Venetian reports improved results

The Venetian hotel-casino said Tuesday room occupancy, room rates and casino handle have shown steady improvement since its May 4 partial opening.

The $1.5 billion Italian-themed hotel leased an average 92 percent of its 3,000 available rooms each day in August at an average rate of $145, according to William Weidner, president of parent company Las Vegas Sands Inc.

That compares with an average occupancy rate of 85 percent and an average daily rate (ADR) of $127 in July, Weidner told attendees of an investment conference sponsored by Lehman Brothers.

While Weidner didn't disclose actual win figures for the sprawling resort's 2,500 slots and 122 table games, he did say overall slot handle rose to $4.2 million and table-game drop to $2.2 million a day by the end of August.

If the Venetian's games won at the same rate as the other major Strip casinos, those figures work out to about $116 in win per slot per day and $2,398 win per table game per day. The figures are moving closer to the projections Venetian executives made in raising debt financing for the project.

With convention and free and independent travel (FIT) business looking strong for the remainder of the year, Weidner is confident the improvement in the resort's financial performance will continue.

"Implementation of the Venetian's business strategy is coming into full swing with the onset of the meetings and convention season," he said. The Venetian has booked several big conventions in the past two months, partly as a result of its lawsuit that has delayed expansion of the Las Vegas Convention Center.

Weidner said two more restaurants -- Kevin Wu's Royal Star and Gian Paulo Belloni's Zeffirino -- have opened, joining eight other Venetian restaurants already in business. Two more are expected to open by year-end.

Weidner also said 55 of the expected 65 retail shops and boutiques are now open in the Grand Canal area replicating Venice's famed waterways. He said the C2K showroom will begin offering live entertainment by mid-October and WB's Stage 16, a themed dining and entertainment area, will be open by Dec. 31.

The Venetian opened in May with just 336 rooms and no restaurants or retail shops available. Since then, it has gained certificates of occupancy for all but the final 36 suites on its top floor, and its tenants have opened most of the shops and restaurants the resort has leased out.

The delayed opening contributed to a $30.9 million loss for the quarter ended June 30.

The improved financial performance since then may help owner Sheldon Adelson avoid having to dig too deeply into his own pockets to finance $39.5 million of interest payments due by Nov. 15. He plowed $16 million into the project during the second quarter and has told investors he'll make up any shortfalls in the payment due in November.

The Venetian's debt-service requirements rise to more than $130 million in 2000, making higher cash flow critical to the property's success. Cash flow -- generally defined as earnings before interest, taxes, depreciation and amortization -- measures a company's ability to make debt payments.

Adelson is also contending with the thorny problems caused by more than $300 million of liens filed against the Venetian by companies that built the resort. A district judge has consolidated the hundreds of liens into a single court case.

The Venetian and its general contractor for the construction project have settled some liens and are attempting to "bond around" the remainder in a bid to forestall foreclosure on various resort facilities if the claims are upheld.

Adelson wants to build another 3,000-room hotel-casino complex called the Lido next to the Venetian. The company doesn't expect to begin building the Lido "until at least next year," it said in a recent report to the Securities & Exchange Commission.

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