THE FUTURE OF VEGAS
Sin City has been on an incredible streak of success in recent years. Some Wall Street investment bankers have described it as everything from “red-hot” to “explosive” and “on fire.” But between now and 2011 Vegas will add another 45,000 hotel rooms – and that’s caused the stock market gurus to take a pause and check to see if our gigantic growth will continue to rocket at stratospheric speeds! With new rooms coming on line at Sheldon Adelson’s 3,300 all-suite Palazzo–set for a Dec 20 soft opening–
Steve Wynn’s quickly following Encore expansion with its 2,800 rooms all eyes will be focused on Vegas occupancy counts! Other new suites and luxury rooms along the Strip include the ginormous 10,400 room MGM City Center project, the four-hotel complex at the Echelon Place about to have its groundbreaking on the old Stardust site, the new Plaza New York Hotel in place of the old Frontier, the re-developed Circus Circus property, the new Fountainbleau and Atlantis properties and new towers earmarked at the Hard Rock and the Sahara. In addition there’s a slew of condo-apartment and timeshare projects all set. Donald Trump opens his twin- condo-towers across from Steve Wynn. The Cosmopolitan will open between the Bellagio and City Center, the Planet Hollywood Towers from Westgate along with even more. To go with that massive development will be a slew of other attractions including Harrah’s ambitious plans for a NHL and NBA stadium arena, the new monstrous 41,000 sq ft Hard Rock Café flagship with three-floors of dining spaces, a giant gift-shop and a 1,370-seat theater right on the Strip opposite City Center, an outdoor skating rink on the north east side of the Strip and who knows what else! Even convention and meeting space is expected to grow from 9.5 mm sq ft to 12.5mm sq ft over the same time period.
The Wall Street gurus descended on Vegas for 48-hours of intensive investigations last week and now in reporting back they still give us a massive and positive “thumbs up.” They stated that every hotel property understands the magnitude of the challenge filling the additional capacity and “its resoundingly optimistic” – with visitors and convention attendees growing comfortably to fill the additions. The general verdict is that 2008 is shaping up nicely – and all the major conventions are returning. Vegas will still be considered a “value play” with meeting planners around the world. Joseph Greff from Bear Stearns told his clients that our airport infrastructure was a major topic of conversation and that our Convention and Visitors Authority is bringing new airlines to Vegas and increasing airline capacity from international locations. “The Strip is performing solidly and our belief has been reinforced by our recent room rate surveys. This summer has been one of the better ones in recent years,” he said. The banker is high on “out-performs” with MGM, pointing out the recent desire by the Sheiks of oil-rich Dubai to take a multi-billion-dollar stake in the company, Boyd Gaming and the LV Sands Corp, parent of the Venetian and Palazzo. He pointed out that at its Macau properties, The Sands has its first major convention there in October and is launching its own two new ferries in November and a further eight ferries in early 2008 to meet their incredible customer demand. Back here he says The Venetian has strong group business booked right through the Palazzo’s mall-shop opening in January with solid overall trends moving further out. Sheldon Adelson’s company is also bidding on a new Kansas City casino license with a $500-million planned investment for a 300 to 1000 room hotel serving up to 5,000 slots and 200 table games.
In fact the only concern the New York wizards had about the Vegas silver lining shining brightly was over the possibility that the State of Nevada would try to tax the casinos further to build up additional funding for education – but in the end they felt any vote on a ballot to raise gaming taxes would not pass and if it did happen it would be too small to affect current Strip property earnings! Coincidentally tomorrow (THURS) marks World Tourism Day and our travel titan LVCVA President Rossi Ralenkotter will meet in Washington DC at the Travel Leadership Summit. He commented: “Travel is fifth ranked as an industry in America employing 7.5 million and generation $109 billion in tax revenues. It’s vital in Southern Nevada where our nearly 39 million annual visitors contributed $.4 billion in economic impact. Between now and 2015 those visitor-paid room-taxes will generate more than $2 billion going directly back into the community for local government services.”
Overall Wall Street says “everything continues to come up roses” for Vegas and the good-times aren’t going sour for a long time to come!