LAS VEGAS Party is back in full swing

Tourism has made an almost full recovery since the terror attacks, with hotel expansions and a new resort.
LOS ANGELES TIMES
The nagging travel slump that has most of the U.S. tourism industry facing a recovery crapshoot has positioned Las Vegas as a high-stakes winner -- with packed hotels, rebounding room rates and profits for the city's leading casino giants.
Vegas has emerged as a strong bet in an uncertain economic climate largely because more leisure travelers and convention-goers are driving to Sin City rather than flying to places such as San Francisco and New York since the Sept. 11 attacks.
Gaming and tourism statistics show that Vegas has almost fully recovered from the travel slowdown that paralyzed the country immediately after the terrorist attacks, and analysts note that the industry's high-rolling companies are spending with bullish confidence, seemingly oblivious to the worst bear market in decades.
"Everywhere you look in Vegas says there's huge bets being placed on the future," said Keith Schwer, director of the Center for Economics and Business Research at the University of Nevada. "There's growth, crowds, construction ... and the latest earnings suggest not everyone is giving away rooms at significant price reductions anymore. There are considerable profits being made."
Earnings are up
Indeed, much of the gains reported by casino companies last week were attributed to higher hotel revenue; the Las Vegas Convention and Visitors Authority said weekend rates have returned to pre-Sept. 11 levels and the city is running at a consistent 93 percent hotel occupancy rate. Overall, average daily room rates were about $76 through August -- down about 5 percent from a year ago.
As a result, Park Place Entertainment Corp., the largest casino company and operator of Caesars Palace, Paris Las Vegas and other Vegas marquee names, said earnings for the third quarter were $40 million, or 13 cents a share, compared with a loss of $101 million, or 34 cents, a year earlier.
MGM Mirage, the No. 2 casino company, reported a $69.6 million third-quarter profit after a $14.4 million loss a year earlier. And Harrah's Entertainment Inc., the No. 3 company, said its profits rose 63 percent. All three companies also raked in more revenue during the quarter.
"Gaming revenues like this indicate rising consumer confidence and an improvement in discretionary spending," said David Givens, an associate economist with Economy.com. "It's believed to be an early indicator of economic growth."
Construction boom
Givens pointed to the construction boom under way in Las Vegas, including a new tower at MGM Mirage's Bellagio hotel that will add 925 rooms to the resort and increase its capacity by nearly 25 percent, as well as a $225 million expansion of the Mandalay Bay hotel and casino that will add 1,125 rooms.
And Steve Wynn, the casino mogul who led the city's transformation of the past two decades with the creation of theme-oriented resorts such as Treasure Island, Mirage and Bellagio, is preparing for a comeback after selling his Mirage Resorts Corp. to MGM Grand Inc. two years ago. Last month, he took his company, Wynn Resorts Inc., public and raised at least $400 million to finance plans to build a $2.4 billion, 2,700-room casino and resort called Le Reve on the Strip.
Wall Street's view
Still, shares of the top Vegas casino operators fell after earnings were reported last month. Analysts speculated that was because forecasts were either lower than expected or the companies didn't provide enough guidance for the future.
Jason Ader, a gambling analyst with Bear Stearns Co., said he anticipates another two or even three "tough quarters" for the high-end gaming industry as consumers resume their search for travel deals in what continues to be an unsettled economy.
"Competition for the tourist dollar is going to remain high," Ader said. "Vegas is recovering better than most destinations, but they can't claim they're completely out of the woods yet."
City tourism officials say a full recovery isn't far away, due in large part to an increase in convention business that has already exceeded 2000 levels for the year. Through August of this year, nearly 4 million convention-goers have traveled to Las Vegas, bringing in some $4.4 million for the city during their stays. That compares to 3.8 million convention-goers for all of 2000, when convention spending totaled $4.2 million.