|NEW YORK - --Sept. 1, 1999-- Las Vegas’ new 2,916-room Paris
Hotel and Casino by Park Place Entertainment (NYSE: PPE) is a rare construction
project for the desert city, as the property will open on time and within
budget, says Bear Stearns senior managing director Jason Ader. At $785
million in development costs, Paris was the lowest-cost—and the last—of
Vegas’ “Big Four” hotel-casinos, Mr. Ader reports. Further, he indicates
that it should generate the highest annual return on capital invested at
14 percent to 16 percent, versus its peers’ 10 percent to 13 percent.
“Paris is an exciting and amenity-rich property that was a bargain to
develop - by Vegas standards,” Mr. Ader said. “In recent years, Vegas hotel-casino
building costs have soared as owners created lavish themes to lure visitors.
With Paris, Park Place has created at a reasonable price an appealing property
with eight restaurants including the signature Eiffel Tower restaurant,
which sits on the 11th floor of the Eiffel Tower replica, and extensive
shopping,” Ader says.
opens at a time when fundamental trends in Las Vegas are superb, according
to Mr. Ader. Average daily hotel room rates have increased an average of
15 percent to 20 percent in 1999. Casino revenues, tourist arrivals and
the number of overnight stays in the desert city are all strong as well,
and the rest of the year looks even better, Mr. Ader notes.
“Our forecast is bullish for Vegas for the remainder of 1999, with room
prices likely to remain strong on The Strip. We expect overall visitation
to Vegas to increase 10 to 12 percent in 1999.
Paris should help further the surge in visitation that was created
following the opening of Bellagio, Mandalay Bay and the Venetian,” adds
Mr. Ader expects Paris to add $120 million in cash flow to Park Place
Entertainment’s 2000 earnings. Mr. Ader maintains an Attractive rating
on Park Place.
Bear, Stearns Co. Inc., a leading investment banking and securities
trading and brokerage firm, is a major subsidiary of The Bear Stearns Companies
Inc. (NYSE:BSC). With approximately $20.1 billion in total capital, Bear
Stearns serves governments, corporations, institutions and individuals