Sands says Vegas "recession resistant"
LOS ANGELES (Reuters) - The Las Vegas gambling industry, while not immune to recession, is "recession resistant," the chief operating officer of casino operator Las Vegas Sands Corp (LVS.N) said on Wednesday.
Signs of weakness have reignited a long-running debate about whether the gambling haven could suffer a significant decline if the economy sinks.
"One of the last things people want to do is stop enjoying themselves," William Weidner said at the Reuters Travel and Leisure Summit in Los Angeles.
He said the Las Vegas Strip, where Sands recently opened the Palazzo resort adjacent to its high-end Venetian hotel-casino, still offers "a real bargain" compared with some other travel options.
Domestic vacation destinations in general are more appealing to Americans, given unfavorable foreign exchange rates, and gambling has always been "attractive," Weidner said.
He also emphasized that the convention business in Las Vegas allows Sands to "ratchet up or ratchet down" its bookings to match the market.
The company felt has felt a tinge of weakness recently, despite suffering almost no impact from the slower U.S. economy through last year. In the first quarter of this year "we feel a bit of it," Weidner said.
The Sands executive also said he expects Las Vegas will be able to cope with capacity constraints at its airport and roads that some industry experts warn could cap the city's ability to keep bringing in enough visitors to fill new hotel rooms.
After the Palazzo, the Strip is slated to see the debut of several new mega-resorts over the next few years, including MGM Mirage's (MGM.N) CityCenter and Boyd Gaming's (BYD.N) Echelon Place.
"Everyone has been consistently wrong about Las Vegas since the beginning," Weidner said, referring to prognosticators from as far back as the 1950s who said that the gambling corridor was verging on being overbuilt.
Solutions to bringing more people to the gambling haven could include making bigger airplanes or extending runway aprons at the city's current airport, the Sands executive said.
"We'll figure it out ... My view is that the infrastructure will follow the development," he said.
Aside from Vegas, Sands is betting big on casino projects in Asia, particularly the Chinese gambling enclave of Macau, where the company now operates two gambling resorts.
Weidner said heavy traffic at the Venetian Macao right after last week's Chinese New Year holiday -- 126,000 gamblers in one day alone -- should put to rest concerns about whether Chinese consumers would have an appetite for hotel rooms, entertainment options and retail offerings that matches their well-known gambling habit.
"The Chinese are showing up and paying $355 per room," he said.
Weidner said China has forecast that its residents will take 1.77 billion internal trips this year.
(For summit blog: summitnotebook.reuters.com/)
- Ukraine forces kill up to five rebels, Russia starts drill near border |
- Boy and girl on Korean ferry drowned with life jackets tied together |
- Children's corpses reveal desperate attempts to escape Korean ferry |
- Apple's China success sets stage for iPhone 6, new products
- Zimmer to buy Biomet for $13.35 billion in latest consolidation