LAS VEGAS— In an effort to “cut its losses,” Park Place Entertainment inked a deal to sell its Flamingo Reno casino/hotel and has laid off more than 1,500 employees at four of its Las Vegas resorts. The sale of the Flamingo Reno to Capital One LLC was in the works long before the Sept. 11 terrorist attacks that created significant losses within travel industry, said Debbie Munch, executive director/corporate communications for Park Place. The Nevada tourism market, which relies heavily on air travel, was hit hard with cancellations last month after four commercial planes crashed in New York City, Washington D.C., and Pennsylvania as part of a terrorist scheme. However, Park Place’s Flamingo Reno property was suffering prior to those events. “We regret the necessity of this decision, but the continued challenges in Reno, particularly the significant reductions in air service over the last 18 months, have caused our Flamingo Reno to operate at a loss. We have, therefore, agreed to sell the property and focus our resources on the Reno Hilton,” said Scott LaPorta, evp/CEO for Park Place. Park Place intends to close the Flamingo Reno at 12 noon on Oct. 23, and all guest reservations on or after that date will be honored at the Reno Hilton. The deal with Capital One is expected to close within the next 30 days; terms were not disclosed. However, in response to the decline in travel resulting from last month’s terrorist attacks, Park Place has laid off 1,500 of its 18,000 Las Vegas employees, representing 8% of its workforce. Munch noted that hundreds of employees, from all sectors of the business, were laid off at the company’s Ballys, Paris, and Flamingo Las Vegas properties. Significantly less employees were let go at Park Place’s Las Vegas Hilton, which relies heavily on convention business that is slowly picking back up in the region. No jobs were cut at Caesars Palace. The 2,400-room Caesars property is considerably smaller than the new mega-resorts moving into Las Vegas. Munch said the popularity of the casino requires it “needing all of its rooms,” and all of its employees. However, due to the economic downturn, the planned 900-suite addition to the Caesars hotel has been postponed. Though the tower is on hold, Munch noted that Park Place is still continuing the design process for the project and still intends to eventually move forward with the plan. The tower was expected to open during the first quarter of 2004; a revised date has not yet been determined. “We’re delaying making a capital commitment in the tower until at least the after the fourth quarter, to give us more flexibility to work through this recovery period,” she said. Despite having numerous cancellations and vacancies throughout the month of September, Munch noted that group bookings for the upcoming months seem “solid” and that all five of the company’s Las Vegas hotels were operating at 100% occupancy last weekend. “Weekend business is very strong now and mid-week business is beginning to solidify,” she said.
Flamingo Reno hotel/casino