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The Venetian Hotel & Casino, currently under construction, is purported to be requiring conventions to book rooms at its property as a condition of using the Sands Expo Center.
Sheldon Adelson � developer of the Venetian and owner of the Sands Expo
Center � intends to use the link between the two in order to have convention-goers
fill the Venetian�s rooms. Convention and meeting planners should
note two major problems with this arrangement:
The Venetian intends to have the most expensive rooms on the Las Vegas Strip, at a time when there is a downward pressure on room rates in Las Vegas; |
The Venetian has provoked a substantial and escalating labor dispute, and is considered the most controversial project in Las Vegas by many. |
Room Rates Against the Grain?
The Venetian plans to charge convention-goers room prices significantly higher than its competitors in Las Vegas. William Weidner, President and COO of the Venetian, said of convention-goers, �If we�re charging $175 to $180 a night, they won�t blink an eye�,� while a December 1996 Las Vegas Review-Journal article noted the Venetian plans room rates averaging as much as $280 per night.
The Venetian�s high prices come at a time when there is significant
downward pressure on room rates in Las Vegas. 1997�s Las Vegas Strip
average daily room rate ($84) was virtually unchanged from the previous
year. An expected 27% rise in Las Vegas hotel room capacity over
the next five years � including Mirage Resorts� Bellagio, Circus Circus
Enterprises� Mandalay Bay and Hilton�s Paris � will contribute to the stabilizing
or lowering of room rates.
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Caesars Palace | $ 128 |
Mirage | $ 125 |
Las Vegas Hilton | $ 103 |
MGM Grand | $ 101 |
Bally�s | $ 93 |
Flamingo Hilton | $ 81 |
Tropicana | $ 64 |
Riviera | $ 60 |
Industry observers expect this trend to continue. Bear Stearns
& Co., one of Wall Street�s leading gaming analysts, concluded 1997
by stating,
"�the average daily room rate at major Strip properties has remained relatively flat. As a result, we believe that the high-end rooms will be the most vulnerable to discounting and that a domino effect could occur throughout all price points." |
The Venetian even intends to price its rooms higher than Bellagio, Mirage Resorts� $1.6 billion upscale project that is set to open this Fall.
Just three years ago Mr. Adelson was sensitive to the cost of rooms affecting COMDEX, Las Vegas� largest convention. In February 1995, when Mr. Adelson owned COMDEX, he told the Las Vegas Review-Journal,
�Continuation of rising room rates has to be considered,� Adelson said. While casinos must recognize that COMDEX attendees do little gambling, Adelson considers it unfair to charge $189 per night for a room during COMDEX that goes for $29 after the show.
A strong response from convention and meeting planners to the Venetian�s high room rates may force that company to bring its prices closer in line with the Las Vegas market norm.
Picket Lines at the Venetian?
Mr. Adelson�s repeated attacks on the Culinary Union and its members have already brought the labor dispute at the Venetian to a fever pitch.
The Venetian�s dangerous anti-union stance is at odds with the pattern of harmonious labor relations set by Las Vegas� most successful operators. It also places the Venetian in an unenviable position, particularly given its planned reliance on convention business.
The Bellagio, Mandalay Bay and Paris resorts are all expected to be covered by a Culinary Union contract, leaving the Venetian likely to be the sole Las Vegas Strip hotel/casino facing labor disruptions.
Indeed, Mr. Adelson�s anti-union policy has set the Venetian on a course
reminiscent of other labor disputes � now settled � that have plagued the
Las Vegas Strip in recent years:
At the MGM Grand, 5,000 unionists greeted that resort�s opening with picket lines, and 500 were arrested as they picketed on the sidewalks MGM Grand then asserted were private property. The Culinary Union now has a contract in place for MGM Grand�s 3500 workers and enjoys good relations with that company. |
At the Frontier Hotel, then-owners Margaret Elardi and her two sons forced a strike that lasted six and a half years. Picket lines surrounded that resort 24 hours a day, 7 days a week for the duration. The strike ended three months ago when a new owner bought the Frontier, signed a union contract and brought the strikers back to work. |
Is There Another Option?
Sheldon Adelson�s Venetian project is shrouded in controversy.
Convention planners and attendees seeking a worry-free convention experience would do well to plan their meetings and conventions elsewhere. Doing so would avoid room prices substantially out-of-line with the Las Vegas norm and a serious labor dispute that is growing.
Convention and meeting planners can avoid the Venetian�s problems at
any one of these other Las Vegas Strip hotel-based convention sites.
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MGM Grand | 380,000 sq.ft |
Las Vegas Hilton | 220,000 sq.ft. |
Riviera | 186,000 sq.ft. |
Bally�s | 175,000 sq.ft. |
Caesars Palace | 170,000 sq.ft. |
Paris (opening mid-1999) | 130,000 sq.ft. |
Bellagio (opening late-1998) | 125,000 sq.ft. |
Mandalay Bay
(opening early-1999) |
120,000 sq.ft. |
Mirage | 100,000 sq.ft. |
Tropicana | 100,000 sq.ft |
Flamingo Hilton | 60,000 sq.ft. |
Harrah�s | 30,000 sq.ft. |
Monte Carlo | 25,000 sq.ft. |
Stardust | 25,000 sq.ft. |
Desert Inn | 22,000 sq.ft. |
Luxor | 20,000 sq.ft. |
Treasure Island | 18,000 sq.ft. |
Circus Circus | 16,000 sq.ft. |
Excalibur | 13,000 sq.ft. |
New York-New York | 12,800 sq.ft. |
New Frontier | 11,000 sq.ft. |
Fitzgeralds | 9,000 sq.ft. |
Stratosphere | 9,000 sq.ft. |
Sahara | 8,500 sq.ft. |
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