Transcript: Priced out of Vegas?

This is a partial transcript from "Your World with Neil Cavuto," February 23, 2006, that was edited for clarity.


Let's ask Terry Lanni. He's the CEO of MGM Mirage, which has many properties worldwide, including 10 on the Vegas Strip alone.

Congratulations on this incredible uptick in the quarter. What's responsible for it?

Bellagio and Mandalay Bay and The Hotel and a number of others. So, we really run the gamut.

ASMAN: You use the word "modest." What Rebecca was just reporting, what we have heard from other reports is, it's anything but modest. The prices are going sky-high.

Are all your profits coming from the high-rollers?

LANNI: Well, no. It comes from across the board.

I mean, out of our revenues, 59 percent of them come from non-gaming sources. And, if you look at it, the average price of a room in our 12 properties in Las Vegas for the last quarter was $166 a night. I would say Rebecca should go to New York or Las Vegas or San Francisco and try to decide where she could stay there for that kind of money. So, on a comparative basis, it's still low.

ASMAN: Right. But we are comparing it to the Las Vegas — we are comparing it to the Las Vegas of the past, not the New York of the present.

It has gone up. Hotel rates have increased 50 percent. I mean, you get some wonderful acts in Las Vegas. You get Paul McCartney, the Eagles, the Rolling Stones. But the ticket prices are anywhere from $100 to 400 bucks. A family of four can't afford that.

LANNI: No, you are right. There's no doubt about that. In fact, you mentioned those three shows. They are all three shows that are appearing at the MGM Grand Garden Arena. So, we are happy to have them as ours. And they sell out every time.

ASMAN: They sell out, but to whom? That's question, to the average American or to the high rollers?

LANNI: The average American, it's very difficult for them to go to those particular shows. There is no doubt about it. But you take a look at football games, I think the lowest price for a Super Bowl was $650 for a ticket, face value.

Everything is going up. And the average American does have a more difficult time. I'm saying that the Excaliburs and the Circus Circus properties, we have modest fairs that most of average Americans can afford to enjoy.

And I think that's important for them. But, when you spend $3 billion, or, as we are spending, $7 billion on our City Center project, you need to charge a higher price. And I think there is still plenty of room to go in the room rates. And I would think it's very difficult for anyone to get a room in a major city at an average rate of $166.

ASMAN: So, one final question — this is something everybody wants to know: Is the mob out of Vegas? And, if they are out, how did you get them out?

LANNI: Well, I can't believe anyone still thinks the mob is in Las Vegas. I mean, I cannot believe that whatsoever. That's an old thought that people have had for many, many years — and not the case anymore. I would show you the applications that we have to fill out, 136 pages long, and the scrutiny that we go through, and I would dare say this would be a bad place for anybody associated with organized crime.

ASMAN: All right.

Terry Lanni, well, congratulations. A thirty-one percent jump in earnings, just in one quarter, it's spectacular.

Thanks very much for being with us.

LANNI: Thank you.

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