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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
  • 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