Las Vegas Strip Hoping for a New Year’s Eve Jackpot

The casinos along the Las Vegas Strip are expected to fare better this New Year’s Eve than last, when expensive millennium festivities drew disappointing crowds, analysts and casino executives say.

About 260,000 people will visit the gambling mecca this weekend, about 10,000 more than last year, the Las Vegas Convention and Visitors Authority said.

Though casinos are charging lower room rates than last year, analysts said holiday rates are still higher than in 1998. And casinos are not spending as heavily as last year, when top-drawer performers such as Barbra Streisand and Elton John were booked for New Year’s Eve.

“There are higher occupancies, more people in town and lower entertainment costs,” said Bear Stearns Co. analyst Jason Ader, who anticipates hotel rooms will be at least 90% filled.

Last year’s millennium celebration was considered a bust for Las Vegas. Potential visitors balked at $1,500 room rates at some of the best casinos, leaving hotels with empty rooms. Some were fearful of flying as computer clocks switched to the year 2000. Mandalay Resort Group, the biggest hotel owner on the Strip, missed its fourth-quarter earnings estimates as a result.

“It was pretty much a disaster last year,” said analyst William Schmitt of CIBC World Markets. “Nobody anticipated that people were going to stay home.”

The calendar will help this year. New Year’s Day falls on a Monday, meaning many travelers will stay in hotels for three nights. Last year New Year’s Eve fell on a Friday.

Rooms at MGM Mirage Inc. properties, which include the Bellagio and MGM Grand, are nearly sold out for New Year’s Eve, said spokesman Alan Feldman. And that’s with $700 room rates at the Bellagio, about three times the typical weekend rate.

More people in hotel rooms don’t necessarily translate into better profits though, Schmitt said. If casinos are forced to fill rooms through consolidators, who buy blocks of rooms and sell them at discounted prices, higher revenue on the top line may not trickle down to the profit line.

One hotel consolidator said he’s getting fewer rooms from Las Vegas now than at any point this year, meaning the casinos are selling more directly at higher prices.

Bob Diener, president of Hotel Reservations Network Inc., said Las Vegas is unloading fewer rooms than New York and Orlando, Fla., which are seeing slower holiday demand.

“We do have a good supply for New Year’s, though it’s not as high as it was the other times of the year,” he said. “That’s a good indication for Vegas.”

MGM Mirage is spending “millions less” for entertainment this year, said Feldman, relying instead on New Year’s Eve performances by regular acts such as Siegfried & Roy.

To spice things up this New Year’s Eve, the Las Vegas visitor’s authority has a $500,000 fireworks display set to go off at midnight from the rooftops of 14 Strip casinos.