Thursday, April 28, 2011

(No.149) Sun & Manulife: bye bye retrocession

I have long editorialized privately and publicly (including in the columns of about the risks and downright looney aspects of the reinsurance business. The chickens are coming home to roost for some companies in the part of the business involving life insurance retrocession, i.e., reinsuring life insurance risk received from reinsurers.

There are two leading Canadian life insurance companies with an involvement in the retrocession business: Sun Life which has recently sold its retrocession business and Manulife which I hear is trying to sell its retro and may succeed in doing so by the end of this year.

At the end of 2010 Sun Life sold its life retrocession business to Warren Buffet's Berkshire Hathaway Life Insurance Co. for a gain Sun said of $310 million net of taxes. In fact Berkshire is one of the few companies these days that will still take on blocks of in force retrocession business which others wish to get rid of and one of the few with the capacity to do so.

While Sun has now wisely left the retrocession business it would have been better for the company had it done so a couple of years ago when a better price might have been obtained.

In the past decade there have been several negative factors at work affecting companies like Sun and Manulife doing retrocession business (although Manu's reinsurance business was not confined to life retrocession):

1. As mortality profit improved reinsurers kept increasing their own retention of the risk reinsured with them by (retail) life insurance companies. Hence there came to be less reinsurance risk being retroceded to retrocession operations like Sun Life's. For example: in 2004 in the U.S. Sun Life assumed $10.3 billion of new "ordinary" [individual life] insurance retrocession (plus $2.1 billion in Canada). By 2009 Sun does not even show up as being in the new retrocession game.

2. In the U.S. market during the past decade many retail life insurance companies have steadily gotten back to retaining on their own books more of the insurance risk they were selling and issuing and more retail companies were moving to use their own full amount of retention of risk on such business.

In the U.S. in 2001 life insurance companies ceded to reinsurers 63% of risk; by 2010 this proportion was down to 30%. Therefore, in the biggest market for large and capital intensive risks, the increase in the amount and proportion of risk retained by the insurer and by the reinsurer left much less new business for retrocessionaires and what there was tended, as years passed, to be not all that attractive.

3. There developed an increasing use by insurers of multiple reinsurers when large amount cases were involved in order to spread the risk for fear a reinsurer might go under financially. A major effect of this pattern was that a retrocession company ended up with an unusual block of business made up of relatively few extremely large cases with the potential of large mortality swings. Moreover the price that retrocession companies asked for taking on such business was becoming high enough that it actually served to encourage a trend for higher levels of policy risk to be retained by both the insurer and its reinsurer(s).

Hence what was once a profitable segment of the insurance business -- retrocession -- continued to decline. In the U.S. new ordinary retrocession amounts declined from a total of $32.6 billion in 2003 to $7.2 billion by 2010. However it took some time before several companies accepting retrocession business (like Sun) were actually ready to fully recognize what was happening.

To the extent that Manulife's reinsurance business is comprised of retrocession, the same applies only more so since Manu has not yet disposed of its retrocession business -- one larger than Sun's for which Manu is unlikely to get as good a deal as Sun did by moving sooner to sell.

In Sun's case it looks as if Berkshire picked through Sun's blocks of retrocession and refused to touch a retrocession carcass or three, i.e., blocks of business that are losers. Sun says only that "our run-off reinsurance business, which is a closed block of reinsurance assumed from other reinsurers, is excluded from this [sale] agreement [with Berkshire]."

It would have been a victory for the cause of more detailed and useful financial disclosure had Sun Life actually stated how bad its retained block of retrocession business (i.e., the business that Berkshire would not buy) and how long its run-off by Sun Life will take.

Still, to be fair to Sun, it has sold its retrocession business. When Manulife sells whatever portion of its retrocession in force business for which it can find a buyer ( it's unlikely to go anywhere but Berkshire) I expect we will see that Manulife does not disclose any details of the in force retro business blocks it has to keep for lack of a buyer and then run off its own books.

It is worth noting that, just as with the troubled guaranteed variable annuity business that has so challenged Manulife financially in recent years, its involvement with the retrocession part of the reinsurance business has been much larger than Sun's. For example: Manu's U.S. retrocession ordinary in force had only declined to $85.7 billion by 2010 (from $97.3 billion in 2003); however the lie of the land is seen in the fact that its new assumed retrocession business in the U.S. went from $12.9 billion in 2003 down to $2.8 billion in 2010. In any case Manulife has stayed way too long at that dance.

Finally, in contrast to the U.S. where the ceded life insurance risk by retail life companies has declined so much in the past decade, note that in Canada life insurance companies still reinsured 75% of their individual life insurance risk in 2010. That's better than 90+% but far from enough of an improvement to indicate that retail life insurance companies here are in the main serious about increasing their own financial role and stake in the actual business of selling and issuing life insurance coverage to Canadians as distinct from playing about in the 'financial reinsurance business' as (they hoped) a source of profit.


by: Alastair Rickard



Saturday, April 23, 2011

(No.148) Hitler's pyromancy (the Philip Kerr novels)

I wrote the following review article for two daily newspapers: The Waterloo Region Record and the Guelph Mercury.

It appeared in those newspapers on April 16, 2011 under the heading "A morally ambiguous character".


The Scottish writer Philip Kerr is a favourite of mine. This month sees the publication in Canada of the seventh novel in his Bernie Gunther series, Field Gray (Putnam, 33.50, hardcover). It is the most complex in this series of historical thrillers making use of multiple flashbacks to three time periods: pre-war Berlin, WWII France, Germany and Russia, and post-war Russia, Cuba and Germany.

Kerr has brought life in pre-war Nazi Germany and in post-war occupied Germany alive using as his first person narrator a Berlin detective working for the Kriminpolizei (Kripo) named Bernie Gunther who, refusing to become part of the 1933 National Socialist takeover of the country including its police, soon left the Kripo and became a private detective and for a time a hotel detective at Berlin's upscale Adlon Hotel.

Kerr began the Bernie Gunther series with three novels published in short order: March Violets (1989) the title comes from the deprecating name commonly given in Germany to those 'late comers' who didn't join the National Socialist Party until after Hitler had assumed dictatorial powers on March 23, 1933; The Pale Criminal (1990) and A German Requiem (1991) set mainly in occupied 1947 Vienna, the first two novels having been set in Berlin. This superb trilogy was subsequently republished in one volume in 1993 under the title Berlin Noir.

The Bernie Gunther novels have been called by some reviewers "suspense thrillers" and "murder/political mysteries" by others. They have been likened with good reason to the fine novels of the American Alan Furst set in pre-war Europe and to the fascinating "station" series set in pre-war Berlin by David Downing. Another comparison which occurred to me when first reading Berlin Noir was with a lead character in the Robert Harris 1992 bestseller Fatherland, an interesting novel based on an unusual premise: it is set in the 1964 of a victorious Nazi germany whose lead character Xavier March is, like Gunther, a detective in the Kripo.

Kerr's novels with Bernie Gunther, no anti-Semite, as the lead character depict in appropriately dark and ominous tones what everyday life became after 1933 for Germans and -- most darkly -- for Jews in Germany. Indeed the steadily more inhumane treatment of Jews in post-1933, pre-war Germany is one of the key plot lines in the first two novels of the Berlin Noir trilogy.

In 1936 Gunther was sent to Dachau concentration camp by the SS. As he observed in March Violets "Dachau was the model for all later camps; there was even a special school there to train SS men to be more brutal." The portrait Kerr paints of Dachau, speaking through Gunther (who managed to extricate himself -- barely), is stark indeed.

Gunther was assigned to an "Aryan Hut" at Dachau: these housed 150 men while the Jews were assigned huts which "contained three times that number. It was true what they said: there's always somebody else who is worse off than you. That is unless you were unfortunate enough to be Jewish. ... in all respects Jews were the worst off. ... I met a convict who was a Jew. He was also a homosexual. And if that weren't enough he was also a communist. That made three triangles. His luck hadn't so much run out as jumped on a fucking motorcycle."

For many readers I suspect that the first three novels are likely to do more to bring alive pre-war Nazi Germany than would picking up most histories of the post-Weimar Republic period.

Bernie Gunther is, before and after the war (and especially during it, on the eastern front), far from heroic or even all that sympathetic. This harder edge is softened a bit in the next three novels in the series; the first of this trio did not appear for more than a decade after the first three. In talking about his lead character Kerr has described Gunther as "a real democrat. A Republican. He believed in the Weimar republic. ...If he's cynical it's because he learned cynicism in the First World War."

In Field Gray we learn finally about what Gunther did in fighting the partisans in Russia as a member of the SS. Even before the novel was written Kerr admitted that "I like morally ambiguous characters. Yes [Gunther] feels guilty. And as the series progresses I want that guilt to increase as more of what Bernie did comes to light."

In this latest novel Kerr has Gunther say this:

"I commanded a firing squad that executed thirty Russian POWs. At the time I didn't feel bad about this becasue they were all NKVD, and less than twelve hours before they themselves had murdered two or three thousand prisoners at the NKVD prison in Lutsk. They also murdered some German POWs who were with them, which was a miserable sight. I suppose you could say they had every right to do so given that we had invaded their country. You could also say that our executing them in retaliation had considerably less justification, and you'd probably be correct on both counts."

The plots of the 4th, 5th and 6th novels occur chronologically -- in part -- but like Field Gray follow Gunther in different periods within the same volume: The One From The Other (2006) in 1937 Palestine and 1949 Munich; A Quiet Flame (2008) in Berlin 1932 and Buenos Aires 1950; and the 6th novel, the award winning If The Dead Rise Not (2009) finds Gunther in 1934 Berlin and pre-revolution Cuba in 1954.

Bernie Gunther is a hard and perforce a cynical man. Near the beginning of The Pale Criminal he must meet someone at night at the ruins of Germany's parliament building, the Reichstag. As he approaches he observes that the Nazi-organized 1933 Reichstag fire had been "the clearest piece of pyromancy that Germany could have been given as to what Adolf Hitler and his third nipple had in store for us."

Gunther drinks, smokes and womanizes to excess but above all he is a survivor. He has the tired attiude of a man who has already seen too much. He has the words to create pictures, as when he describes smoking American filter cigarettes post-war as "like eating a hot dog after 50 years of bratwurst."

Field Gray illustrates Gunther's survival skills before, after and during World War II even better than any of its predecessors in the series. The novel addresses a particularly dark period in Gunther's life: the war on the Russian front during part of which he was forced into serving in an SS unit. In the previous novels of the series there have been only brief references to that period of his life including his capture by the Soviets near the end of the war and his escape from internment after a year.

I recommend without reservation the Gunther novels including the latest. They are enjoyable and rewarding reading. I suggest that readers new to the series save the reading of the latest, Field Gray, to the end. Read the preceding six novels first and in the order in which they were published.


by Alastair Rickard



Wednesday, April 20, 2011

(No.147) Insurance & a securities regulator

When the Canadian government decided to to push ahead with establishing a national securities regulator, it knew it would face strong opposition from the provinces which have their own securities regulators. The opposition would certainly be strongest from Alberta and Quebec with strong support only from Ontario.

Federal Finance Minister Jim Flaherty decided in the spring a year ago, while the feds busied themselves laying the groundwork for the national regulatory regime, to refer the proposed Securities Act to the Supreme Court of Canada for a ruling on whether it falls within federal jurisdiction.

In March 2011 the appeal courts in both Alberta and Quebec ruled that the proposed federal legislation was unconstitutional.

Following the handing down of the Quebec decision on March 31 I received an email from a Quebec political insider: "After all, I guess you were quite right." He was referring to a column I had written and posted almost a year ago on headed "A national securities regulator? Maybe not" in which I refused to join the (then) chorus of 'experts' predicting federal victory.

The Supreme Court of Canada had set aside two days last week for hearing arguments from federal and provincial government lawyers. These included not just those representing Quebec and Alberta but also B.C., Saskatchewan, Manitoba and New Brunswick. Some of the latter group were not so much opposed to the proposed federal law as worried that it would create a troubling precedent for provinces by giving Ottawa de facto jurisdiction over insurance.

It will likely be several months before the Supreme Court issues its decision on the proposed federal securities legislation but it seems an appropriate point at which to repeat the comments on the subject I made almost a year ago, especially since the 'experts' featured in so many of the media reports back then who were confidently asserting a federal judicial victory have fallen silent. They now seem to have retreated quietly into the bushes, a good place for those who wish to be able once the SCC decision is handed down to foster some appearance of wisdom even if after the fact.


From, May 30, 201o:

Federal Finance Minister Flaherty (a former Ontario Treasurer) has announced Ottawa's intention to introduce legislation to create a national securities regulator, the long desired (by Ottawa) securities czar favoured by Ontario but opposed by several provinces and still strongly opposed by Alberta and Quebec.

Flaherty has wisely decided to first seek an opinion from the Supreme Court about whether or not the federal government has the authority under the constitution to undertake this change -- even with the current proposal allowing provinces to opt out. Why wisely? Because it is far from certain that the Supreme Court will validate the feds' approach in terms of pushing aside the provinces in the securities field.

The Globe and Mail's Report On Business approached the subject (May 27, 2010) with its usual pro-federal, breathless business angle declaring that "most legal experts believe the country's highest court will approve Ottawa's request."

Perhaps these include the same 'legal experts' who were sure that the banks' challenge to provincial insurance jurisdiction was bound to succeed once it landed before the Supreme Court. A Globe editorial (May 28, 2010) considered whether the proposed federal Securities Act would be found to be acceptable to the Supreme Court and, of course, decided that "probably it will say it is". But then the Globe's editorial logic is not always water tight.

I argued for many years in articles, editorials, speeches, life insurance industry committees and internal company memoranda that if the insurance jurisdiction of the provinces over agency matters was challenged by the feds, or by the federally regulated banks as it related to their insurance activities as banks, that the Supreme Court would side with the provinces as had been the case with the House of Lords decision which had forced Ottawa to come up with the federal insurance legislation of 1932.

I confess that I longed for the big banks to indulge their happy combination of arrogance and ignorance and challenge provincial jurisdiction vis-a-vis bank insurance activity. They did so in B.C. but in a case which did not really focus on the core jurisdictional/regulatory issue -- and won. Then, bless their high-priced 'legal experts', the big banks made the fundamental error (in an Alberta case) I had awaited for years involving a clear cut question of provincial jurisdiction: the Canadian Western Bank v. Alberta. Much to the surprise of many pro-federal power and pro-bank 'experts' the 2007 decision of the Supreme Court was a victory for the provinces.

Mr. Flaherty at least has apparently noted the provinces' jurisdictional victory in the Alberta case and is seeking a Supreme Court opinion on the securities issue. In this he is being opposed by none other than Alberta and by Quebec. It's all very well for the federal spin in this mater to rabbit on and on about how Canada, today's model for the western world on how to operate a financial system safely, needs to complete this state of regulatory perfection with a national securities regulator.

It is an appealing argument in some quarters but ignores certain realities involving provincial powers already so recently decided by the Supreme Court of Canada (SCC) in the Western Bank (CWB) case.

Here are, for example, two excerpts from the 2007 SCC decision which are relevant to federal legislation governing securities as financial services or an activity (as distinct from the structure of a federal securities commission):

1. The SCC decision said that the CWB "cannot plausibly argue that the banks are immune from provincial laws of general application in relation to any financial service, as this would not only render inapplicable elements of the Insurance Act but potentially render inapplicable provincial laws relating to mortgages, securities and many other services as well".[paragraph 65]

2. The SCC made it clear that "banks are not exempt from provincial law ... it was held by the Quebec Superior Court that a bank is subject to provincial securities laws. Accordingly, the mere fact that the banks now participate in the promotion of insurance does not change the essential nature of the insurance activity, which remains a matter generally falling within provincial jurisdiction". [paragraph 81]

In the absence of provincial securities legislation the federal government might have a case. However, if the federal securities law or related regulation proposed by Minister Flaherty is made applicable to the segregated fund contracts [i.e., annuity policies] of insurers governed by existing provincial insurance laws (provided the guarantee in the seg fund policy is 75% or more) then the provinces have a strong case. (Doubtless the bank-owned life insurance companies will want seg funds to be overseen by a federal securities regulator.)

If those provinces opting for a federal/national securities regulator wanted to continue to have securities authority over individual segregated fund annuity policies with a guarantee less than 75% or over group seg fund contracts, they would need a provincial securities law. Consequently there would not be an absence of provincial securities legislation in these provinces. In such circumstances the federal government's case would be extremely weak. The same would be true if provincial securities legislation were kept for the licensing of securities representatives at the provincial level.

While I do not have quite the same strength of opinion in this federal vs provincial securities matter as I did with the issue of provincial jusrisdiction involving insurance decided in the Western Bank case, I think it would be unwise to bet the ranch on a federal victory in the reference to the Supreme Court. Indeed I would go further: an SCC endorsement of Ottawa's view of the creation of a national securities regulator vis-a-vis provincial government authority is very, very far from a dead bang certainty.

And do not be misled by reports in this instance, as so many were in the insurance case appealed to the Supreme Court, by media reports of what 'most experts' think. When it comes to financial services matters the so-called experts have been wrong or just plain blind too much of the time -- since before the onset of the west's financial system crisis.

This crisis is the same event now being cited by Ottawa as a reason to challenge provincial authority in securities regulation. But there is a delightful little inconsistency in the feds' argument in this matter: Ottawa prides itself on how well Canada's wonderfully regulated financial system came through the crisis in comparison with the U.S. -- and as I have noted frequently OSFI, the Office of the Superintendent of Financial Institutions, did a great job. But Canada didn't have a national securities regulator while the Americans did.

But let's not spend time picking nits.


by Alastair Rickard



Saturday, April 16, 2011

(No.146) Pt.3 of Las Vegas travel tips

In Parts 1 & 2 of this series of columns presenting some "Las Vegas travel tips" (column No. 144 posted April 9, 2011; column No.145 posted April 13.2011) we offered some tips on visiting Las Vegas based on the experiences my wife Pat and I have had. What follows is the third and final column in this series.


In terms of buying tickets to attend any of the shows which are part of the very large range of entertainment staged in Las Vegas we have had the best results in terms of both quality of seats and their price by NOT buying in advance of arriving in the city. Rather we have in the main waited until after we arrive in Las Vegas and then going that day or the next to the box offices in the hotels in which the shows we want to attend are being performed. You benefit from not only seeing a complete seating chart for the theatre or showroom but from speaking with a knowedgeable ticket clerk about the quality of this or that seat and about whether or not a seat at a price of $X+1 is really any better than one priced at $X-1.

Also, at a box office you can and should ask about whether or not there is any discount available on the ticket price (don't count on being told if you don't ask). Even with the Cirque du Soleil shows which don't normally allocate tickets to the 'same day as performance' ticket discounters in Las Vegas, there are often discounts available from the Cirque show box offices. We have received several.

For example: we obtained a discount on tickets to the Cirque's "O" production, a show we wanted to revisit. We asked the box office person if there was a discount available? She hesitated and then replied sotto voce (as if disclosing nuclear secrets to us) that there was a 25% discount available on tickets to the second show of the evening we wished to attend but not to the first show of the same evening. The second show was fine with us as was the 25% discount.

Another point about picking seats and their sight lines: unlike the older traditional showrooms featuring booths and multi-seat tables at hotels such as the Flamingo, Bally's, the Imperial Palace and Harrah's, the big new hotel theatres playing Cirque shows or Broadway type shows are designed so the seating terraces are high enough to preclude having someone's head obscuring your line of sight to the stage. Hence there is little advantage to sitting close to the stage; indeed for the Cirque shows in which much of the action takes place above the stage itself, sitting too close can actually diminish one's viewing pleasure.

There are seven different Cirque du Soleil shows playing permanently at seven different hotel theatres on the Las Vegas Strip:
1. "O" at the Bellagio
2. "Ka" at the MGM Grand
3. "Mystere" at Treasure Island
4. "LOVE" [the Beatles show] at the Mirage
5. "Viva ELVIS" at Aria
6. "CRISS ANGEL Believe" at the Luxor
7. "Zumanity" at New York New York

Pat, who is a major fan of Cirque du Soleil productions, rates "O" and "Ka" as the best of the bunch, followed closely by "LOVE". There is a Cirque-type show at the Wynn called Le Reve, good but not quite up to "O" and "Ka" by Pat's standards. Our ratings of these and other Vegas shows including the new "ELVIS" show were covered in previous columns and are posted on "Elvis: Stumbling back to Las Vegas" (column No.72 posted Jan.7,2010); "RickardsRead ratings of Las Vegas shows" (column No.73 posted Jan.12,2010).

There are several high standard Vegas productions of Broadway shows:
1. "Phantom of the Opera" at the Venetian
2. "Jersey Boys" at the Palazzo
3. "Lion King" at Mandalay Bay

There are a variety of long running 'name' shows of one sort or another. For example:
1. Donny and Marie Osmond at the Flamingo; very polished, professional,energetic and well-received by the audience.
2. Celine Dion left Vegas after a 5 year run at Caesar's Palace. Now she's back again performing in Caesar's huge theatre for another extended engagement. Most people know whether they like Celine or not; there is big demand for and high prices of tickets to her show.
3. The Blue Man Group at the Venetian is an established show with a record of success with many audiences, including Pat (for reasons which largely escape me).
4. Human Nature is a successful Australian vocal quartet that has become a very highly rated show by Vegas audiences doing Motown hits at the Imperial Palace. These Aussies elicit an amazingly positive response from their audience.
5. Jubilee at Bally's is the last of what were once fairly common in Vegas entertainment: Paris-type stage shows featuring beautiful, skimpily dressed dancers and various variety type acts. It certainly reminded us of the shows we have attended which still light up the night in Paris at the Lido and the Moulin Rouge -- but Jubilee is on a smaller scale.

If there is any place in North America that can be said to be the natural habitat of the 'tribute' group or artist, it would have to be Las Vegas. The city probably has more Elvis impersonators working, including those on the Strip posing for pictures with passersby, than anywhere on earth. Harrah's showroom presents a show of tribute artists called Legends. The 'tribute' performers change from time to time. This show was formerly next door on the Strip at the Imperial Palace.

Tribute bands of course vary widely in the degree to which their musical talents allow or handicap them in replicating the vocal stylings and sound of those they are imitating. There is a Beatles tribute band at the Saxe Theatre which is excellent and recently we saw a Queen tribute band called "Queen Nation" which was in Vegas for a 2 night engagement at the Hilton. They were excellent and apparently perform often in the city.

There are a great many more entertainment possibilities to be had in Vegas: some are extended engagements while others are for a night or two only. Before going to Las Vegas the visitor can check who is playing on and then pick up its widely available printed Guide once you are in the city. For excellent up-to-date daily information the newspaper in Las Vegas, the Review-Journal, is enclosed every day in a 4 page "Daily Visitor Guide". Both are of great value in knowing what is on, where, at what times and with what ticket prices.



by Alastair Rickard



access to previous columns on

Any of the previous columns posted to (they are numbered consecutively and begin in Dec.2008) can be accessed by going to

In the left margin (positioned beside each column) are shown the years during which the columns have been posted as well as the months of the current year in which columns have been posted.

To access a particular column -- click on the year (if not the current year), then on the month and then the particular column.


Wednesday, April 13, 2011

(No.145) Pt.2 of Las Vegas travel tips

In Part 1 of this series of columns presenting some "Las Vegas travel tips" (column No.144 on, posted April 9,2011) we offered some tips on visiting Las Vegas based on the experiences my wife Pat and I have had. This column is a continuation.

"What happens in Vegas stays in Vegas", the marketing slogan for Las Vegas tourism, is merely a trope, a device to imply secrecy for 'naughty' activity while the punter is away from home. But to the extent that it is anchored in at least a modest slice of reality, "what happens in Vegas" is most likely to have happened on 'the Strip'.

What is commonly referred to as the Las Vegas 'Strip' or merely 'the Strip' is actually Las Vegas Boulevard which, for practical purposes of interest to a visitor, runs for 7.2 kms north from the McCarran airport (not far from the runways of which are several hotels) to the actual city of Las Vegas, up to the 'old' Las Vegas symbolized these days for visitors by the covered Fremont Street.

The Strip is actually outside the city of Las Vegas proper and the process of it becoming what it is today began in the late 1940s when the gangster Bugsy Siegel used mob money to build the original Flamingo Hotel, a much later and larger version of which still stands complete with a plaque recognizing Bugsy's founding role.

Fronting on both sides of the Strip are 30+ mostly quite large hotels, from the Mandalay Bay in the south to the Stratosphere in the north. Collectively they cater to every imaginable taste and budget: from architecturally garish (Caesar's Palace) to the ultra-modern in appearance (the Wynn); from the high end market (Encore) to the large but lower end (Imperial Palace); from the theme hotel (Treasure Island) to the non-casino hotel (Trump).

Unless visitors to the Strip intend to spend alot of time in their rooms and within the confines of their hotels, two important factors in picking a hotel in which to stay on the Strip are location and room price.

Most of the hotels on the Strip are owned and operated by one or other of two big companies. As a visitor to Las Vegas you are always free to visit, tour, dine, visit attractions or attend entertainment at any of them. A centrally located hotel on the Strip provides a more convenient 'home base' for the visitor to use for moving around by foot or otherwise, far easier than staying for example at either end of the Strip.

The busiest crossroads on the Strip are the points at which Flamingo Road crosses Las Vegas Boulevard (the Strip) followed by the intersection of Sands/Twain Ave. from the east of the Strip and Spring Mountain Road from the west. So heavy is the pedestrian and auto traffic at these points that to facilitate both types of traffic and defend one from the other the pedestrian at these intersections can only cross in any direction using elevated crosswalks.

In our experience the best central location on the strip in terms of walking either north or south or making use of the monorail is a hotel on or very near the intersection of the Strip and Flamingo Road. The four corners are occupied by four major hotels (with others very near): the Bellagio, Caesar's Palace, Bally's and the Flamingo (although the fourth corner is actually occupied by a much smaller hotel/casino called Bill's Gamblin' Hall & Saloon, beside which is the Flamingo).

Because of the combination of advantageous location, competitive room prices and better than adequate in-hotel facilities we have become regular customers of the Flamingo. It also retains a unique feature: a garden and pool area shielded from the noise and traffic on the Strip by the hotel itself. It is populated by pink flamingoes and other wildlife. Visitors can request a room overlooking this area -- and we do.

Traffic on the Strip is heavy at the best of times. Taxis, while readily available at the hotels, can be expensive especially if caught up in heavy traffic taking you from one part of the Strip to another. Walking to a show at another hotel is often a much easier and quicker way to reach your destination -- hence the relevance for visitors of convenience of hotel location (as well as room price) to those who intend to be moving up and down the Strip.

Another factor to consider is whether or not your hotel has direct access or indeed any access to the Las Vegas monorail. It is a curious, privately built modern system which runs north-south ONLY on the east side of the Strip behind the hotels located on the east side, in some cases a considerable distance behind. The monorail runs from the MGM Grand in the south only as far north as the Sahara Hotel. The original version of the Sahara, the sixth of the Strip hotels, was built ca. 1952 not long after the opening of the Flamingo; it's closing has been announced for May 16, 2011.

The reality of the monorail system is that only a few hotels on the east side of the Strip have their own stations. To use the monorail to reach any of the other hotels, especially on the west side of the Strip, requires a considerable amount of walking -- often far more than it takes to walk to that hotel from a centrally located hotel on the Strip.

Those hotels on the east side of the Strip with their own monorail stations are the MGM Grand, Bally's (which also provides fairly easy access to the adjacent and connected Paris hotel), the Flamingo, Harrah's/Imperial Palace and the Hilton (although the Hilton, located beside the Las Vegas Convention Centre on Paradise Road, does not actually front on the Strip).

While you can ride the monorail and get off at any station and walk to any hotel, the distance -- depending on the hotel -- can be daunting. Among the hotels with their own stations, those with the best[shortest] access are the MGM Grand, Flamingo and the Hilton although the others with their own stations are still fairly convenient in terms of distance to the station from within the hotel.

With these qualifications we can say that the monorail is a clean, efficient, safe and automated system (no drivers) which runs every few minutes in both directions ($5 per trip or passes for 1 or 3 days, all available from ticket machines; 3 day pass @ $26). To travel from, say, the Flamingo to one of the attractions or theatres at the MGM Grand or in the other direction to the Hilton is ease itself, only a matter of a few minutes lobby to lobby; great service at a reasonable price (comparatively).

If on the other hand you are staying at, say, the MGM Grand and are going to a performance of "Le Reve" at a theatre in the Wynn hotel or "Jersey Boys" at the Palazzo and you want to use the monorail, you will ride north only as far as the station serving the Imperial Palace and Harrah's, then walk from back to front all the way through one or other of these hotels and their casinos out to the Strip and then walk north along the Strip to Wynn or the Palazzo.

If you like walking and leave plenty of time to arrive before the show starts, fine. But understand that it will be a far longer process than, for example, walking from the Flamingo or Harrah's for example up the Strip to Wynn. Easy access to the monorail (or the lack of it) is another factor to consider in connection with choosing a hotel/location on the Strip when planning a trip to Las Vegas.

There is also public transportation on the Strip in the form of a bus route nicknamed "the Deuce" (so called because the bus fare was originally $2; it is now at least $3). The buses run up and down the Strip stopping at designated points to pick up passengers. As transportation the Deuce is often neither timely nor convenient. So many Vegas visitors wait at its stops in order to ride up and down the Strip for sightseeing purposes that the buses are often too full to board and therefore one waits to see if the next bus or the one after that has space to board.

As with other aspects of taking a trip to Las Vegas, do your homework on hotels and their locations. For this purpose, among others, the best of the many guides to Las Vegas we have looked at is one of the "Unofficial Guide" series: the latest annual edition of The Unofficial Guide to Las Vegas by Bob Sehlinger.


by Alastair Rickard



for previous columns: links are provided in the margin of every column posted on

Saturday, April 9, 2011

(No.144) Las Vegas travel tips: Pt.1

My wife Pat and I were dining in a very pleasant setting beside a fountain at the Dal Toro Ristorante in front of the Palazzo Hotel on Las Vegas Blvd, the famous Vegas 'Strip'. On the table was an attractive little glass vase with several sprigs of flowers resting in water covering a bed of coloured pebbles.

I commented on their delicate attractiveness whereupon Pat informed me that the flowers I was admiring weren't real and the water was a clear polymer -- and of course on closer examination I discovered she was right. In other words the arrangement I had admired was like Las Vegas itself: verisimilitude on one level but, on closer examination, a certain unreality.

That condition does not interfere with enjoyment of one of the world's most famous tourist cities --- depending on one's expectations. We have often been asked by friends why we go from time to time to Las Vegas, Nevada. It is a fair question especially since we don't gamble. A common assumption is that gambling is the only or the major reason to visit 'Vegas'. It is for some people but not for others.

Vegas is sometimes referred to as the live entertainment capital of the world. That description is only mild hyperbole -- if that. In the dozens of hotels and clubs on the Las Vegas 'Strip' is offered an amazing range of entertainment: from Cirque du Soleil and broadway shows staged in large, luxurious purpose-built theatres attached to the major hotels to lounge entertainment and everything in between.

We go to Vegas to be entertained and to immerse ourselves in a place that is, in the proper sense of that much misused word, unique. It is a massive and garish monument to and embodiment of excess -- and fascinating for all that.

While we claim no status as experts on Las Vegas we have accumulated several tips for visitors based on our experience, some of which do not appear in the travel guides. In this and future columns we offer them for the consideration of followers of


For those seriously allergic to or whose green sensibilities are offended by second hand smoke or the mere sight of people enjoying smoking, the best advice is to stay away from Las Vegas. Although there is a ban on smoking in the usual places like theatres and restaurants the casinos are still exempt because their proprietors successfully argued that it would interfere with the attracting of gamblers who are also smokers and who like to indulge their habit while playing the slot machines -- and indeed one sees such people commonly.

In Vegas one customarily has to walk through a hotel's casino to get anywhere -- things are deliberately set up that way, hence exposure to smokers. The extent of public smoking in bars and hotels and on the street will doubtless shock the sensibilities of those who think such socially unacceptable pleasure has been banned everywhere in North America -- NOT in Las Vegas.

Las Vegas is chock-a-block with restuarants. Many seem to to be charging grossly excessive prices for mediocre food pretentiously promoted and presented. 'Name' chefs are well represented by branded eateries.

The famous Las Vegas buffet is indeed still a commonplace. As one who enjoys a good buffet my experience has been that the Vegas variety range from the superb (for example, at the Bellagio and Aria hotels) to buffets struggling to achieve mediocrity (e.g., Harrah's). The price of a buffet meal ranges from the Bellagio's $40 per head for weekend dinner (for which there always seems to be a long line of customers waiting for admission) to less than half that price for dinner and even less for lunch and less again for breakfast.

You can get a quite decent buffet lunch or dinner for less than half the Bellagio's inflated price at a number of the 30+ hotels that front on the Vegas Strip (i.e., on Las Vegas Boulevard). One lunch buffet example, not on the Strip per se but close and with its own monorail station, is the Hilton. For still less expensive fare visitors will find that food courts in hotels are becoming more common.

If the visitor to Vegas is interested in restaurant dining that offers well prepared food at a (comparatively) reasonable price, there are many choices. One place we enjoy visiting is on the Strip located just inside one of the main entrances to the Paris hotel -- Mon Ami Gabi. It has a very popular patio facing the Bellagio's 'dancing waters' display; there is usually a waiting list for a table. However dining inside is enjoyable and the menu, while pretending to ape that of a Paris cafe (Mon Ami Gabi is one of a small American chain), is for us more enjoyable.

[To be continued]

by Alastair Rickard