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 The Venetian Resort Hotel Casino:

The Venetian Las Vegas ist ein luxuriöses Resort, das die Schönheit und Eleganz einer italienischen Piazza direkt auf dem Las Vegas Strip widerspiegelt. Mit grosszügigen Suiten, die fast doppelt so gross sind wie typische Hotelzimmer, bietet es seinen Gästen unvergleichlichen Komfort und Stil. Das Resort beeindruckt mit seiner kunstvollen Architektur, in der Fresken, authentische Gondeln und ein lebendiges Casino eine einzigartige Atmosphäre schaffen. Hier erleben Besucher nicht nur aufregende Glücksspielmöglichkeiten, sondern auch erstklassige Restaurants, ein luxuriöses Spa und zahlreiche Einkaufsmöglichkeiten. The Venetian ist der perfekte Ort, um das Beste von Luxus, Unterhaltung und italienischer Lebensart zu geniessen.

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