Brad Stone: It is $35 million for Palazzo.

Unidentified Analyst (Unidentified Firm): Can you comment on what you're seeing for forward convention bookings on the Las Vegas Strip the second half of this year and what your read is for next year?

Robert G. Goldstein: It's a challenging market. Certain segments within the group market are especially challenging; auto, financials, freight transportation. However, pharmaceutical, IT, fast food, insurance, biotech all seem to bode well.
We're going to rebound in the first quarter. We've had some disappointing cancellations, especially in the automotive sector. However, year-over-year we'll be up, albeit we have 3,000 rooms to fill. We're more sensitive to rate than we have been in the past. The trade show market's holding up well and the group market will bounce back. However, we're going to lose some important segments. Auto, financial, freight transportation will continue to be obviously nonperforming segments within the group market.

Sheldon Adelson: I've been in this business for 35 years, and I can tell you that what happened on 9/11 is a good example. It was much more drastic a hit on the market and more immediate than any economic slowdown. Everything is cyclical. There isn't anybody that doesn't think that we're in a trough right now and hopefully we're at the bottom of the trough. Some people will even say we're at the beginning of climbing out of it.
The convention market doesn't go sour for more than a year. If somebody had a problem this year, typically they won't have any problem next year because the fundamental need of people in the exhibition and the conference market is to get the latest information in order for them to carry on making a living. If somebody is short of information, they put their company at a competitive disadvantage and others will come and eat their lunch.
Thus they've got to see the new products, they've got to see what's going on in the industry and they have to discuss what research is showing. The other reason people go to shows and conferences is to recruit other people and to do PR.

Brad Stone: What is positive is that we're not losing trade shows. There is some slight attrition but there's no lack of shows. Shoe is in town right now. ASD shows up in a couple of weeks, then Magic. Hence there's strong trade show support in Las Vegas and we have the advantage of being able to open up our rooms to more trade show business because we're usually the host hotel.

Bill Weidner: We have the ability to be able to access the corporate market with the carpeted space that we have, access the exhibition market with the expo center that we have, all-suite rooms, be able to reach out into the gaming market further, to be able to then test the FIT markets. It's a product that allows us to be able to react to poor times like this and also a product that allows us to identify segments that may still be in good shape and then go out after those.

Brad Stone: There's concern about some of the airlift into Las Vegas. If you're going to be at a group or a trade show, you're going to get there someway or another. There's less discretion on the travel and certainly lots of lifts still exist to Vegas. Somebody attending those types of meetings or those types of exhibitions is going to make sure they get there because they need to.

Sheldon Adelson: The International Council of Shopping Centers, which is real estate oriented, has been hit hard and had a drop from 50,000 to 30,000 and we still sold out still at the same prices we had last year.

Unidentified Analyst (Unidentified Company): Did you break out the second quarter EBITDA between the Venetian and Palazzo?

Brad Stone: We said it was about $20 million.

Robin Farley (UBS): Could you talk about your strategy with the Palazzo condo sales in Las Vegas?

Sheldon Adelson: We don't expect the condo sales to come out at a slow pace. There's already a backlog of expressions of interest and we expect to start selling. We had a meeting on Tuesday, at which time we also had a Board meeting. The sales group came in and made a pitch.
We accelerated their efforts and tried to move them along. However, since we can't deliver the property until the end of 2009 or the first quarter of 2010, nobody seemed to have been in too much of a hurry. We reversed that kind of thinking and we said let's go and get our expressions of interest and then let's see what the market looks like.

Robert G. Goldstein: In respect to your comment about City Center, we have two thoughts. One is what I saw in street condos is not condo hotel and so we're a lot less than their 3,000 plus. Two, even at their current booking we hear their current sales pace means we'd be sold out in about 15 months with our inventory of 420 units. Lastly, the unique positioning of this property, where it sits between Venetian and the Palazzo, the amenity package, the views, it is extraordinary compared to everything else. I don't think we'll have a lot of resistance. If we priced this thing even at the low levels, we still have a very large profit margin based on our construction costs.
We feel very optimistic. In the worst case, looking at MGM's numbers, we'll see this thing out in 18 months.

Brad Stone: There is a wide variety of products down at City Center. This is more analogous to the Mandarin Oriental project at City Center and that sold out extremely well.

Steven Kent (Goldman Sachs): You've said that July was good and continued to show strength. Was there any impact of any visa restrictions or expectations of tightening visa restrictions

Sheldon Adelson: The impact of the visa restrictions has been compensated for by our own Cotai Jet ferry service and the increase of participation on the jet. Thus if there is any loss, we can't detect it at the Venetian. We just had two days on this past weekend, each day was over 100,000. One was 101,000 and the other was 104,000. Our increase in availability of seats on the Cotai water jet ferry service has manifested itself in substantially increased weekday and weekend attendance. Thus if there is an impact, we can't see it. There may be but we can't see it because our attendance is compensated for by some other factors.

Steven Kent (Goldman Sachs): Could you talk about the sales per square foot in Macau?

Bill Weidner: We know that attendance overall is up 28% to 29% month-on-month. We know retail sales are up about 12% to 14% month-on-month. There's a tracking. The most important indicator is slot revenues. Probably the direct line is much better drawn between people coming into the building and then increase in slot revenues. It's just steadily increasing as more and more visitations come.
Now we're going to convert more of that traffic to more mass table play as we focus more on the incentive programs and we can identify our high-quality people on the ferries, but the foot traffic looks to be almost directly measurable to slot income. Our income is per unit and our overall slot income is growing dramatically as foot traffic increases.

Brad Stone: We also see residual benefits in sales in the mall.

William Lerner (Deutsche Bank Securities): You talked about $70 million to $90 million in cost saves in Vegas between the two properties and then you talked about $60 million to $70 million in cost saves in Macau going forward. Is that 80% margin or is there some revenue impact of some of those cuts?

Robert G. Goldstein: There's going to always be some revenue risk. The goal is to cut the fat and not the muscle. We're trying. We're not going to do layoffs here. That's not in the vocabulary. The idea is cost containment through the labor side. We have a hiring freeze in place currently. It is downsizing some hours of some things we think we can do without off hours.
It's just being more judicious in our spending and paying attention to every corner of the building. This is a big building. There are 10,000 restaurant seats. There's 7,000 plus rooms. There's a lot that goes on here. We're just trying very hard to be really focused on every area we can save money, from the package center to the purchasing to our light bills, etc.
How much of it flows through? At the Venetian, Palazzo it's going to be important. I don't want to put a percentage on that yet. We're still measuring how far we can get. We started this back in April but obviously if you can reduce the headcount through attrition and if you can watch your spending, the flow-through is going to be dramatic.