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Las Vegas Sands Casino Revenue Tanks 47% in Qrt. 1 After Cutting Comps

By Liz Benston, Las Vegas SunMcClatchy-Tribune Regional News

May 11, 2011--After scrapping promotional offers such as free rooms to entice gamblers, the owner of the Venetian and Palazzo in Las Vegas reported a 47 percent decline in casino revenue in the first quarter and a 6 percent drop in room revenue as occupancy slipped to 83.9 percent.

Still, some experts say it's too soon to call Las Vegas Sands' strategy a flop.

The resorts have yet to cycle through multiple seasons that attract different types of customers, from tourists to conventiongoers, said Bill Lerner, a principal with investment analyst Union Gaming Group.

"I'd want to see the impact over a full year to understand what the impact is to volume at the property," Lerner said. "It's early in the initiative."

At the Las Vegas properties, slot machine wagering fell 36 percent and table games wagering fell by 13 percent in the first quarter compared with the same period a year ago.

Players were especially lucky at the tables during the quarter, which depressed results, the company said.

Promotional spending fell 64 percent in the first quarter, including fewer comps and lower business volume. Although occupancy fell, average daily room rates rose 2 percent to $212. Food and beverage revenue rose 12 percent as convention business improved, and retail, royalty fee and other revenue rose 28 percent.

While still comping its biggest high rollers and honoring points customers earn by gambling, the company decided to cut year-round enticements for ordinary gamblers with the goal of filling more rooms with cash customers.

The shift was dramatic, as the company said 97 percent of occupied rooms in the first quarter were rented for cash compared with 68 percent a year ago.

To bolster the effort, Las Vegas Sands signed a marketing deal last year with Intercontinental Hotels Group, a hotel giant with 180 million annual guests.

CORRECTION: Some of the percentage changes noted in this story have been updated. -- (May 11, 2011)


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