Las Vegas Weekly

July 3, 2008 · 12 PM

This news is new — unless you’ve been reading Luxe Life

By Robin Leach

There’s been an amazing flurry of headlines this week both locally and nationally about Vegas news stories that all appeared weeks and months ago in Luxe Life. We rarely pat ourselves on the back but we’ll take credit for the story of Bette Midler finally obtaining her wedding photos after 23 years following her marriage here in 1984 at the Starlight Chapel to husband Martin Von Hasselberg. The photos came to light back in February when the owners closed down the wedding chapel. Luxe Life ran that story when she started her very first debut shows at Caesars Palace earlier this year -- but now the papers are jumping up and down as if it is today’s hot celebrity news when in fact its many months old.

Then Luxe Life broke the news that porn princess Tera Patrick was bringing her Hell’s Belles dancers to a new project at the Hard Rock. After I told you about the gambling pit near the new Wasted Spaces lounge there I was later told she wouldn’t be performing on a public stage in the casino- and that instead she would entertain with her dance show and dancers wearing her risqué fashion line in a special set of Body English concerts. We had those stories three times during June -- but only now has everybody else jumped on the surprise link between Tera and the Hard Rock.

None other than the prestigious Wall Street Journal ran a very depressing story about the current economic crisis affecting our Vegas casinos- and it reported that plans for Boyd Gaming to have the Hard Rock owners (Morgans Group) to open branches of their Royalton in NYC and the Delano from Miami Beach there had halted because of financing problems. Once again Luxe Life ran with that story more than three weeks ago, although I will admit the WSJ did get a Boyd executive to go on the record:

“Among those hard hit by the local decline is Boyd Gaming, started in 1975 by Sam Boyd and his son, Bill. The publicly traded company is bidding to become a big player on the Strip, via a $5 billion casino development on 87 acres. The project, called Echelon, is slated to include five luxury hotels, a retail promenade and an exposition center. Boyd is committed to funding $3.3 billion of the project, through a $4 billion credit line and its own cash. Despite the economic pressures and project costs, company officials say, Boyd has solid cash flow and a strong balance sheet. But Boyd has had to rely more on its credit facility as profits wane. Boyd reported a $32 million loss in its latest quarter. The company carries $2.4 billion in debt. To complete the project, it is trying to secure more than $1 billion in additional financing with two joint-venture partners. A spokesman for Boyd said the company is currently negotiating a financing package for the bulk of the additional funding. "We feel really good about our ability to finance that part of the project," says spokesman Rob Stillwell, referring to a $950 million loan to develop two hotels in conjunction with Morgans Hotel Group.”

The Wall Street Journal even quoted Harrah’s head honcho Gary Loveman: "This is the toughest environment we've faced," says the chief executive of global gambling giant Harrah's Entertainment Inc., referring to the economic challenges roiling the entire industry. Shares of several gambling companies have tumbled dramatically this year, washing out billions of dollars in market valuation. Las Vegas-based Boyd Gaming Corp. has fallen to about $12 a share, a five-year low, from a high of $54 last summer. After topping $98 last fall, shares of casino giant MGM Mirage now trade below $35. The public debt of Harrah's, which is highly leveraged after a $17 billion private-equity buyout last year, has traded as low as 52 cents on the dollar. Mr. Loveman, the chief executive, says Harrah's is profitable and is not in danger of default or a bankruptcy filing. The company, he says, is spending money to expand and improve existing properties, and is boosting visits to its regional casinos by chartering airplanes to fly in loyal customers.

Meantime I encourage you to read my friend Jack Colton’s blog as he has a very solid interview with 32-year-long Vegas resident Mike Fuller, VP of the N9NE Group at the Palms who says we will weather the current economic crisis and grow even stronger as a result. Jack commented: “ As someone who has seen Las Vegas nightlife from every imaginable perspective, it was a pleasure to have him offer his take on how the United States current economic climate will effect the Las Vegas tourism industry as a whole. Not surprisingly, as Fuller will further explain, things aren’t looking all that bad for Vegas! Here’s a sampling:

Jack Colton: Since you have been deeply involved behind-the-scenes in Las Vegas nightlife well before some of today’s current operators might have personally first set foot in our city, you have certainly seen where things have been. Let’s talk a little about where you feel like it is all going. With the United States in the midst of a recession and the cost of travel increasing dramatically as a result of an impending energy crisis, do you agree with so many of the experts who say that Las Vegas tourism, in general, will be somewhat “insulated” from the effects of everything?

Michael Fuller: Vegas is a very unique city. There is always someone that we can market to no matter what the economic climate dictates. In our present situation, it is actually really good for us because the pound and euro is kicking the US dollar so it makes very easy for the Brits to come to Vegas. In addition, because the US dollar isn’t worth as much in Europe it makes it very hard for the average American to take their holiday there, so instead, they stay in America and the obvious bang for your buck is Vegas. . The LVCVA picked up on this a while ago and even started a brand new department for International Relations. They focus on building press events in key countries like Canada, Mexico, and the UK and they deliver the Vegas message.

JC: There are as many as 10 new nightclubs slated to open on or around the Strip within the next year. How will the added competition change things?

MF: I think Darwin’s law of natural selection answers this question. Only the strong shall survive! A lot of half-baked ideas and clubs will fade away and the ones that have been in the industry and know what they are doing will rise to the top. We have already made major steps to position ourselves for this shift and I am 100% confident that when the dust settles, we will be standing there leading the way as usual.

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