My friends at VegasTripping.com nailed a big story and this time they got it before it was reported in either of the big Vegas newspapers.
Nice work Chuck.
Oh, and by the way, The Sahara is closing May 16th.
Las Vegas Sun
Categories: Business of Gaming, Las Vegas Strip
Great job, Chuck.
Too bad, MSM.
Our Vegas Gang podcast #13 has some prescient stuff about Nazarian's original plan (from the 5:40 minute mark - 18:45 minute mark).
No question this took me by surprise. When Chuck posted his news, I made a post noting a TON of reasons why I thought the announcement was a Strat-style remodel. (Plus, hotels have rarely made a big deal of a closure announcement unless it involves implosion or similar). I figured Chuck was just rolling the dice: If the announcement was closure, he gets credit for being the first. I he ends up wrong, he can always go "ooops".
I'm not surprised that the local papers waited until the official announcement. I am very surprised that Norm Clarke and Robin Leach were silent. I learned second-hand in December that Leach said (definitively) that the hotel would be closing. Leach's silence led me to believe that a closure was not in the plans. He loves to be the first on stuff. He might be so wrapped up in Celine right now that this fell into the "who cares" category (in his book).
The other thing I overlooked is this: SBE wants to turn it into a boutique hotel. This ruled out a Strat-style makeover. They weren't interested in getting $20 more a night for selected rooms. Nazarian is sticking with his original vision or forget about it. What I'd like to see happen? Somebody buys it down the road and it remains The Sahara.
We're going to swing by there tonight on our way downtown (March Madness, KC Twins -- YouTube them, shrimp cocktail, full pay VP, party pits on the first really warm day of the year). Be interesting to see how much action -- or lack of it -- The Sahara has on what should be a super busy March Madness/Spring Break evening.
When I look at a map of the North Strip, I wonder what will happen in the next decade, and what it means to the long term viability of Las Vegas. Does the Strip now effectively end at Wynn/Encore with no future development in our lifetimes?
On the East side of the Strip:
*Royal Resort (abandoned proposal)
*Triple Five Resort ( site of old La Concha)
On the West side of the Strip:
*MGM future development land all the way north to Sahara.
How can Riviera and Circus Circus survive when they are the only open properties in the area? Will they follow Sahara into closure?
What will Barry Sternlicht do to Riviera? Can he keep it open?
So much for Steve Wynn's plan for Wynn/Encore to spur new life for everything north.
With the Sternlicht/Stevens purchase, the Riviera gets at the very least some breathing room. They've run some numbers and think that the resort can be viable, in the short term at least, in the current market. Long term, if things don't improve, they'll be in the same boat.
Circus Circus has MGM to fall back on, and appears to be generating cash for the company without needing too much re-investment. If things get really dire, maybe Circus Circus Manor closes, but I don't see any reason that MGM would close the property itself. It fills a market segment that the other properties in MGM's portfolio don't. And someday when the economy turns around, the Manor and RV park can be JV developed, if not with Kerzner then with someone else. In the meantime, they'll take the cash flow the property throws off.
At this point, I'd say the places that have something to worry about are:
The first three are all small properties not on the Strip itself. I don't have numbers for any of them, but it doesn't take a genius to figure out that they're going to suffer the same pressures as the Sahara.
The Hilton is a tough one; with the decline in convention numbers and spending it's been really hurt, and its corporate parents Colony Capital's already lost one AC casino (Resorts) and is in the process of losing the AC Hilton.
Why am I not suprised? The Sun is pretty good, but even it has problems covering local news properly. Our news media just have serious problems.
Kudos to Chuck for getting the story early.
"Does the Strip now effectively end at Wynn/Encore with no future development in our lifetimes?"
I wouldn't go that far, but I do suspect we won't see any new development on The North Strip for at least another 5 years, maybe for the rest of the decade. It's really become a "no man's land" in that it isn't seen as a "desirable location", and unfortunately the failures of Echelon and F-bleau have caused a domino effect in making The North Strip look like the cemetery of slain casinos it is today.
Circus Circus can survive because it's an MGM casino, and because Dr. Dave correctly noted that it serves a niche (low rollers and cheapo families with little ones) that would otherwise go completely unserved by MGM.
The Riviera, OTOH, is in a tougher position.
Btw, another interesting question that arises from this news: What happens to the monorail? Seriously, do any of you still use it? The last time I used it was early 2009, when I stayed at Encore and was in the midst of buying my condo.
Ever since then, I haven't had reason to use it. And now that RTC has The Strip/Downtown Express that goes all the way Downtown, IMHO the monorail looks increasingly pointless. And now that The Sahara, the monorail's northernmost stop, is closing, what now? Is there still reason to use it?
I used it last trip, my guess is it still runs and may even drop at the Sahara station, the station itself has access to the street, but considering they seem to require guests to get off at each end, I'd have to believe they might still require them to get off and then get back on, although it would be stupid and potentially dangerous.
I used the monorail last summer when we stayed at the Trop and had a wedding to attend on the North strip... we honestly wish we would have invested in a pass because we did more walking on that trip than on any of our other Vegas trips because we tend to favor center-strip for buying drinks, walking, etc.
We saw a few people on the monorail, but it wasn't as busy as in the past few years. The Sahara on the other hand, was pretty packed. Guessing mostly locals?
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