Hotel Online Special Reports

Is the Venetian Trying to Push Your Convention
into Buying Expensive Blocks of Rooms at its Las Vegas Hotel?

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.

1997 Average Daily Room Rate (ADR) for Las Vegas Strip Resorts with over 50,000 square feet of convention space
Caesars Palace  $ 128
Mirage  $ 125
Las Vegas Hilton  $ 103
MGM Grand  $ 101
Bally�s  $ 93
Flamingo Hilton  $ 81
Tropicana  $ 64
Riviera  $ 60
(ADR from Bear Stearns� December 1997 report, �Gaming Industry,� 3Q 1996 to 3Q 1997.)

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.
 One Las Vegas reporter commented on the brewing labor dispute at the Venetian, noting, �Sheldon Adelson makes Margaret Elardi [owner of the old, strike-ridden Frontier] look like Norma Rae.�

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.

Available Convention and Meeting Space 
at Other Las Vegas Strip Resorts 
(in order of square footage)
Square Footage
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.
For more information on the items contained in this brochure, as well as updates on the status of the labor dispute at the Venetian, please visit:
Prepared April 1998 by:
Research Department
Culinary Workers Union Local 226
1630 S. Commerce Street
Las Vegas, NV  89102
email: [email protected]
 Also read: Castles Made of Sand: A Critique of Las Vegas Sands� Planned Mega-Resort

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