Case Bets: Pinnacle, Macao, Sahara & Mirage

No trouble in River City: The opening of Pinnacle Entertainment‘s River City casino complex has leapt forward from May to March. Bully for Pinnacle, if this means that the project is going to be finished ahead of schedule. If this is a “soft opening” to churn some quick cash flow, not so good. Pinnacle is still CEO-less and job candidates must be chagrined to see “interim” bosses John Giovenco and Richard Goeglein (the guy who screwed up the Aladdin 2.0) making decisions with such far-reaching consequences, whether it’s this or folding Sugarcane Bay into L’Auberge du Lac to save money.

Look familiar? One of Stanley Ho‘s oldest and most disreputable casinos has been reinvented as the $193 million Casino Oceanus. If the exterior seems an awful lot like the Water Cube from the Peking Olympics, well, originality hasn’t been Paul Steelman‘s strong suit in a while now. However, even in the age of CityCenter, if you plunked this design down on the Las Vegas Strip, it’d still be a shocker.

Oceanus also flies in the face of the Sheldon Adelson-led trend toward Vegas-style resorts, completely eschewing hotel rooms in favor of gambling, gambling and yet more gambling … which is what the Macao market craves, isn’t it? Give Ho credit; he knows his customer base. Even as the elderly Ho continues to recuperate from what’s apparently a subdural hematoma, #2 man Ambrose So waxes bullish on the year to come, echoing predictions of 20%-25% revenue growth.

Another one bites it. The Sahara‘s been going downhill for a while, getting dirtier and more neglected. One doesn’t know whether to blame casino manager Navegante Group or the man holding the purse strings, absentee owner Sam Nazarian. (You may know him from the nighttime soap The Hills, where — in a Streep-worthy stretch — he plays the demanding role of “Sam Nazarian.”)

Anyway, a $272/night rate for New Year’s for a Sahara ain’t cutting it with the buying public and the Moorish-themed hotel is shutting down two of its hotel towers through the holiday season. When Primm is selling out over New Year’s weekend and the Strip isn’t, people like Nazarian and Woolf need to get the memo about repricing their product to reflect the economy. For the next nine days, you can get Sahara rooms starting at $30-$36. Who do they think they’re kidding with this $272 New Year’s Eve baloney?

On the plus side, maybe running the Sahara with fewer rooms will eventually goose its ADRs a bit. (The Sahara says it will reopen the towers when demand increases, which could be either Chinese New Year or never.) Besides, in such a saturated market, it might make a lot of sense to run the occupancy-challenged hotels with a leaner room inventory, putting one’s focus on the gambling value and better-quality food.

Rumor du jour. Speaking of hotel closures, The Mirage is alleged to be taking 14 floors out of service. It’s not like the place is hurting. During the week of Jan. 3-9, 2010, it will be one of only four leading Strip hotels to post a price increase (11%) from last January.

Update: It’s been confirmed that “some rooms” will be out of action. I’ll keep you posted. Meanwhile blogger R.C. Clark posts some worrisome Vdara statistics.