was considerably better than other Las Vegas operators because of the group's convention business, which was less affected by the travel disruption of the Iraq war than was leisure travel," Kempf wrote in a research note to investors today.

The company opened a 1,013-suite tower at the Venetian in June. The "Venezia" tower is expected to increase profit margins by adding high-margin rooms and boosting casino revenue "without significantly increasing overhead costs," Weidner said. The tower includes a pool deck, a private lounge and the Venetian's first wedding chapel. Construction is under way on a new restaurant, Bouchon, to be operated by the owners of the upscale Napa Valley restaurant French Laundry.

Über Venetian Hotel & Casino:

Das Venetian Hotel & Casino ist ein Hotel am Las Vegas Strip, das der italienischen Stadt Venedig nachempfunden wurde.

Zu dem 4.049 Suiten umfassenden Hotel gehören ein Casino, der Sands Poker Room, zahlreiche erstklassige preisgekrönte Restaurants, zahlreiche Geschäfte und Boutiquen und das Madame Tussauds-Wachsfigurenkabinett von Las Vegas.

The Venetian is a luxury resort hotel located in the center of the Las Vegas Strip. It is adjacent to the Sands Expo and less than 3 miles from McCarran International Airport. This fantastic, beautiful casino resort is a tribute to Venice itself, with accurate, near-scale replicas of Venetian landmarks and artwork built into the hotel's stunning architecture. With its strikingly beautiful interiors and an indoor canal complete with gondolas, the Venetian inspires awe in those who visit it.

The hotel has many specialty restaurants operated by a who's who of celebrity chefs. For upscale shopping pleasure, the Grande Canal Shops at The Venetian offer more than 50 boutiques along its half-mile long, indoor canal. Gondola rides; complete with a singing gondolier are one of the Venetian's most popular attractions.

Two museums on this resort's premises are another extraordinary feature of the Venetian. Madame Tussaud's Wax Museum makes its U.S. debut at the Venetian, featuring over 100 wax portraits of Vegas' most famous celebrities and sports figures. For a true cultural experience, the Venetian is home to the Guggenheim Las Vegas, housing special art exhibitions in a striking facility.

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