Just when you thought hotel development couldn’t gain any more momentum in Nevada’s gaming destinations, it has. A new generation of spectacular properties is on the way, promising to bring more choices—and availability—for meetings.
Leading the surge is Las Vegas, a city where average hotel occupancies are running 10 percentage points higher than those in any other U.S. city. However, Las Vegas also has over 40,000 new hotel rooms in the pipeline, more than twice that of any other destination in the U.S.
Included in the $30 billion worth of hotel projects now under way in Las Vegas will be 3.5 million square feet of new meeting and convention space. According to the Las Vegas Convention and Visitors Authority (LVCVA), this year will see a net increase of more than 4,000 new hotel rooms.
So the question arises, how long can supply continue to outpace demand?
A Break for Planners?
While Las Vegas hotels still have the upper hand, industry observers see somewhat better times ahead for planners looking for favorable dates and rates at casino resorts.
“Going forward, as projects begin coming on-line, it will be easier for meeting planners. There will be more supply, more meeting rooms to choose from, and all kinds of possibilities,” says Patrick Ford, president of Lodging Econometrics, a Portsmouth, N.H.-based hotel and real estate consultancy firm.
For the time being, however, Gary Schirmacher, CMP, senior vice president-western region for the meeting planning firm Experient, says that Vegas is still definitely a seller’s market and that large groups “are being forced to book further out to secure prime dates and space.”
Another option is to book meetings during the summer, traditionally a slower time for Las Vegas. According to Schirmacher, Experient had several corporate clients hold their meetings in Las Vegas this past summer.
“It’s becoming more common for groups to consider summer dates because of challenges with availability in the spring and fall,” he says. “Planners have to find ways to make their meetings look good and highlight the value to hotels. Know your meeting and the incremental revenue opportunities it has for the hotel.”
However, he is also seeing hotels willing to take bookings three years out.
“In the past, hotels have been reluctant to make that type of commitment,” he says. “They might have only gone out one or two years. The hotel community realizes there will be significant additional competition with more rooms and meeting and convention space coming into the market.”
While the coming increase in hotel rooms could loosen up things a bit for meetings, some analysts are confident that Las Vegas will absorb the new supply.
“There have been skeptics all along, but Las Vegas has proven itself over time,” says Brian Gordon, principal at Applied Analysis, a Las Vegas-based research firm. “It will take a significant number of visitors to fill the new rooms, but supply can create its own demand, and that’s somewhat relevant here. Vegas is unique and ever-changing, and has some of the world’s most creative development.”
He points out how quickly visitors flocked to the last new wave of mega resorts—Bellagio, Paris, Venetian, and Mandalay Bay—all within a few years in the late 1990s and early this century.
Prepping for the Deluge
The LVCVA began planning several years ago for the inventory increase and to preserve Vegas’ position as the country’s top convention city.
It established the goal of increasing meetings, conventions and trade show visitors from 15 percent of total visitors to 20 percent by 2010.
An emphasis was placed on smaller corporate and other business meetings, a segment that accounts for two-thirds of its 20,000-plus annual meetings each year. In June 2006 it launched “Hero,” an advertising campaign, promoting the LVCVA as a one-stop shop for meeting planners.
The city also continues to invest heavily in its main convention facility. Construction is starting this month on an $890 million expansion and makeover for the Las Vegas Convention Center, scheduled for completion by late 2010. Work on the main building will include facility upgrading, a new lobby and a new concourse of breakout rooms providing an additional 90,000 square feet of meeting space.
Kevin Bagger, LVCVA’s director of Internet marketing and research, says the percentage of meetings and convention group visitors is now hovering around 16 percent to 17 percent of total visitors, and the destination is on track to make its target of 43 million visitors by 2010.
“We have good numbers. The ADR (average daily rate) is strong. Visitor expenditures continue to increase, and visitor satisfaction remains incredibly high,” he says.
Harrah’s on the Move
Harrah’s Entertainment has joined the high stakes game of high-end expansion in Las Vegas. In July, the company announced a $1 billion expansion to Caesars Palace that will include a sixth tower with 665 rooms and a new 263,000-square-foot convention center slated to open in early 2009.
“The expansion shows our growing commitment to the meetings and convention market,” says Michael Massari, vice president of meeting sales and operations for Las Vegas Meetings by Harrah’s Entertainment.
And despite high Vegas occupancies, Massari says that, with all the new facilities under way, “competition continues to escalate for Vegas meeting and convention business. To compete, you have to have the best product and the best services.”
Since its merger with Caesars Entertainment in 2005, Harrah’s has become more aggressive in its pursuit of meetings business. It launched Las Vegas Meetings by Harrah’s Entertainment, a one-stop shop for planners encompassing six of its properties: Bally’s Las Vegas, Caesars Palace, Flamingo Las Vegas, Harrah’s Las Vegas, Paris Las Vegas, and Rio All-Suite Hotel & Casino. Together, the properties offer 1 million square feet of meeting space and almost 18,000 guest rooms and suites.
“It’s been hugely successful, a real paradigm shift. It has made the job of the meeting planner easier. We’re glad we did it,” Massari says.
Under the program, planners have the advantage of one contract and one master bill and can use any combination of facilities and amenities at the six properties.
More Megas
The largest new resort project under way is Las Vegas Sands’ 3,025-suite Palazzo Resort-Hotel-Casino, opening Dec. 20. It will be the first new mega property on the Las Vegas Strip since the 2005 debut of the 2,700-room Wynn Las Vegas, considered to be the harbinger of the current construction boom.
The $1.8 billion Palazzo will add 450,000 square feet of meeting space to the city’s inventory. According to an announcement from Las Vegas Sands, the Palazzo, together with the adjacent Venetian and Sands Expo, will comprise the world’s largest integrated destination resort, offering 7,128 hotel rooms and 2.3 million square feet of meeting space.
Slated to open in early 2009, the $2.2 billion Encore at Wynn Las Vegas on 20 acres adjacent to the Wynn will include a 2,034 all-suite hotel tower and 100,000 square feet of meeting space.
MGM Mirage is projecting a fall 2009 opening for its $7.4 billion, 76-acre CityCenter. Located between the Bellagio and Monte Carlo, it will include 300,000 square feet of meeting space and 550,000 square feet of retail, dining and entertainment. Hotels will include a 4,000-room, 61-story casino resort; the 1,543-unit Vdara condo-hotel and two 400-room hotels, the Harmon Hotel & Residences and Mandarin Oriental Hotel & Residences.
Boyd Gaming broke ground in June on the $4.8 billion, 87-acre Echelon Place on the site of the 1,552-room Stardust.
Scheduled to open in fall 2010, it will include more than 5,000 rooms in five hotels, including the Shangri-La Las Vegas, Delano, Mondrian, and Hotel Echelon. There will also be over 750,000 square feet of meeting and convention space, including the 650,000-square-foot Meeting Center.
The $2.9 billion, 25-acre Fontainebleau Las Vegas, which broke ground in February, is slated to open in fall 2009 near the Las Vegas Convention Center. It will feature a 63-story, 3,889-room resort, a casino, a 3,200-seat theater, and meeting space.
Wedged between Bellagio and CityCenter, 3700 Associates’ $1.8 billion Cosmopolitan Resort and Casino is expected to open in 2010. Its Grand Hyatt Las Vegas will have almost 3,000 units and 150,000 square feet of meeting space.
The 64-story Trump International Hotel and Tower is scheduled to open early next year. The $500 million property will feature 1,282 hotel and condo units, a spa, restaurants, and meeting rooms.
Makeover Magic
Part of Las Vegas’ current transformation is happening through renovation and expansion.
In April, following an 18-month remodeling, the former Aladdin officially became Planet Hollywood Resort and Casino, a Sheraton hotel. It has 2,567 renovated movie-themed rooms; a new lobby and casino floor, new restaurants, lounges and nightlife; a renovated 7,000-seat theater; a new 1,500-seat showroom; and more than 75,000 square feet of meeting space.
Work is expected to begin later this year on an expansion of the Hard Rock Hotel & Casino, which was acquired by Morgans Hotel Group. With completion slated for mid-2009, the project includes 950 new rooms, half in an all-suite tower (bringing the total to 1,500), plus 60,000 square feet of meeting and convention space. Meanwhile, renovations to the existing property are expected to be completed by early 2009.
The Venetian will complete a $100 million renovation of 3,014 suites this fall. Caesars Palace will complete the remodeling of all 452 Forum Tower rooms by January.
New Visions
Developers are now focusing on the northern part of the Strip.
The 984-room New Frontier, which opened in 1942, closed in July after being sold to New York-based Elad Group, which is reportedly planning a $5 billion-plus 3,500-room resort project.
The following month, the 1,720-room Sahara Hotel & Casino, dating back 55 years, was sold to Los Angeles-based SBE Entertainment Group. The company announced it would renovate the property, promising a vision “that will change the landscape of the northern Strip.”
Early this year, MGM Mirage acquired additional acreage north of its Circus Circus property. Then in June it announced a 50/50 joint venture with Kerzner International to develop a multibillion-dollar resort at the Strip and Sahara Avenue.
The company also announced it would invest $160 million in The M Resort, a mixed-use project about 10 miles south of the Strip for which site work is under way. The $700 million first phase, slated for a mid-2009 completion, will include 400 rooms, a casino, and a 70,000-square-foot events center.
Meanwhile, Tropicana Hotels and Resorts (formerly Columbia Entertainment) has announced plans to expand and renovate the 1,876-room Tropicana. Plans call for a total of 10,000 rooms in five towers, a new 600,000-square-foot convention facility and a new casino by 2010.
Beyond the Strip
Resorts are opening away from the Strip, providing a different Mojave Desert experience and more meetings options.
Early this year, Station Casinos unveiled 400 new guest rooms at its Red Rock Casino, Resort and Spa, doubling its room count. Opened in April 2006 at the master-planned community of Summerlin west of the Strip, the resort has 94,000 square feet of function space and includes a recently opened 72-lane bowling alley. Adjoining the Red Rock Canyon National Conservation Area, the property is billed as the first billion-dollar off-Strip resort.
In north Las Vegas, Station Casinos broke ground in February on the $600 million, 40-acre Aliante Station. Slated to open last next year, it will include 202 guest rooms, 14,000 square feet of meeting space, a casino, six restaurants, a 700-seat showroom, and a 16-screen Regal movie theater. A second phase will include up to 400 rooms and a bowling center.
Henderson/Lake Las Vegas
Just outside Las Vegas, sprawling Henderson is Nevada’s second-largest city and offers 3,000 hotel rooms.
One-third of the rooms are northeast of downtown Henderson at the master-planned resort community of Lake Las Vegas. It features The Ritz-Carlton, Lake Las Vegas; Intrawest Corp.’s MonteLago Village Resort; and a Loews Lake Las Vegas Resort, formerly a Hyatt. Loews acquired the Hyatt last November and closed its casino.
In spring last year, MonteLago Village, which has 6,000 square feet of meeting space, opened a new property, Luna di Lusso, almost doubling its number of guest units to 300.
Last October, Station Casinos’ Green Valley Ranch Resort, Spa & Casino unveiled a $110 million expansion that included new restaurants and gaming and an additional 14,000 square feet of meeting space.
Reno/Sparks
Across from the Reno-Sparks Convention Center, the 1,000-room Atlantis Casino Resort Spa broke ground in June on a $50 million, 116,000-square-foot expansion. Expected to be completed next spring, the project includes more casino space, an expanded spa and fitness center, and new convention facilities.
The 1,995-room Grand Sierra Resort, the former Reno Hilton, is in the midst of a major expansion. It has new restaurant and lounges, 11 upper level floors of new suites, an upgraded family center, and renovated casino space.
By the end of the year, Peppermill Hotel & Casino will complete a $400 million expansion that includes a 600-room Tuscan-themed all-suite hotel tower, a 62,000-square-foot clear-span convention center, new restaurants, and an expanded casino.
In Sparks, John Ascuaga’s Nugget, which has 110,000 square feet of meeting space, has started a $12 million renovation of its East Tower rooms, with the first rooms to be ready for occupancy late this year.
Lake Tahoe
Stateline on Tahoe’s South Shore is home to four casino hotels that provide the bulk of its meeting space: MontBleu Resort, Casino and Spa; Harvey’s Resort & Casino; Harrah’s Lake Tahoe; and Horizon Casino Resort.
Work began in the summer on Vail Resorts’ $420 million Chateau at Heavenly Village across from Harvey’s on the California side. Overseen by RockResorts International, the $420 million condominium-hotel and convention center will include two condo-hotels totaling 470 rooms, a 50,000-square-foot convention center with a 21,000-square-foot prefunction area, a spa, a park, and retail and restaurant space. Completion is slated for summer 2009.
In May last year, the 440-room Caesars Tahoe, with 16,000 square feet of meeting space, was renamed the MontBleu Resort, Casino and Spa, and has a remodeled casino, new restaurants and a new nightclub.
Laughlin, Primm, and Jean
Set on the Colorado River 90 miles south of Las Vegas, Laughlin has more than 10,000 hotel rooms and 125,000 square feet of meeting space in nine casino resorts.
Last November the 1,907-room Flamingo Laughlin became the Aquarius Casino Resort after new owners American Casino & Entertainment spent $40 million on renovations.
In July, new owner Tropicana Casinos and Resorts rebranded the 1,500-room Ramada Express as the Tropicana Express, following an $11 million renovation.
In April MGM Mirage sold its Primm Valley Resorts in Primm, located south of Las Vegas on the California border, to Herbst Gaming. Now operating under Herbst’s “Terrible” casino brand, the properties, Buffalo Bill’s, Primm Valley and Whiskey Pete’s, together have 2,642 rooms and 62,000 square feet of meeting and exhibit space.
In Jean, 25 miles south of Las Vegas, MGM Mirage closed its 302-room Nevada Landing casino in April, the first step in developing a 166-acre mixed-use project that will feature a new casino hotel. The company is also renovating and expanding casino operations at its nearby 800-room Gold Strike.
