Ms. Pedreira: There are three large-scale developments under construction on the Strip today - CityCenter, Cosmopolitan and Fontainebleau. Those three, together, equate to a total of about 13,000 new rooms. And upon opening, about 40 percent of those rooms will be condo hotels, which may or may not get full utilization. That will depend on whether they're sold or not. This whole phenomenon of condo hotels was conceived to help the developer rapidly de-lever, because you could sell units and get cash immediately. However, with room rates down approximately 36 percent from the peak, and financing very difficult, those economics have made it really difficult to sell those units. What happens if those rooms are left unsold? How long could they sit unoccupied? Clearly there are going to be new rooms coming on just with the wholly-owned hotel rooms of these projects. All three of these projects had significant cost overruns. As a result, both Cosmopolitan and Fontainebleau are in bankruptcy and awaiting completion financing. CityCenter is the one that's a go - they have their financing in hand, and they're going to open in December with about 4,000 wholly-owned rooms and about 1,900 condo hotel rooms. This is the $10 billion resort owned by MGM Mirage (MGM) and Dubai World. Cosmopolitan has been acquired and is being redesigned by Hilton. It is expected to be completed mid-2010. Fontainebleau, which is the latest resort to have financial difficulties, filed for bankruptcy several weeks ago, so its opening is going to be significantly delayed. They don't have completion financing at the moment. So it's unclear. But certainly, any kind of delay in these other two projects is going to give the market time to recover. I think the 4,000 Aria rooms, which is part of CityCenter, are likely to be in high demand just given the novelty. Probably it is going to hamper any room rate recovery until the convention demand recovers. So, to answer your question, if all the condo rooms are sold, the new pie equates to about a 20 percent increase in Strip rooms. But it's only a 9 percent increase in the total number of rooms in Las Vegas if you consider there are 140,000 rooms in the entire market. There would not be excess capacity in my view had we not entered a recession. All of these rooms on the drawing boards were there to satisfy demand from the convention market, which had caused a very rapid inflation. Rooms had escalated 6 percent in price over the last 10 years. To the extent that that demand now remains depressed, customers are going to have the ability to trade up. The low-end hotels are going to be the ones that are going to suffer. And if demand doesn't pick up sufficiently, you're going to probably see some properties close.
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