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“Last of Vegas’ Big Four Projects” Paris Hotel and Casino Likely to Yield Highest Returns
Paris Should Bring Profits for Park Place Entertainment
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.

Paris 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.

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 worldwide. 

Bear, Stearns  Co. Inc., New York
Mary Flounders-Green
[email protected]
Also See: The $760 million Paris-Las Vegas Casino Resort Scheduled to Open in Fall 1999 / Jan 1999 
Bellagio's Opening Marks New Direction for Las Vegas / Bear Stearns Cites Concerns on Room Supply, Asia and Cannibalization / Oct 1998 

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