This is a partial transcript from "Your World with Neil Cavuto", March 12, 2004, that was edited for clarity.
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NEIL CAVUTO, HOST: My next guest certainly has a hot hand with a full house on the Las Vegas strip. But is that enough to hit the jackpot in the high stakes sector?
Joining me now, a fellow who has already proven that he is. He’s the president and CEO of Mandalay Resort Group, Glenn Schaeffer.
You’re on fire right now, young man. What’s going on?
GLENN SCHAEFFER, MANDALAY RESORT GROUP PRES. & CEO (MBG): Well, Las Vegas is on fire. It’s never been hotter. You have record number of customers coming to the strip. And they’re paying higher prices.
CAVUTO: You know, it’s interesting when we look at the stocks here, they’re all -- I mean, this is like Internet boom time here, which always begs the question, can it last?
SCHAEFFER: Is it sustainable? Well, every year more customers come to Las Vegas strip than the year before. That’s been the history. And it’s no different. You know, Las Vegas today is part of the consumer lifestyle in America.
CAVUTO: You and I were mentioning during the break, and I subscribe to this, too, Glenn, because I’ve come to Las Vegas many times over the last 20 years, it’s very different now. It’s not a casino mecca. It’s not a gambling mecca. I think it’s now an entertainment family mecca. What happened?
SCHAEFFER: Well, Las Vegas is this leading entertainment destination in the world. Over the 1990s, it seemed like every other state and occasionally native American tribes got slot machines and table games.
CAVUTO: And that was supposed to kill you guys.
SCHAEFFER: And it didn’t. We had to reinvent ourselves into being the most exciting place in terms of a total entertainment package you could find.
CAVUTO: Yes. Let me ask you a little bit about the casino business, that says a lot -- and particularly with the conventions that come in, that says a lot about the American economy. Do you think, reflective of that, that it’s good for the economy? What’s happening here?
SCHAEFFER: Well, look, if you look at the entertainment economy, it’s on its way to being 10 percent of GDP in this country. And our sector of that economy has been the fastest-growing part for the last five years.
CAVUTO: Yes. There’s this big a hullabaloo about Project Z or something like that that you’ve got. What is that?
SCHAEFFER: Well, we own an entire mile on the south end of Las Vegas strip. We have one more site next to Mandalay Bay. It’s in concept. We’ll be able to build up from our free cash flow when we’re ready.
CAVUTO: What is in concept?
SCHAEFFER: Project Z, which would be another destination hotel/casino.
CAVUTO: Would it cannibalize what you already have?
SCHAEFFER: No, each time we build a new place, it creates a new segment of the market.
CAVUTO: Are you guys ever worried? Every time I go there, I can never figure industry out. They’ve got these massive complexes, thousands of rooms. They’re all always booked. Can’t last that way forever, can it?
SCHAEFFER: But it has. The Las Vegas strip in a normal year will be 85 or 90 percent occupied with rising prices.
CAVUTO: Do you see the draw here being the casino business or the convention business or both?
SCHAEFFER: It’s both. It’s all. You know, it’s an entertainment destination. Business travelers like going there because there’s more to see and do. They like the value proposition, the price is right, relative to all that you can see and do. So do families, so do couples traveling, so do singles. If you look at Las Vegas, there’s nothing else like it.
CAVUTO: Well, if I owned your stock and you’d seen the appreciable run-up, I’d be smiling and laughing. I wouldn’t wear a tie, either. So obviously you’re not -- Glenn Schaeffer, thank you very much. Mandalay Resort Group president, CFO and well, who knows what else with Project Z, whatever they’re calling it.
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