PPE flying high in the West

Oct 29, 2002 4:38 AM

   Despite a slump at Caesars Palace, Park Place Entertainment has found that the West is best.

   Cash flow in the Western Region — centered on the Las Vegas Strip — was up 45 percent for the third quarter ending Sept. 30, $87 million vs. $60 million for the same period last year.

   Paris/Bally’s was the star performer, posting $47 million in cash flow. That 56 percent increase reflected strong hold percentages on table games and sharply higher room revenue.

   Other Nevada properties — the Las Vegas Hilton, Reno Hilton, Caesars Tahoe and Flamingo Laughlin — combined for $14 million in EBITDA, doubling the cash flow of a year ago.

   Caesars was another story, however. In the midst of construction that shoved 350 slot machines off the casino floor, the property’s $5 million in EBITDA fell short of company expectations. Lower hold on table games was also blamed for the lackluster performance.

   Even so, Caesars’ showing was an improvement over last year. And Park Place execs expect better times ahead.

   “We’re making strong progress in transforming that property into a premier destination worthy of the best brand in gaming,’’ said Park Place President and CEO Tom Gallagher. “We’ll begin to see the results with the opening next March of ”˜A New Day,’ the Celine Dion spectacular at our new Colosseum.’’

   Work on the 4,000-seat arena continues on time and on budget, Gallagher reported.

   Meantime, other “Four Corners” projects are moving ahead at Flamingo and the Strip. Construction has begun on a new Strip entrance, restaurant and nightclub at Paris. Design work is proceeding on Jimmy Buffet’s Margaritaville restaurant and nightclub at the Flamingo, scheduled to open late next year.

   The new Park Place Connection Card drove substantial increases in cross-property slot play in Las Vegas. Revenue from Las Vegas customers who played at more than one company property in the first three quarters was 2.3 times over last year.

   Another technical improvement — online room reservations — also helped to boost the bottom line. Bookings through Park Place’s web sites jumped more than 80 percent during the quarter, with fully 15 percent of Paris/Bally’s reservations made via the web.

   Solid numbers in the Western Region helped the world’s largest gaming company post higher net revenue ($3.47 billion) for the first nine months of this year, despite slightly lower overall cash flow. Park Place paid down an additional $40 million in debt during the period and bought back 1.6 million shares of stock for $14 million.

   Other regions registered less impressive results. While the Mid-South enjoyed a decent 24 percent gain in third quarter cash flow, the Eastern Region was up just 3 percent.

   COO Wallace Barr, noting the tough Atlantic City market, announced that Park Place intends to integrate the Claridge and Bally’s hotels there to “achieve savings.” That news came on the heels of MGM Mirage’s decision to delay construction on a new hotel-casino adjacent to the Boyd-MGM Borgata venture.