Here are the Planet Hollywood notes from our meetings in Las Vegas last week
Strip commentary:
- The bridge connecting both sides of the strip should be completed by Dec 2010
- They think that the Cosmo will open Dec 2010 in some limited capacity
- There has been absolutely no activity on the Fontainebleau, and apparently they have shut down their office too – no one is picking up the phones there
- We heard from a second source that PENN is trying to buy the project for around $100-$150MM, and other potential investors are looking at buying the site for similarly small amounts given the $1.5BN+ of funding the project still needs to open
Business environment:
- “We’re bumping along the bottom”
- For September, occupancies are in the 90%’s, but ADR is still very depressed.
- The next five nights in Vegas are booked solid with three conventions in town.
- When we met with Planet Hollywood in April they told us that they were testing increasing rate… apparently they tested it and couldn’t pull it off
- They are trying different strategies post guest bookings to up sell the customer
- Selling early arrivals, giving free liquor with room stays, allowing guests to “bid” on a premium room when they are available
- They are trying different strategies post guest bookings to up sell the customer
- The lack of business travel is an issue, so the occupancy is lower quality
- Value restaurants are doing very well, fine dining not so much
- Summer occupancy was ok, but spend per customer and ADR continued to be weak
- Groups are still struggling, when they are willing to make future bookings they want to make them at $150 per night, not $200. Leisure is a little better
- Baccarat play is generally stronger than other segments
