Episode #83 is up!
This time on the show:
- Interview with Derek Stevens, CEO of The D Las Vegas
I'm very happy today to have a post from a guest writer, Paolo Mello.
Many of you will undoubtedly know Paolo from Twitter, where he posts as @paolomello. You'll also find him contributing to comment threads here and at VegasTripping.com where his username is 'middleclassbuzz'.
Paolo is a Nevada native and Vegas expert, currently living in New York City. In this excellent piece, Paolo muses on the future of leadership at Las Vegas gaming companies.
You'll find his text after the jump - enjoy!
Between gambling, food, booze and rooms, I spend a lot of money in Vegas casinos every year and yet I've never had a host that I could call to reward me for my loyalty. As a result, I haven't been shown much... and hey, as a 'journologger' (love making up terms), maybe I shouldn't be seeking that out anyway. I'm not too worried about myself but I definitely see a weakness here. Lets look more closely.
Over the past decade and especially since the Great Recession, we've seen some of the historical institutions of the casino industry remake themselves. These days, gaming revenue makes up only 39% of the average total, a shift from 15 years ago when it was closer to 58%.
What should be the next sacred cow to fall? The casino host.
Ok, maybe 'fall' is not the right way to look at it - how about transform instead? There was a time when the goal of these sales-oriented-sometimes-mercenary employees was simply to get you on property to sit at a slot machine or hit a dice table, plied by free drinks and a couple of comps to the coffee shop. At this point, that's old-style thinking.
Capturing every ounce of revenue from both gaming and non-casino operations should be the goal of every property GM or president. Why is it then that loyalty programs are still mostly gambling centric? How about a new class of 'property hosts', rewarding recurring visitors, not just to the penny slots but to the suites as well? The current system is a relic of a previous age.
Along with revenue diversification should come promotional and loyalty diversitifaction as well. We've seen some of that with new programs designed to highlight the 'leisure spend' dollar - but not nearly enough. Plus, they still charge for crappy Wi-Fi that barely works (no, I'm not gonna stop bitching about that).
Sure, Las Vegas casinos will always need a few high-end hosts to take care of the big players but there's a whole new and emerging market of customers who want to be taken care of for just spending money on stuff outside of the casino: Rooms. Suites. Shows. Clubs. Food. Retail. Better food. Golf.
Free tip: Care about these people, even if they don't gamble. You'll make more money.
If I spend $1,800 on a couple of nights in a suite, why is that worth less than dropping the same amount on Wheel of Fourtune? Sure, you had to pay a housekeeper to clean the room but the marginal cost there is negligable (or at least that's what they taught me in college). Sure, casino dollars may drop fastest to the bottom line but this a newly competitive economy. Money is money is money.
Now, there are definitely properties that have been working to moderninze along these lines, even if they still use the older nomenclature of 'casino host'. The Cosmopolitan, Las Vegas Sands (Venetian & Palazzo) and to some degree Caesars' Total Rewards and MGM, among others, have all started to credit for some non-casino spend.
Great but not enough. Looking at overall spend should be the standard, not a 'revolutionary practice' or half-measure.
This is not new ground to cover. Some Vegas casinos have affiliations with national hotel brands that have this mastered and in some cases allow customers to spend those points in Clark County. Learn from them!!
The traditional marketing strategy of casino-centric hosts is outdated. The sooner it is replaced by something that captures and rewards every dollar coming into the city, the better off the Strip operators will be, serving happier and more loyal customers.
The Miami area has become, over the last few weeks, the most exciting potential casino development in the US. Massachusetts, it seems, has taken a backseat. Las Vegas Sands, Wynn Resorts, and Genting (who own Genting Highlands in Malaysia, Resorts World in Singapore, and are about to open at Aqueduct in New York) are seen as the frontrunners for gaming licenses, with MGM Resorts and Caesars Entertainment circling in the background.
As part of its pitch, Genting has said that it might build the world's biggest casino. But is that going to be the best fit for Miami? Or the best business model? After the jump, I'll compare casino square footage and break it down.
It's time to blow some crap up!
SoV is back. Happy Sunday.
This time around, Jeff explains what's going up in smoke and when. Enjoy.
The word is that Tom McCartney is out as president of Tropicana Las Vegas. Not a lot of details... More to come.
We interviewed McCartney about a year ago at Podcast-a-palooza.
At this week's G2E conference in Las Vegas, birthday boy and MGM CEO Jim Murren gave a keynote that included some thoughts on the future of the company's gaming operations online (along with him openly wondering why the markets don't love his company).
Not a lot of groundbreaking news except for the fact that Murren alluded to new social programs or apps that he described as 'MGM meets Zynga'. Zynga is the popular publisher of Farmville, a Facebook powerhouse. This jives with what we've heard about former Wynn exec Andrew Pascal's new project, IncuBet.
I've said it before and I'll say it again - this is gonna be big time stuff for these gaming companies. My guess as a first foray is something that fits well within existing law - a way to push MGM brands and hmmmMlife through Facebook - some sort of game that lets you either build casinos or pretend to be a high roller. Not all that innovative (it's been done) but this time it will have real gaming brands behind it, which could make all the difference.
Expect more of this. A lot more.
Thanks to Detroit1051 for the tip on the slides being up.
Here's Jeff's latest 'advice' column, this time with thoughts on Monte Carlo, New York New York, MGM Grand, Tropicana, Luxor, Excalibur and Mandalay Bay.
This is the last of the series for The Strip. Read the others here.
So that whole press release from Wynn Macau that strongly implied (if not straight up said) that their Cotai project was moving forward? Yeah, I guess someone forgot to tell the government.
Today in the Macau Daily Times, Secretary for Economy and Finance, Francis Tam Pak Yuen unceremoniously bursts that balloon. His quote?
"Companies may release their news, and the news should correspond to reality. Anyhow these news release won't affect the process"
Despite the fact that local officials seem to be back-pedaling on Wynn's go-go attitude, the piece also goes on to say that it's likely the project will be approved (it was filed before the 2008 cut-off) - it's just a matter of when.
Must be fun doing business in China, huh? If this happened in the US, my guess is that The Steve would be bellowing from the mountaintops about the 'unstable business climate'.
Personally, I can't wait for Cotai construction to start - if it's as magnificent as the principals have been hinting, it will certainly be something to see.
This is SoV #30! Congrats to Jeff on the milestone and thank you to all of you for reading.
Here's Jeff's latest 'advice' column, this time with thoughts on Bellagio, Caesars Palace, Cosmopolitan, Bally's, Aria, Planet Hollywood and Paris.
Sometimes when a nugget or two shakes loose, the next thing you know you've got an avalanche of new info coming in. Thanks to Twitter, Google and some sharp sleuthing from VT super-boss Chuckmonster, some additional details on Andrew Pascal's new social/gaming/tech/entertainment company have come to light.
Meet incuBET (come on guys, spring for the dot-com domain too).
My original thought was that these guys were adding some social elements to existing slot and video-based games - say maybe coming up with new ideas and partnering with an existing device maker like IGT (WagerWorks was sold to IGT and Matthews went on to work there so relationships likely run deep). The sparse incuBET homepage almost makes it sound like they want to inject wagering into 'casual gaming', which is the same code phrase used for games on Facebook, the iPhone and iPad.
Could this be a bigger play than originally thought? Obviously, adding betting to Facebook games wouldn't be legal in the United States under current law... and changing that sounds like a mighty big job... If I was incuBET, I'd at least be thinking about that possibility for the long term, while working under existing law to make slots more appealing to younger gamblers in jurisdictions that allow them.
Will we see something from these guys at G2E? That's only weeks away - time will tell but I'd keep an eye on this group.
The scuttlebutt on Twitter this afternoon is that Andrew Pascal, former COO and President of Wynn Las Vegas and Encore, is working on a new startup focused on 'social gaming'. Indeed, a view of his LinkedIn profile indicates perhaps something along those lines. His venture firm's Facebook page includes links to two upcoming products: QRious (I assume some sort of QR code nonsense) and another called MyVegas (as an aside, 'MyVegas' is also the name of the social networking feature on popular travel Web site VegasTripping.com).
The word is that he's started a new company, including former execs from companies like MGM Resorts. That gaming company has reportedly expressed interest in Pascal's new operation and may be the first to roll out any new products they reveal.
Before his stint at Wynn, Pascal ran wagerworks, a startup devoted to online gaming. Pascal is the nephew of Wynn Resorts director Elaine Wynn.
For a long time I've been saying that younger gamblers are pretty bored by slot machines and features like interactions with Facebook, Twitter, etc... seem overdue. Perhaps this is a move in that direction? I've met Pascal a few times but to say I know him would be massively overstating. Still, my impression is that he's a very smart guy and sees the tech blind spot that a lot of these gaming and hospitality companies have.
What is Pascal working on? If you have any info, email us and let us know. Anonymity guaranteed!
I've realized recently that I'm Vegas homeless. When I think about it, I probably have been for a long time.
What does being 'Vegas homeless' mean? I lack a consistent home base. There's no hotel I can rely on to offer me a great stay and friendly service at a price that's reasonable. I don't have a single casino in which I concentrate my play. There's no one hotel I care about and no one hotel that cares about me.
More after the jump...
I stayed in a new Bellagio room and I'm telling you all about it.
My photos are here: http://photo.ratevegas.com/Other/Bellagio-August-2011/18787622_vpPdgc
The write-up is after the jump.
I stayed in an updated room at The Plaza this past week, just a few days before the official opening. This is my story.
If you want to see my pictures, they're here:
We're back with part three of Jeff Simpson's 'Advice for The Strip' column here at Simpson on Vegas. In this episode, it's the other side of the Center Strip.
Continue after the jump...
We're back with part two of Jeff Simpson's 'Advice for The Strip' column here at Simpson on Vegas. This time around it's Venetian, TI, Mirage, Casino Royale and Harrah's.
Continue after the jump...
This time around, Jeff offers up some free advice to casino owners and operators for some of Las Vegas' most iconic properties.
This is the first in a series.
Continue after the jump...
Ever wondered what might be in the water at pool-clubs like Rehab and Tao Beach? Well, you might be sorry you asked.
The Daily decided to investigate and discovered that just as you might have guessed, some of these places may be a bit less than clean. Urine, 'dissolved solids', etc...
Episode #63 is up!
This time on the show:
* Our Guest is M Resort President Anthony Marnell III
We have a frank discussion on operating in Las Vegas in this climate, nightlife customers vs. casino customers and more. It's a great talk - you'll enjoy it.
** Sure Bets **
Sad news from Jon Ralston that Terry Lanni, the former MGM Mirage boss, has passed away. Lanni had been battling cancer for the past several years. Our thoughts are with his family.
Lanni helped to shepherd the company two through mega-mergers: first with Mirage Resorts and then later, Mandalay Resort Group, creating the most powerful company on The Strip.
His tenure at the head of MGM was not without controversy. A confusing situation regarding his college degrees and the approval of the now-troubled CityCenter project marked the later parts of his career.
I never met Lanni but we did have a mutual friend and the word on Terry was that he was a class act.
More on Lanni:
Episode #62 is up!
Jeff kinda sounds like he was calling from the moon, so sorry about that.
This time on the show:
** Sure Bets **
Will Gary Loveman expand the Caesars empire (ha ha) into the Las Vegas locals market? That's the theory that our intrepid columnist, Mr. Jeff Simpson, is putting forth in this latest edition of SIMPSON ON VEGAS.
Enjoy after the jump and leave your comments to tell us what you think about this possibility.
Now that it's open to the public, I can't say this is a sneak peak, but I know there are a bunch of folks on here who haven't made it down to the big sell-off yet, so I figured I'd post some more pictures taken Thursday, a few hours after the doors opened.
The fun really gets going after the jump.
It's a lazy Saturday afternoon and that seems like a good opportunity to comment on two stories I saw posted today online.
First off is a note from Howard Stutz in the RJ, indicating that the Maloof's ownership stake in The Palms has been reduced from 85% to 2%. George Maloof remains as property president but for all intents and purposes, the family has comparatively very little stake in the business.
In the past, I've heard Maloof referred to as a gaming operations genius (I might even have said something along these lines myself). How could anyone say that now? The guy was forced to sell off virtually all of his ownership to keep the lights on - if you read between the lines, it sounds like there weren't a lot of other options.
Making money in the go-go era of 2005 wasn't all that tough. It's the operators thriving now and through the crisis that deserve respect.
Personally, if I owned a property, I certainly wouldn't want to get Maloofed.
Second up is a VegasTripping post about the room renovation project at Bellagio, including some photos. These changes have been widely anticipated - as one of the top properties in town, Bellagio's room product should set a standard for Las Vegas luxury.
The series starts out with a hallway shot, showing off new wall coverings and carpet. I agree with Chuck that the carpet color tone change is pretty awesome - I totally dig it. From there though, things go a bit downhill as we get into the room itself.
In my opinion, the bed/sleeping area is a bit of a disaster and given the relatively dramatic change, I expect it to be the most controversial part of this re-design. The headboard/wall combo isn't particularly ugly in a vacuum, it just doesn't fit in with what I've come to expect from Bellagio.
The much hated armoire is gone (good riddance!), replaced by what seems to be a functional, if not beautiful substitute. If this was the worst part of the re-design, this crime scene would be pretty uneventful. Given that Bellagio's rooms are smaller than some of its newer competitors, the large armoire never made any sense from a usability perspective.
In general, I like the overall color scheme and as VT notes, the rooms were way overdue for a change. Still, this feels like all reaction and very little new ground being covered. How long until these updates feel old and dated?
Coming up with a room design that fits Bellagio's language and overall message but that also can delight the changing tastes of luxury customers is certainly a challenge but I'm not sure that was even attempted here. What I see is a buffet of recent design choices taken from Bellagio's top competitors. There have been many signs over the years that MGM-folk don't really get what Bellagio is all about - what makes it special. So far, this is looking like it might be another one.
I'm saying these things without having yet stayed in the new rooms. It's possible there are super-secret hidden features that aren't obvious from these photos. Who knows, maybe the bed gives out free blow jobs or something. Absent that, so far I'm leaning towards seeing this as another example of a company that's lost it's way... That said, I'll try 'em for sure.
CityCenter has now been open for about 18 months.
This time around, Jeff looks at how things are going for MGM with their gigantic project.
Landry's Inc. a Houston-based company that owns a full spread of restaurant chains and Downtown Las Vegas and Laughlin's Golden Nuggets, has officially taken ownership of the now-former Trump Marina and will be putting about $100 million into renovating it. Meanwhile, a vaunted plan to allow "mini-casinos" has resulted in exactly zero construction to date. That's exactly what anyone would have predicted when the mini-casino concept was first mooted, and it's a good sign that some operators, at least, see some upside in the market.
First, some history. Steve Wynn's AC Golden Nugget opened in 1980--it was the first Atlantic City casino to be built new from the ground up, not a patch-and-paint job of an existing hotel. Wynn was young, charismatic, and with the help of Frank Sinatra and many others, made the Nugget the Atlantic City casino for high rollers. Wynn was a hero in Atlantic City: one year, he gave all of his managers new cars as bonuses, which made him an absolute legend. But in 1987, frustrated with the regulatory regime, he sold the Golden Nugget to Bally's. If you want to hear a good first-hand account of the change-over, listen to my podcast interview with Roger Gros, who describes the tears shed when Steve left town. The Golden Nugget become Bally's Grand, then The Grand: A Bally's Casino Resort, then the Atlantic City Hilton. [Personal history: My first job inside a casino was working in the Bally's Grand ice cream parlor back in 1989. And I left a ton of quarters in the old Golden Nugget arcade before that. So you could say this was the first casino I spent a substantial amount of time in.]
Across town, Hilton Hotels started building a hotel-casino on the marina in the early 1980s. By 1985, they had it ready to open, with signs installed and matchbooks printed with the Hilton name, when the Casino Control Commission denied the company a license for doing business with Sidney Korshak, a Chicago attorney with reputed mob ties. Donald Trump, who was in the midst of a struggle for control over what became Trump Plaza with Holiday Inn/Harrah's, bought the nearly-finished Hilton and renamed it Trump's Castle. This was both a way for him to expand his casino holdings and for him to strike against Harrah's, whose Harrah's Marina was across the street.
Trump's Castle lasted until 1997, when, after a plan to rebrand it as a Hard Rock casino fell through, it became Trump Marina. For years it was the runt of the Trump Entertainment Resorts litter. Back in 2008 Trump almost sold it for $318 million--it would have become a Margaritaville casino. Landry's paid a cool $38 million and is planning to put $100 million--not the $150 million that was thrown around before the sale became final--into a complete renovation.
So it turns out that, for $138 million, Landry's gets a spiffy "new" casino hotel with about 1,000 rooms, 70 table games, and 2,000 slots (give or take). Considering Encore Beach Club alone cost about $70 million, that seems like a pretty good deal.
And let's compare it to the "mini-casinos" that were supposed to be Atlantic City's savior. I spent a lot of time trying to debunk the idea that the proposed mini-casinos are feasible, let alone will bring the salvation of Atlantic City.
These mini-casinos are limited to 20,000 square feet and can be built with only 200 hotel rooms instead of the previously-required 500. Back in March 2010, when the idea was first floated, I did ran a few cursory numbers and determined that, with casinos that size, the projects would be difficult to keep open if someone waved a magic wand and created them; there was no way that they'd ever be able to pay for their construction. The money just wouldn't be there.
Meanwhile, rumors were flying that certain operators were going to come to town and spend $300 million--no, make that $450 million--on building a mini-casino. In a blog post that would surely make me a modern Nostradamus if I wasn't saying anything that wasn't completely obvious to anyone with a rudimentary knowledge of business and no vested interest in the outcome, I posited a hypothetical scenario: why build a $300 million mini-casino when Trump Marina could be had for $75 million?
This is what I wrote back in 2010:
So instead of starting from scratch and investing $300 million in a new facility with one-quarter of the revenue potential, why not just buy Trump Marina and renovate it-really renovate, almost beyond recognition? Even if you put $100 million into it, you're still saving money, and you've got a much bigger, better-situated...casino with way more potential upside.
As it turns out, that's exactly what Landry's is doing. And we've yet to see ground break on one of the two now-permitted mini-casinos. And, as I said earlier this year when mini-casinos were approved, "Paying fourteen times the price for less than one-quarter of the footprint is beyond delusional."
Looking around the market, there are still opportunities. Caesars Entertainment has four properties in Atlantic City--about 40% of the market. I'm sure they'd be willing to spin off the Showboat if they could find a willing buyer. In 2011, it doesn't really add anything to the company except more rooms and slots. Bally's/Wild Wild West/Claridge has a huge footprint and lots of potential should the market turn around, Caesars is the prestige brand (and now corporate namesake), and Harrah's is the second-best performer property in town, behind Borgata. So Showboat would probably be available if the money was there, and if it's not already encumbered by a debt agreement.
The Atlantic City Hilton's woes have been well-documented, and with the Tropicana under Icahn's control, that's easily the most vulnerable, and the only one that's officially on the market. Anyone got $30 million burning a hole in their pocket? If you had the money to invest in improvements and marketing, it could be a solid buy.
Basically, what happened to Trump Marina is proof that, if the economics are right, there are still operators willing to invest in Atlantic City--and you don't need mini-casinos to persuade them to dip their toe in the water.
Yeah, so this isn't about gambling addiction but I couldn't resist the use of the headline on everyone's favorite in-casino pamphlet.
Jeff's back with the latest installment of his column and this time around, it's looking at a common thread in recent casino corp conference calls: a reduction in comps to rated players.
The article is after the jump.
Some notes from my trip, now two weeks past:
- Hotel: Stayed at Cosmopolitan and tried their lowest end room product, the City Room (which I believe is the only room offered with two beds). I took my brother along on this trip, who is 29. This was his first experience at the Cosmopolitan and he absolutely loved it. Everything from the design, to the room to the pool - right up his alley. It was interesting to see the place through someone else's (significantly less jaded) eyes.
- Cosmo: Generally, things went well. The room was clean and we got in right way. I visited the spa and while I appreciated the design, the attendant allowed towels and used cups to stack up all over the place and they didn't have any combs or brushes for your hair. Weird. In the casino, I was informed that none of the bars have Stolichnaya Vodka (they have flavors but not the normal stuff). It's such a common brand, that seemed odd to me as well. Service was pretty good throughout the resort. Friendly workers and lots of curious folks wandering the property. I didn't see a lot of gaming action.
- Food: Hit some places I'd already been or had been recommended to me: China Poblano (twice - so good), Tacos al Gordo (near Encore ; very good taco stand style - highly recommended. It seems their new Strip outlet was a surprise to some based on the Twitter reactions), Steak and Shake (South Coast ; was fun and worthwhile but the line was loooooong). Drinks at Sinatra where we had a long talk with the bartender - he'd actually served The Chairman long ago.
- CityCenter: Took my bro through CityCenter for the first time. He's an artist and really appreciated the work they've installed around the campus. He didn't care for The Crystals very much though ("this place is a disaster. WTF?")
- Construction: Ruffin is removing more of the TI lagoon to add a Starbucks and some sort of margarita debacle. The area being torn up is the southern tip, between the porte-cochere and the front of the hotel. Further down The Strip, the Tropicana is looking more 'finished' - less jarring moments as you move from a renovated part of the hotel to one that hasn't been touched. At Cosmo, Blue Ribbon was having it's floors replaced (it's since re-opened) - in talking to employees, it sounds like it was pretty dramatic when that pipe broke (I can't believe we haven't seen any random customer video). The Sugar Factory at Paris is just as ugly as I expected it to be.
- Sahara: Went by for what might be the last time. It was medium busy in the casino but the employees looked pretty sad and tired. Being in there was a bit of a bummer but I'm glad I got the opportunity to take some pictures.
- Crowds: This was a Tuesday and Wednesday night but it was crowded. There were people everywhere. Nice to see.
- Vegas Video Network's Pub Crawl: On Wednesday, I went to a taping of Pub Crawl at the Vegas Video Network studio. This was a lot of fun and if you're a fan of the show, you should consider it on your next trip. Everyone was super friendly and they're a laugh riot. Bring booze.
I took a load of photos. They're available here in case you want to see them.
A couple of great new choice Steve Wynn quotes in this RJ piece:
"They started CityCenter on all debt alone. It was luck they bumped into those guys from Dubai," he said. "They gave them $5.4 billion. It's gone. How could you lose $5.4 billion here, you've got to be an imbecile or a moron."
and also, on Cosmo:
"The place is worth $500 million," he said. "It will throw off $40 million to $50 million at nine times earnings. That's 10 percent of what it cost."
Oh, BTW - congrats Steve!
Read the whole piece here
Jeff's back with his latest piece and this time he's examining the performance and challenges facing The Cosmopolitan.
Click through for the full text, it's a good read.
I was just at Cosmo last week for another stay. I've got a bunch of scribbles and other notes that I'm (slowly) working to turn into a piece of my own.
Word is starting to get around that the FBI has seized the Internet domains of popular online poker sites including Full Tilt Poker, PokerStars and Absolute Poker.
According to CNBC's Twitter account, the companies have been charged with 'Fraud, Illegal Gambling'.
While some users may still be able to reach the sites in question (Internet DNS changes take time to propagate, especially when they're... uh, unscheduled), that won't last. The domains have been seized by the FBI's Cyber Initiative and Resource Fusion Unit.
This is pretty huge.
We've been talking about online poker and Nevada gaming companies getting into bed with these folks... Well, if they're convicted, I have a feeling we won't be seeing PokerStarsWynn.com anytime soon.
More to come on this and I'll update with more details as they're available.
Update: The US Attorney's press release.
One thing that's not clear at the moment is what is going to happen to customer funds that were on deposit with these sites. As of right now, they're unavailable for withdrawal.
If you want to follow the discussion in the poker community, have a look at these forum posts.
Update: After a bit of a delay, the Vegas papers have stories up:
It's the end of an era... sort of.
MGM Resorts International founder and primary shareholder is stepping down from it's board of directors in June.
Kerkorian built the largest hotel in Las Vegas three times with The International, the original MGM Grand and then the MGM Grand we know today. Inextricably linked with Las Vegas, his fortunes have risen and fallen with Southern Nevada's.
What does this mean for MGM and Las Vegas? Probably not a whole lot will change. While it seems clear Kerkorian has served as an advisor to Murren and Lanni before him, it doesn't sound like that advisory relationship will change much, at least in the near term. If MGM executives could convince the board to go ahead with CityCenter, they're pretty much being allowed to do whatever they want over there anyway.
In an interview with the LA Times, Sahara 'operator' Sam Nazarian claims that the plan all along was to close the hotel for renovations and for it to re-open in 2014 as "SLS Las Vegas, with six restaurants and two nightclubs".
"We've spent $30 million in design development drives; we're shovel-ready," said Nazarian, who formed his company in 2002 with proceeds from real estate investments as well as a wireless telecommunications company he sold. "If we were admitting defeat we would have admitted it."
Uh-huh. A few questions:
- What exactly has he spent $30 million on designing?
- Why no mention of the secret plan when the resort's closing was announced?
- How much will this renovation cost? He's only got three years so unless he's not going for major upgrades, work had better start by the end of 2011 if he wants to make 2014.
- Who is going to lend him this money and put cash into a North Strip property that is neighbors to a dirt lot and the ugliest unfinished building in America?
As Jeff said on Twitter - "I'm skeptical. Very."
An IPO for MGM's Macau has been long rumored and we finally have details on how the deal will be structured - MGM's stake will actually increase by 1% to give them a 51% majority control position.
MGM's sometimes controversial partner, Ms. Pansy Ho, will have her stake reduced to 29% while the remaining 20% is sold to the public. In a related transaction, Ho will purchase $300 million in MGM notes.
I actually spent the morning reading the Wynn Macau annual report and while there are few zingers (Cotai still hasn't been approved by the government despite Steve basically saying 'any day now' during the last conference call), the one inescapable fact is how much money they are making over there. It's staggering.
MGM historically hasn't been as successful in Macau as Wynn but that's been on an uptick and being able consolidate the affiliated company on their books should help their financial picture.
Here's Jeff Simpson's take on the morning's news:
MGM Resorts made an important announcement about its Macau joint venture this morning, a deal that I think will be a big plus for the Strip's biggest operator. In a deal with partner Pansy Ho, the JV will sell 21 percent of its ownership shares in an initial public offering -- all supplied from Ho's current 50 percent stake in MGM China. 18 percent of MGM China's shares will be sold through the proposed IPO and another 3 percent will be made available as an over-allotment -- all 21 percent will come from Ho's half-stake in the JV. MGM Resorts will buy an additional one percent of MGM China shares, that coming from the over-allotment. The proceeds of the IPO and of MGM Resorts purchase of the additional 1 percent stake in MGM China go to Ho. Ho, in turn, has agreed to buy $300 million of MGM Resorts senior debt. The deal and the IPO, if approved by the Hong Kong Stock Exchange, will result in:
* MGM Resorts upping its stake in the MGM China joint venture from a 50 percent stake to a 51 percent stake.
* Public shareholders will own 20 percent of the JV.
* Ho's stake in the JV will drop from 50 percent to 29 percent.
This is a great deal for MGM Resorts as it allows them to take control of their Macau JV without diluting its ownership stake because of the IPO. MGM Resorts also is spared having to dig deep to buy out the stake Ho is selling into the IPO. The deal also conveniently allows Ho, who now has a significantly increased stake in and probable operational control of her father's market-leading casino company, SJM, to dilute her MGM China stake and reduce conflict-of-interest concerns.
The challenge for MGM Resorts will be to continue its slow improvement in Macau operations, increasing its market share while Ho's allegiance and contacts will likely increasingly favor SJM.
In a separate deal, the Michael Jackson estate and Cirque du Soleil announced a long-rumored joint-venture to produce two Jackson-themed shows, one of which will tour and the other of which will take up residency in a Strip showroom of an MGM Resorts hotel [ed: most assume this will probably be Mandalay Bay or, less likely, Monte Carlo]. I imagine the Las Vegas show will be a success and will be a plus for all three entities (MGM, CdS and the Jackson estate), the glut of CdS shows notwithstanding.
Jeff's back and we're talking about poker again this time around. Since the last post went up, Nevada Governor Brian Sandoval has weighed in with a letter to the author of AB258 that makes his position fairly clear.
The letter is available here from the Las Vegas Sun.
What did the mainstream media miss when analyzing this development? Continue on for Jeff's take on how this impacts this issue.
Update: According to Channel 8, an amended version of the bill made it out of committee and is heading to the Assembly floor.
From a story in today's Las Vegas Sun about sportsbook apps coming to smartphones:
After launching its first application for BlackBerry phones in September, the company has introduced the application for Android and will soon be compatible with iPhones.
Apple requires all App Store bound apps to go through an approval process. They don't tell us where these reviewers are but most people seem to think they're in California, Massachusetts and Texas. Per state law, this app only works inside Nevada's borders.
Is Apple going to come out to Nevada just to review this app? If so, that's not an option that is generally available to other developers and would obviously cost money. Is Leroy's going to break gaming regulations to allow Apple's testers to opt out of the location targeting? Maybe some sort of simulated test mode that tries to straddle both requirements?
This issue may be unique to the iPhone and thus maybe not all that interesting of a story in the general sense... but it shows how technology is intersecting with gaming almost continuously these days. Perhaps telling is the fact that Apple removed specific language that prohibited gambling apps several months back, opening the door to non-simulated wagering.
On this topic, I'm certain that there is more to come.
Cosmo has filed it's first 10-K for the year 2010. This comprises a year of opening expense but only 17 days of operations.
More analysis to come (I'm hoping Dave and/or Jeff will share their takes and I may have more to say too) but a few interesting figures:
We incurred a net loss for the year ended December 31, 2010 of $139.5 million
The Company's gaming revenues were $4.3 million for the 17 days of operations during the 2010 fiscal year. Non-gaming gross revenues over the same period were $14.0m. The Company's gross room revenues were approximately $4.2 million. Average daily rate ("ADR") and occupancy for that period were $319 and 97.8%, respectively, generating revenues per available room ("REVPAR") of $312. Other non-gaming revenues included gross food and beverage revenues of approximately $9.3 million and convention and retail revenues, including the spa and salon, of approximately $0.5 million.
Revenues for the 17 days of operations in 2010 include retail value of accommodations, food and beverage, and other services furnished to our guests without charge. These amounts totaled $7.6 million and, in accordance with industry practice, have been deducted from revenues as promotional allowances.
Perhaps some of this stuff will show up on EBay?
We recorded an expense of $10.1 million in 2010 primarily relating to certain construction in progress ("CIP") related assets that we deemed had no future value to the Company. These abandoned assets consisted primarily of fixtures and furnishings, including assets which were in various stages of completion at our suppliers, as well as cancellation fees charged by some suppliers against deposits held by them. These assets were identified following the finalization of certain interior designs in the period leading up to the opening of the Property on December 15, 2010.
A big chunk of 2010's expenses were advertising related:
Total advertising costs were $44.3 million, $0.1 million and $0, respectively, for the years ended December 31, 2010 and 2009 and the period from July 30, 2008 (inception) to December 31, 2008.
Looks like John's taking home $800k per year:
The annual base salaries for Mr. Unwin and Mr. Burge have been set at $800,000 and $400,000, respectively.
That makes him a bit of a bargain, especially compared to his neighbor, Jimbo Murren, whose salary, not including stock or bonus, was $2.0 million in 2009.
If the hotel is sold, they want Unwin to stay...
Each of Mr. Unwin and Mr. Burge is entitled to earn a retention bonus based on continued employment through the date on which a sale of The Cosmopolitan is consummated. If, during the term of their respective employment agreements, The Cosmopolitan is sold to an unrelated third party and their employment has not terminated as of the completion of such sale, Mr. Unwin and Mr. Burge shall be paid a retention bonus of $4,500,000 and $1,000,000, respectively, within 60 days following the completion of the sale.
... and if it's shutdown, he still cashes in:
Similarly, if at any time during the term of their respective employment agreements, each of Mr. Unwin and Mr. Burge's employment is terminated due to a shutdown of The Cosmopolitan, they shall be paid 100% of their respective retention bonus.
As for the data itself, 17 days isn't much to work with... But, given the past few years of property openings, we do have some other resorts we can compare against.
According to the Las Vegas Sun, Aria generated operating income of $7m during it's first 15 days of operation. Aria is a much larger hotel than Cosmo though neither were able to ramp up all their rooms out of the gate. As Aria headed into the first quarter of 2010, it famously had occupancy of only 63%.
Wynn Resorts reports WLV and Encore together so we don't have specific figures for the latter, which opened in late 2008.
UPDATE: Dr. Dave here. Here are some of my thoughts.
It's notoriously difficult to evaluate opening numbers like these; there's never enough information to make a good comparison. What's a "good" gaming revenue number for a casino that's opening without a legacy player database? What kind of F&B numbers should the place be pulling in? There aren't any real benchmarks, which is kind of scary when you think about it. People invest billions in building these things and don't have any way to define what makes them a success. Or at least no definition that they'll share with the public.
In the absence of those kinds of apples to apples comparisons, I figured the best thing to do would be to take the daily average in each of the categories that Cosmopolitan reported and compare it to something I have: the daily average revenues for big ($72 mil plus in annual gaming revenue) Strip casinos for fiscal 2010. If you want to see that report, it's over here (pdf).
As you can see, the Cosmopolitan's got a lot of heavy lifting to do. In gaming, it woefully underperformed, lagging the Strip average by a whopping 55%. I'm not totally sure whether the casino took that million dollar hit from baccarat cheaters in December or January, so that might be skewing the results.
In rooms, it's also underperforming, but that's not surprising since it didn't have all of its rooms online.
The big surprise is food and beverage; here, the Cosmopolitan significantly outperformed the Strip average, by 172%. Of course, you might have casinos like Circus Circus and Riviera in the group, so it's hard to compare these numbers with, say, Aria, Bellagio, or Wynncore. But with this limited data, it looks like the "new to market food and beverage concepts" (I've got that burned into my brain now) are a success.
"Other" revenue is mostly retail and entertainment, and since the Cosmopolitan's big theater isn't yet open, and it doesn't have a staple show that will consistently bring in big bucks, this isn't a surprise.
So all in all, it's hard to say exactly what's going on, but judging from what we see here, in December the Cosmopolitan struggled with its casino, about par with its rooms, doing great with f&b, and straggling along with everything else.
Riviera Holdings Corp, the company that owns the bankrupt Riviera casino hotel on the Las Vegas Strip, recently released its annual report. The company had a rough year, and a look at the financial reports from the last few years sheds some light on why the casino's in such trouble, and why the Sahara is closing.
(more after the jump)
I'm back with another peek at the stats collected by Vegas Mate, my iOS app for all things Vegas. Traffic in the app is up again this month, which is always nice.
Over the past thirty days, Vegas Mate usage has broken down as follows - most viewed hotels:
1. Aria (5.73% - Last Month: #1)
2. Bellagio (5.45% - Last Month: #3)
3. Caesars Palace (4.39% - Last Month: #4)
4. Cosmopolitan (4.31% - Last Month: #2)
5. MGM Grand (4.04% - Last Month: #6)
6. The Venetian (3.59% - Last Month: #5)
7. The Mirage (3.22% - Last Month: #9)
8. Wynn Las Vegas (3.09% - Last Month: #7)
9. Planet Hollywood (2.90% - Last Month: #8)
10. Mandalay Bay (2.72% - Last Month: #10)
A few interesting points:
* Cosmo fell from #2 to #4.
* Aria remains in the top spot.
* The Mirage zoomed up two spots.
Compared to last month, the top 10 represented a smaller share of the overall pie, indicating less concentration amongst the top properties.
The least popular? Fiesta Henderson. The least popular on The Strip was the Four Seasons.
In restaurants, the Buffet at Bellagio was again the most popular, followed by the Wynn Buffet, Aria's buffet and then Craftsteak. The top ten restaurants are four buffets, two cafes and four fine dining places.
The most popular shows? Peepshow followed by O, Garth Brooks and Jabbawockeez.
It's obvious that Steve sees WYNN as the spiritual successor to Mirage Resorts, not MGM Resorts International:
As a company that has safely conducted gaming in the US for more than 40 years, we believe that the same can be done for poker on the internet
From the Wynn Resorts press release today about their alliance with PokerStars.com.
Wynn Resorts was founded in 2002 (though some of it's subsidiaries existed as far back as 2000).
A bill currently on the floor of the Nevada legislature's getting a lot of attention. AB 258 would legalize online poker in the state of Nevada and, with the consent of partner states, outside it as well.I thought I'd look at the text of the bill and share my thoughts.
More after the jump...
Last week, one of the local dailies ran a story reporting on the latest trend: baccarat and penny slots are big revenue producers for casinos, particularly on the Las Vegas Strip.
Great story, but it's about 6 months out of date--at least where baccarat's concerned. And, as a look at the numbers will show, the ascendancy of the penny slot is hardly news. There's a real story in here, but it's not the one you read in the paper--and it's not necessarily a good one for Nevada gaming.
(More after the jump)
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.
Ok, so it's the US, not Mexico... I just really wanted to say 'Federales'. Anyway, here's the deal...
It seems the US Securities and Exchange Commission (SEC) and the US Department of Justice (DoJ) have decided to investigate Las Vegas Sands under the provisions of the Foreign Corrupt Practices Act. This investigation came to light in Sands 10-K, filed today.
It seems that allegations by Steve Jacobs, a former exec at Sands China Limited (LVS subsidiary) triggered this investigation. He alleges all sorts of shady and underhanded dealings, some supposedly instigated by the head Rascal operator himself, Mr. Sheldon G. Adelson.
No way to know if any of Jacob's allegations are true - he clearly has an axe to grind with the brain-trust at the MEGACENTER™. Still, would it surprise anyone to find out if this really was how business was conducted over there? Secret investigations of your enemies? Bribes? Kinda exactly how I imagine things might work when billions are on the line and your regulator is a semi-corrupt authoritarian state. But hey, what do I know...
Can't wait to see what happens... My bet is probably nothing. The SEC doesn't really have a great track record when it comes to busting real financial criminals.
I've been collecting anonymous stats of Vegas Mate usage since October. For those familiar, they work sort of like Web stats - basically treating screens in the app as 'pages'. I added the analytics to make better informed decisions when enhancing the product but one interesting side effect is seeing what people are looking at.
What's the most popular hotel in Vegas Mate? I thought it might be fun to look at the data...
Over the past thirty days, Vegas Mate usage has broken down as follows:
1. Aria (6.59%)
2. Cosmopolitan (6.28%)
3. Bellagio (5.83%)
4. Caesars Palace (4.77%)
5. The Venetian (4.05%)
6. MGM Grand (3.97%)
7. Wynn Las Vegas (3.67%)
8. Planet Hollywood (3.19%)
9. The Mirage (3.17%)
10. Mandalay Bay (2.93%)
The top ten represent about 45% of the total hotels viewed - there's still quite a bit of activity all the way along the curve. I was interested to see Aria sticking in that top spot, despite a strong surge from Cosmo.
I may do some of these posts on a semi-regular basis, we'll see.
This time on the show:
Mr. DeRuyter Butler, Executive Vice President of Architecture @ Wynn Design & Development is our special guest.
We discuss Cotai, Fontainebleau, his role at Wynn D&D as well as CityCenter and challenges of working in China. Plus, we find out that Sheldon has been giving us all the middle finger since 1999.
This is a 'don't miss' interview.
If you love casino design, construction and all the thinking behind it, check it out.
Check out the show: http://www.vegasgangpodcast.com
Feel free to leave your comments below. If it's a question that you want asked on the show, please make that clear in your post. You can also send those to email@example.com.
Jeff's latest column delves into the Hard Rock settlement with the NGC.
Interestingly, in the past few days the Hard Rock has been in the news as it appears it is heading into foreclosure. We'll discuss that story and others on the Vegas Gang this week.
Keep reading after the jump... and yes, I skipped thirteen on purpose.
I'm a bit of a daydreamer sometimes.
I love wandering the casino floor and when I do, I often think up crazy schemes and ideas about what I'd do if I ran the place.
One of these strokes of brilliance (!) came the last time I was staying at Wynn Las Vegas, strolling through the beautiful Tower Suites lobby.
If I was running one of these hotels, I'd require every single one of my managers to stay a few days in the hotel each year. Eat in the restaurants, use the spa, go to the pool, etc... You see things differently as a guest, even if you're already on property every day going to your office.
Sure, a lot of resort employees have done all of the above as part of an opening routine and some eat in the outlets frequently. I'm talking about a concrete program, done without fanfare or as some sort of special event.
Perhaps the higher up you go, the more nights per year you're supposed to spend doing this sort of thing - and I'm not talking about checking into villas or eating at Alex - it's more important to stay in the cheapest and most popular rooms, eating in the more reasonably priced restaurants. It's as a guest you see the little bits of damage and problems with the rooms, service and facilities that you'd never notice during a quick walk-through.
And for what it's worth, I don't mean a stunt like this, though that does sound humorous and I'm sure I'll watch it.
Do any of The Strip properties already do this? I've never heard of a similar program but maybe I've missed it. Do other large hotel companies do this?
Just a little quick update - these guys should be staying in their competitor's hotels too. The VP of Hotel Ops at XYZCore should be staying at the Arias, Bellagios, and Mandalay Bays of the world, as part of their job.
This seems inevitable.
Stanley Ho, at one time the singular Macau casino kingpin, has transferred control of STDM/SJM to entities controlled by his family.
Ho's grip seems to have lessened in recent years as the businessman had ailed in hospital for some time after a fall.
These ownership shifts are interesting, partly because we don't know what changes might be in store but also because one of his daughters, Pansy, is MGM Resorts' business parter in the MGM Grand Macau project. That relationship got the company into some hot water with New Jersey regulators due to her complicated relationship with her father.
Here ya go folks, the latest Simpson on Vegas, via our good friend Jeff Simpson.
This column is all about the little annoyances on the casino floor - it's a great look at the little things that bug Jeff (and a lot of these bug me too)... Plus, we get to publish the term 'craps superstar' - a new job description is born!
Huh? Jimbo's favorite part of the whole complex, all ripped to bits?
Perhaps just a little 13 month renovation? That is the normal schedule to renovate a resort feature, after all - we all know that.
Update: A few more photos: https://twitter.com/billyinlasvegas/status/27160695330045952
This time on the show:
* Trippies 2010
* Alex Closes @ Wynn Las Vegas
* Plams LovesMan - Maloof Downfall?
* Social Media Abuse - Bubble Bursting?
** Sure Bets **
Check out the show: http://www.vegasgangpodcast.com
Feel free to leave your comments below. If it's a question that you want asked on the show, please make that clear in your post. You can also send those to firstname.lastname@example.org.
Happy holidays to all!
Jeff is back with a special column, and while prostitutes and lawsuits might not be traditional Christmas fodder, I recommend reading anyway. Come on, you know you're stuck with your relatives and probably bored out of your mind right about now, right?
Enjoy... and who doesn't want an Adelson voodoo doll? Last minute gift idea!
So, here's my 4,200 word set of notes on my stay last week at The Cosmopolitan of Las Vegas.
I hope you enjoy it - please leave your comments below.
If you want to see photos from my stay, a complete gallery is located here.
Keep reading after the jump.
Our special guest this week is Steve Friess of The Strip Podcast.
This time on the show:
* The Cosmopolitan of Las Vegas Opens
* Vegas Gang 'Sure Bets'
Check out the show: http://www.vegasgangpodcast.com
Feel free to leave your comments below. If it's a question that you want asked on the show, please make that clear in your post. You can also send those to email@example.com.
That could almost be a headline on the cover of Cosmo, the magazine. As you might have guessed though, this is about The Cosmopolitan of Las Vegas, which opened this week on the Las Vegas Strip.
What sort of problems?
Well, I plan to write another post with more detail on this topic but to give you a flavor: our room wasn't ready until three hours after we were told to arrive for check-in, neither of the TVs in our room worked properly (one of them could not be shut off without being unplugged and on the other you couldn't change channels), neither bathroom had a bathmat so water made the marble floor very slippery, we did not receive the turn-down service either night we were there, and the TV couldn't be used for many of the built in services such as checkout and reviewing of messages.
That's a partial list of the problems I recorded with the room. It doesn't include any of the good stuff either - that will be in a dedicated post about the room and the stay that discusses some of the great things about the design and a few things that really bugged me from a functional standpoint.
The question I want to ask is this: what should a guest expect of a brand new hotel and how should a brand new hotel market itself before it is running like a finely tuned machine? Are opening night guests asking for abuse? Should new hotels make disclaimers or offer discounts?
To set the stage for this discussion, I'd like to include a few important bits of information about this week:
* The per night rate for the Cosmopolitan this week was significantly higher than comparable rooms at other Strip resorts (traditionally this is a very slow time of the year).
* The front desk staff told us that all the rooms had been extensively checked for problems prior to any guests checking in. It's hard to imagine how this could be correct given some of the basic issues like TVs not working.
* Cosmo CEO John Unwin was quoted in several interviews saying the staff was ready and excited to open the doors and to welcome guests. If anything, I'd say expectations were raised in the pre-opening press, not lowered.
* There was no disclaimer or notice to incoming guests that kinks were still being worked out and that they may need to be patient, etc...
Based on the comments on Chuck's post and some of the stuff I read on Twitter, I get the impression that some folks believe that this is just what happens with new hotels and the first guests should just deal with it. Maybe most people feel that way - I'd like to find out.
I think it's an interesting question but for me it boils down to getting what you pay for - they promised a lot and didn't deliver on that promise, at least in terms of hotel operations. Based on that, I think that the complaints are justified, even if we're not talking about curing cancer here.
None of the problems I encountered are even close to terminal. If they pivot and fix these issues, then this will be a distant memory in no time. Early signs indicate that they're serious about raising their game. We'll see.
Let me know what you think in the comments.
One of the things I've noticed as I've been touring Cosmo are the interesting uses of technology in the new resort.
As CEO John Unwin would say, as a new company, they are free of legacy tech. The result is interesting uses of the latest and greatest. A few examples:
* LED/LCD displays are everywhere, not just for ESPN but for tons of art from Chicago firm Digital Kitchen.
* The casino floor way-finding machines are not only touch based but also include a slot, video poker and table game finder based on several criteria including denomination and game type.
* Each check-in desk has an embedded iPad, tuned to a special 'guest services' app. Right now this appears to only be the Cosmo Web site but I expect this to expand over time. I was tempted to install the Aria app for kicks but I restrained myself.
* The in-room TV allows you not only to view info about the resort but also the acts appearing in venues like Marquee and Book and Stage, as well as the ability to show a personalized itinerary of your activities on property. This is a few steps beyond anything we've seen in-room elsewhere in Las Vegas.
* Much of the digital art is generative, meaning it deviates from its baseline using stimuli from the environment - for instance, the digital pillars in the lobby will animate more bubbles as you walk by, based on sensors in the base.
That's just a taste but for a nerd like me, I love this stuff. I've gotten a hint of some of the backend software they're using and I hope to bring you some detailed information on that soon.
I'm on the ground this week for the Cosmo opening and today was my second chance to tour the property, this time in a more extended fashion than last week. It was great to be able to spend a little more time and really check things out.
I'm still excited. The rooms really are drop dead gorgeous and the terrace views from the upper floors are insane. They make you gasp when you step out for the first time.
I also got a chance to join a David Rockwell interview with Blackjacker1979. Rockwell had a hand in a large amount of the property design. That should be posted soon - it's only about ten minutes but was quite interesting. Thanks to Eric for letting barge in.
Hotel check-in is tomorrow afternoon starting at 1pm, followed by a chance to try some nibbles from the various restaurants. The curtain goes up for the public at 8pm - I'll be at the craps tables.
The big week is here - Cosmopolitan of Las Vegas opens on Wednesday. I'll be in town most of the week to cover the event for for my favorite Internet readers, you.
The fun starts on Tuesday with another set of tours and interviews, continues on Wednesday with a ribbon cutting ceremony and then wraps up at 8pm when the doors are open to the public.
Two Way HQ will be setup in my Cosmo suite so that I can bring you all photos, video and commentary from me and a bunch of other interesting folks too. Should be fun and it's the last one of these we'll get to do for awhile.
For those that are also in town, there are several meet-ups planned:
12/14 10:11pm Mandarin Bar - Mandarin Oriental
12/15 6:11pm Chandelier - The Cosmopolitan
12/15 8:00pm THE COSMOPOLITAN OF LAS VEGAS OPENS
12/15 11:11pm Vesper - The Cosmopolitan
12/15 1:11am Bond - The Cosmopolitan
Hope to see you there.
In addition to the opening coverage, I'll be performing a final round of 'boots on the ground' testing for Vegas Mate 3.0, which is about to be completed.
I'm writing this post several hours after getting my first look at the Cosmopolitan of Las Vegas with my good friend Chuckmonster, following an interview with CEO John Unwin. Let's be honest - the hype machine surrounding the opening has been running overtime for the past few weeks. Cosmo has been getting a lot of ink, most of it positive, even if tentative. I won't be coy: I was impressed with what I saw. In some cases, very impressed.
Given that, when discussing this new property I think it's useful to turn back the clock a year. When I first toured Aria in November of 2009, I found a few things I liked there too. Based on my glance today, there's more to appreciate in the design and innovation of Cosmo than there ever was at Aria but it underlines a fundamental truth: without great service, no hotel will matter very much to any customers that matter very much.
We saw a lot today and to be honest, I'm still processing everything.
One thing though, stood out so dramatically that I can't stop thinking about it - the views, from the terraces in the tower to the restaurant patios to the windows overlooking the lake at Bellagio from the Identity Lounge - they are stunning... beyond stunning.
The Cosmopolitan appears to be embracing it's place on The Strip and reveling in it - personalizing it and making it an integral part of it's identity. Doubling down on it even. Unlike CityCenter, where designers seemed almost ashamed to be part of the legacy of their neighborhood, The Cosmopolitan of Las Vegas seems to be all about providing a window to the excitement that's both inside and outside it's doors.
I had a lot of fun on our tour today. I love the little details like the varied light fixtures and chandeliers (not THE chandelier, though that is stunning as well), the Japanese soaking tubs (again, with great views), the huge suites with their wine fridges and complete cocktail gear, the varied and interesting restaurant designs, the at-first-seemingly-random but at closer-examination-definitely-not collection of LP covers leading the way down to the now not-so-secret pizza place, and one gaming innovation: casino cabanas.
That last item is a simple but unique idea and I'll be very curious to see if it plays - table games, separated via beaded curtains, allowing you and your buddies to have a semi-private experience without running afoul of state law.
In our interview, Mr. Unwin repeatedly gave us the phrase 'different that matters'. It appears that's something of an ethos for the new resort - change and challenge the operational and design status quo but not just for the sake of doing so - it has to be done for a reason. I like the sound of that philosophy but it's too soon for me to judge if that's just a catch-phrase or if it means something tangible.
I'm back here next week and I'm looking forward to it. It will be a lot more fun to write about this stuff when I have photos and tales of customer service to share. Right now the place is all promise.
I hope that promise is fulfilled because that would be a lot more fun than the alternative.
UPDATE: We got permission to post a few new, blurry photos of the joint - the lobby, part of the casino and the Vesper bar, which is right off the lobby. We'll have full-on, real, non-blurry photos and video in a few days.
This time on the show:
* Special Edition - Hunter and Chuck interview John Unwin, CEO of the Cosmopolitan of Las Vegas.
Check out the show: http://www.vegasgangpodcast.com
The esteemed Mr. Simpson is back with his latest column. This time around the bend, he'll share his thoughts on the opening of the Cosmopolitan as well as discuss a recent stay at Aria.
A surprising headline - it seems that Macau decided not to grant a land concessions for two parcels to Las Vegas Sands. This was land that the company was expecting to be granted to develop an integrated resort. This PDF from 'Top Builders Group' shows some renderings of proposed LVS buildings for that site.
The company can appeal the decision but has a very limited time window to do do.
This is interesting. We've of course seen rumblings from the Chinese government indicating that they want to slow development of new resorts in Macau but this is a significant development.
In September, SJM indicated that it wanted to take over the parcels for its own development.
You just lined up three diamonds.
Along with the traditional bells and whistles, the machine illuminates a small LCD and offers to snap your photo via the built in camera. If you accept, it will be posted to your Facebook account along with a message letting all your friends know just how lucky you are (with or without jackpot totals, based on your preference). The machine will have access to all of your social networking profiles, via your slot club account - you linked them via the club Web site.
As far as I know, no slot manufacturer has announced this sort of integration but I have to believe it's coming someday. It only seems natural as younger players, reared on video games and smart-phones, start to enter the eager marketing cross-hairs of the casino industry.
What Other Innovations Will We See?
I'd also expect more video type games that involve multiple coordinated players and network based achievements. Again, taking a cue from video games, these players are used to playing against their friends on networks like Xbox Live where they are able to achieve levels based on amount of play and skill. These achievements could move with you from machine to machine and maybe even casino to casino - imagine a sort of meta slot club for certain games that recognized your play no matter who owned the machine you were playing on. I think that some manufacturers have already talked about this sort of thing arriving soon.
Will we start to see significant games exclusive to a certain casino or multi-property corporation? Could we ever see a gaming company purchase a manufacturer in an effort to get exclusive access to the hottest games? This is not an uncommon pattern in video gaming, as manufacturers like Microsoft and Nintendo have purchased companies like Bungee and Rare in an effort to lock up the best titles as exclusives. What if you could only get Wheel of Fortune at Las Vegas Sands properties?
IGT's market cap is only $4.65B - not unsubstantial for the debt ridden gaming companies but not so high that it's outside the realm of possibility. Let's also not forget that Kazuo Okada is one of the major investors in Wynn Resorts - his company is a device manufacturer in Japan.
Come On, Most Slot Machines Really Are Pretty Boring
It's interesting to see what seems like the relatively slow pace of game innovation on the slot floor. In other industries, companies like Zynga have proven that there's a huge market for different types of social games (i.e. Farmville) that, if you explained them to someone before they became popular, you'd be laughed at because the idea sounds so dumb. My gut instinct is that while some of the traditional double-diamonds-with-cheese type games may continue to draw for some time, eventually these game makers will need to come up with something more compelling. I can tell you that generally speaking, I find slots a bore and not worth more than a few minutes while waiting for someone, etc...
How about a game where winning money is just part of the draw - something that has other compelling qualities as well? I'm not suggesting that we somehow turn Halo into a negative expectation slot machine but there's got to be some way to meld these two concepts so that they can start to look at the future.
One hurdle is regulation. In NRS 14.040, the "Minimum standards for gaming devices" states that games "must use a random selection process to determine the game outcome of each play of a game". That sounds like any game that uses skill is out but it's not quite that simple.
The Gaming Control Board's 'Technical Standards for Gaming Devices and On-Line Slot Systems' deals with extended features and bonus games, which *are* allowed to incorporate skill into the outcome, though they are severely limited in the amount they can contribute to the overall return to the player - no more than 4%.
"Oh, they tried skill based games and they didn't take off."
Yeah, you know what kinds of games they tried? Crap like Battleship. I can't imagine anything more boring. The recent 'Pong' slot machine also had a skill based bonus round. I give them nostalgia points and it's a little closer to what I'm talking about but still, it's a half-assed attempt at doing something interesting.
The regulation is extremely important - they ensure a fair game. That said though, they may need to be reviewed and expanded in coming years as consumers tastes change. It's not like games of skill aren't already wagered on daily in the casino - from poker to twenty one to the sports-book. Unfortunately, change will probably be a very slow process.
People spend a lot of discretionary income on other forms of game based entertainment ($20B on video games annually) - the casino game manufacturers should be working more aggressively to steal some of that market. Make casino games and specific 'gaming devices' a reason to go to a specific property, not just something to do once you've already arrived at the casino.
Will server based video slots in any way lower the barrier to entry for game creators? Again, regulation still stands as a significant obstacle but imagine if manufacturers like IGT could draw on talent from multiple, smaller game 'studios' that would then partner with a licensed manufacturer to bring their games to the market. This model has been very successful in other forms of entertainment production and potentially could result in an explosion of new and interesting ideas for gameplay.
I don't follow the gaming manufacturing industry as closely as I follow the hospitality side - any slot experts care to comment on the above? I'm specifically interested in folks that love slots AND love Facebook.
It's Sunday so it sounds like a good time to do a quick weekly update. First off, Happy Thanksgiving to all those folks in the US and Canada. For me, Thanksgiving is always a refreshing chance to spend time with family without the commercial trappings of other holidays and this was no exception. In translation, that means I worked the entire weekend.
We had a a little bit of pre-trypto fireworks on Tuesday when Steve Friess and Mike Dobranski engaged in a little back and forth over how much they both like to eat great food (that was the topic, right?). I'll let you read the thread on VegasTripping, which does a pretty good job of explaining the ups and downs.
The most interesting part of that conversation is something that's a constant topic for me - the corrupting nature of free stuff from Las Vegas casinos. Once you get to a certain point and draw a certain number of tourist eyeballs, these doors start to open. This is a topic we discussed in the special Vegas Gang episode interview with Chuckmonster and is something that the Vegas Internet Mafia Executive Board discusses from time to time at the monthly meetings in our secret clubhouse atop The Harmon.
For my own part, I've taken free rooms and meals, though it's by far the exception, not the rule - I spend thousands of dollars a year on hotel rooms, food and other entertainment on The Strip. I've always done disclosures when writing about anything I got for free. That's a good baseline but in thinking about this more, I've decided to go further. From now on, anytime I get something for free from a Las Vegas casino, I'll let you guys know (either here or on Twitter), even if I don't plan to write about it. I think that should tie up that last potential loophole. I don't know what the specific policies are on other sites but perhaps they'll start to do something similar. I think it makes good sense and I certainly have nothing to hide and now you know what to expect without any question. Moving on...
In what is becoming a semi-regular thing, the Sun writes about something that many of us (including the Vegas Gang) have been discussing for ages (love ya Liz!) - that the pedestrian access to CityCenter sucks big time. Shocker! Next, we'll read that their big, fancy Elvis show isn't doing too well - egads!
Do you have $5,600 and and a burning desire to see Jay-Z whilst hanging with Las Vegas' finest? A limited number of complete, three-day packages are available for the New Years shindig at The Cosmopolitan. Yeah, that's a metric shit-ton of money but hey, it is New Years and the folks at the Cosmo have turned back the balance on your Citibank card to 2007 levels. If you can't cough up the dough, you could always low-roll it at Aria and then just watch on the big-screen marquee. Tell Jimbo we sent ya.
There's a pretty neat story in the New York Times about the super-hardcore swimmers they source for shows Le Reve and O. I feel asleep the first two times I saw Le Reve but it sure does sound like a lot of work. Oh, 'O" is good too.
Oh, and last but not least, this blog, the (brand new!) parent site, the podcast, my ridiculous Twitter account and Vegas Mate for iPhone were all nominated for Trippies. First off, a big thanks to everyone that wrote us in. When the polls open, we'll post all the details about voting. Everyone knows I'm a sore loser so let's not embarrass papa, ok?
I'm working on a post dreaming about the future of slot machines which should go up this week. I've also got about half of a story on Aria's suckage done but that topic is starting to feel pretty tired to me so it's hard to be enthusiastic about finishing it. We'll see. I spent the whole weekend working on The App so I'm pretty tired.
Have a great week,
We haven't done one of these for awhile but it seems like a good idea to post another. Thanks to Jeff for the suggestion.
To kick off the discussion, there's a story today in the Sun about the El Cortez suite competition.
You may recall that back in August we had the estimable Ms. Epstein on the Vegas Gang to discuss this same topic.
I still like the idea, these months later.
Anyway, open topic away...
Treasure Island owner Phil Ruffin doesn't seem to think CityCenter was such a hot idea. Ok, that might be a bit of monday-morning-quarterbacking but he's also going out on a limb to say Cosmo is doomed, in his talk with Nevada journalist Jon Ralston.
He also revealed that his $1B offer for The Mirage was turned down by MGM's board just over a year ago.
Ruffin's typically one of the more restrained casino owners when it comes to making public comments. Interesting to see him coming out full on, including bashing President Obama.
Thirty days to go.
Thanks to a trusty source, here we have a few shots of some Cosmopolitan of Las Vegas casino interiors, one of the ingress/egress areas (perhaps right inside valet, up to the restaurant level?) and then three videos of the West Valet, showing some of the really cool work the multimedia team is doing.
I've bemoaned the lack of technology being used in modern casino-resorts - well, here we are at least seeing something more inspired than using LCD panels for restaurant menus. Perhaps just a taste?
It's sort of James Bond meets the Bat Cave. If you want to know who Cosmo's ideal customer is, it's Bruce Wayne, no doubt.
I dig the look and I'm excited to see more.
My buddy Mr. Friess has a few more, including what to me looks like the centerpiece chandelier I've heard so much about:
That headline is a quote from Steve Jobs, to a Wall Street Journal reporter in 2004. A year or so later, Apple released an iPod that played video on a 2.5 inch screen. It's often cited as classic Jobs misdirection.
Today's article in the Review Journal about MGM tearing down The Harmon is likely the same sort of statement.
Sure, the building clearly has structural problems - it had to be capped at half of it's height - but to my knowledge there's been no final or official declaration that the resulting structure is inherently unsound, just MGM's attempt to extract a larger settlement from their builder and their builder's insurance company.
MGM says "it is unlikely the Harmon will be completed using the building as it now stands." That leaves plenty of SEC wiggle-room for some 'repairs' to be made to the structure after the lawsuits are settled. Why would they have even finished the building if it couldn't be salvaged? They knew about the problems at least twelve months and millions of dollars before it was sealed.
Jeff Simpson thinks that Fontainebleau might get fontaine-blown-up. That I can imagine. The Harmon, not so much. Unless the building is condemned by the county, I bet on that thing opening someday - furnished with the money that MGM wins from Perini for (allegedly) royally screwing up the project.
Until then, it's the most expensive billboard on The Strip.
Jeff Simpson is back and this time around he's sharing his prescription for some of the most famous assets on The Strip and nearby.
How do you think these properties can survive the downturn? Share your thoughts in the comments.
From there, we were off and into conference calls, some of which included a few interesting tidbits. MGM told us that both Bellagio and MGM Grand will be getting room refurbs next year, while Steve Wynn explained that their Cotai development work was wrapping up and they'd start moving dirt around any day. The best part of that call was The Steve's ludicrous assertion that they're not secretive about their hotel designs - he practically laughed the questioner off the call. We'll see detailed models and drawings of Wynn Cotai just as soon as some inept outside designer posts them online, not because the company was feeling generous.
Speaking of leaks, they continue at Aria, where we've learned that they're working on a massive new signage package to lure Cosmo visitors and that they're even considering building The Strip's largest marquee. I've got loads of new CC stuff to share with you as soon as I'm done digesting it all.
That brings us to today, with the only piece of news this week that really surprised me - Wynn Las Vegas superstar Andrew Pascal has decided to leave the company, to be replaced with the reliable Marilyn Winn Spiegel (someone we considered as a VPP guest before we settled on the excellent Tom McCartney). What is Andrew going to do next? He's a young man, I can't believe that he's ready to retire.
Pascal has worked for Wynn for a long time but before this current stint, he was in Silicon Valley as Chairman of WagerWorks, a company that provided online casino games, playable for points. Is he headed back to tech? Chuckmonster is betting on Icahn but I just can't imagine that sort of transition.
Ichan's not really in hospitality, he's in hospitality finance - moving money around from distressed property to distressed property, a far cry from actually serving guests. Nope, I think for Pascal I'd put my money on a few months time off and then into some new entrepreneurial venture of some kind - more likely Silicon Valley than Spring Valley though. Maybe Aunt Elaine has eyes on angel investing - we know she can afford it.
What's more interesting is Wynn hiring a veteran Harrah's exec for such a tough job. The last HET (or should I say CZR?) alum to have the gig, Don Marrandino, didn't even make it to opening day. Spiegel is well regarded but the properties she's overseen for Loveman have very different guest satisfaction aspirations. Hopefully we're not in for a rocky transition just as Las Vegas starts to ramp up again.
Interesting stuff... In other news, I've been thinking recently about re-calibrating this blog and it's content. The landscape has changed dramatically since I started doing this and in a world where my time is limited, I want to make sure I'm spending it to do something that matters, not just be the second, third or fourth site to post on the same topic. More on this as decisions are made.
One last thing - if you haven't already, maybe go ahead and nominate this blog and my app Vegas Mate for The Trippies - you have three days left before they close. Maybe, just maybe, I'll be so pleased with being nominated that I'll spill a bunch of new juicy secret details about everyone's favorite massively overpriced, failing joint venture project.
The Wall Street Journal has a new piece that dives deeply into some of the hard choices that the joint venture board has had to look at over the past few months as performance has continued to be elusive for the mega-complex.
WSJ: Rolling Dice on Giant Casino Complex (Registration Required)
One thing that does seem to be a bright spot - Aria's performance continues to improve.
I was personally there several times this weekend and volumes seem to be up. That said though, after visiting Blackjacker1979's SkySuite where the light bulbs flickered on and off and the music shut itself down to note an open door (incorrect), there are clearly still problems.
I'd expect CityCenter to market heavily to Cosmo guests starting in December, though one rumor I heard at Vegas Podcast-a-palooza sounded like a terrible idea: an advertising wrap on the Aria Pelli Tower. It would really be sad if it comes to that... How 'bout just building a real Strip marquee guys, huh? You could have the biggest one in town.
In the first four episodes of the show, it's become clear that Mike is a great interviewer - fun to listen to, pulling out tons of random info.
I like the TLV show for the same reason I love VegasTripping - no nonsense, no bullshit info. Mike's not afraid to say when something sucks or when he thinks John Curtas' stamp of approval on a specific restaurant means squat.
It's pretty raw and brash but very entertaining. Check it out, I think you'll enjoy it.
The Fontainebleau is about to open.
A re-invigorated Plaza project has broken ground and Boyd is halfway through putting up a gorgeous red-gold glass curtain wall on Echelon Place. Jim Murren is a semi-successful investment banker in Connecticut, the Marnell's own the recently joined Rio/Palms complex and Nevada's recently elected junior senator is attending the groundbreaking of a monorail extension that will bridge McCarran Airport, The Strip and Fremont Street.
Can we fast forward to 2017? I'm sure that's what some Las Vegas casino operators would wish for. It's hard to blame them.
Things look a bit sour for Las Vegas - August numbers notwithstanding, let's be honest - some of the city's best boom-time customers don't have any more money to spend on bottle service and $500 dinners at SW. Sure, the biggest players haven't lost enough to kill their gambling habit but that mid-tier backbone - successful young people, boomers and a smaller segment of folks truly blowing the rent on a weekend in Vegas - they're still pretty fucked up from this recession.
Well, at least it's not as bad as it is in Atlantic City where the top operator doesn't even want to own the other half of their property. In my mind, AC is toast.
As someone that has spent the last ten years as mostly excited about Las Vegas and now sells a product that is inexorably linked to the city, I have to say that things look very tough for the next few years.
A CB Richard Ellis study publicized today really laid out the bad news. The market won't be able to handle the massive increase in supply for some time. Thanks a lot CityCenter. At least we don't have any more rooms coming online anytime soon... Oh, crap... Thanks a lot Cosmo.
The Cosmopolitan will be the last property for awhile, and that's almost certainly a good thing. In a way, they may end up with an advantage - they can be the 'newest property on The Strip' for five years or more. That title worked great for The Aladdin. Oh well, whatever, nevermind.
Some of the issues mentioned in the report are structural - air traffic is more difficult than ever in the era of shoe-bombers and naked body scanners. Asian baccarat is slated to increase but that alone is not a market savior. The formerly solid underbelly of Las Vegas tourism - that combination of California drive-ins along with southern and midwestern vacationers... well, they're hurting... and that's not going to change anytime soon (damn that Obama-Reid-Pelosi-Boehner-Palin-McCain cabal!)
It's easy for Wynn to charge $200+/night for a weekend night when the town is half full but when Luxor, Excalibur, Monte Carlo and Treasure Island are all offering rooms in the sub-$50 range (sans the ridiculous resort fees), those rates are harder to justify... and how anyone could feel good about a $150/night room at Aria or Vdara mystifies me. Just say no.
But it's not the Wynns of the world I'm worried about. Aside from maybe Las Vegas Sands, they're probably best positioned to ride this turbulence out. As a lover of the history of Las Vegas, it makes me a little sad to see how little of their revenue now comes from the 'Gambling Capital of the World'. In quarterly earnings today, LVS reported that barely 15% of their revenue comes from their two Strip casinos. With Singapore on the rise, LVS is again a gaming company to watch, even if their numbers don't yet match Chairman Adelson's bluster.
Why am I writing this? I dunno. For whatever reason, a few stories today sucked me in and I felt compelled.
News this morning that Boyd Gaming will decline their opportunity to purchase the other half of Borgata, currently owned by MGM Resorts Intl. and held in trust. Boyd is the managing partner of Borgata.
Frankly I'm a little surprised - they only had to cough up $250MM and it's not even worth that to them? Clearly the macro trend of the city weights heavily on this decision.
This moves the process along a bit for MGM for whom the asset is tied up in a trust following action by the New Jersey Casino Control Commission.
** Mad Men Spoiler Alert **
Do you love furry little creatures? The Cosmopolitan hopes so.
The hotel broadcast their first TV commercial during the finale of Mad Men, the popular AMC advertising drama. During the final episode, viewers were shocked to see that Don Draper fell in love with his secretary and got engaged, all in the space of about 42 minutes.
Sure, 'Megan the Secretary' is good looking and seems to actually be capable of a real conversation but come on, Don's clearly emotionally damaged since his marriage broke up and it's hard to look at this as a long term thing. I think most viewers cringed when they watched him dial Faye Miller, the seemingly substantive woman that looked really good for Don, only to blow her off.
Will your flirtation with the Cosmopolitan be longer lasting? There's been a good amount of gushing about the property in advance of it's opening. I've said more than a few kind words myself. Will that last when the credit cards start swiping?
We're now at the point when the resort starts to go from a set of interesting concepts that are easy to appreciate into a 'why the hell didn't housekeeping show up and where the hell are my bags' potential reality.
How will the Interwebs react if Cosmo has the same sort of sputtering opening that Aria had, one year ago? Has Cosmo built up enough goodwill to get the benefit of the doubt if there are major snafus? It will be an interesting test of both the hotel and all of us that write about this stuff.
As for the commercial itself, I don't know what I was expecting but I wasn't totally sold. For me, it seemed a bit like they were trying too hard to establish their cool and edgy bonafides. The commercial felt a little like a live-action version of a nightclub half-pager you'd see in the Weekly or Vegas Seven. For a casino ad, it has resulted in a remarkable amount of commentary, which of course means they accomplished at least one goal.
This first ad didn't give us a look at the resort - none of it was actually shot on property. What we don't know is if they'll be following it up with more television advertising and what those spots could be like.
To my eye, the spot was squarely aimed at fun, taboo and youthful vitality (as well as those older folks desperately clinging to youth by any platinum card necessary). As we've seen in abundance since May 28th, when you target the Hard Rock / Palms crowd, it's very hard to filter who comes through your front door. Will this be a hotel full of Surrender patrons? Personally, I'm hoping the answer to that is no but we'll have to see - I bet some people are already planning how many rollaways they can get into a wrap-around.
Jeff's back and this time he's started up his own little 'gaming hall of fame/shame', picking the top and bottom of Las Vegas' operators for the past decade.
Would you rate 'em different? Reply in the comments.
This time on the show:
Podcast-a-palooza - Oct. 30th, 2010. Our guest will be Tropicana Las Vegas President Tom McCartney - all the details are available on the Web site.
* PENN Swallows M
* August Gaming Figures
* MGM May Sell Borgata ; Not Making Much Money
* Room Rate Survey Data
* Vegas Gang 'Sure Bets'
Check out the show: http://www.vegasgangpodcast.com
We're doing a Vegas Gang episode on Thursday so I guess I should just say thank you and leave it at that. This is great material.
Instead, I'm going to once again report on difficulty for MGM Resorts International - profits are still a Mirage - they just can't Wynn (get it?!? I'm so clever).
When a company does an early release of their financials and it includes several bullet points and a few paragraphs of figures, always read it in reverse. The most interesting stuff is always hidden behind a smokescreen of PR-speak.
The part of the company not infected with the virus that is CityCenter continues to deflate - down 13% for wholly owned operations (it was -16% last quarter). CityCenter may be a debacle but MGM needs the other places to keep the lights on.
As for Borgata, they did get an offer but it's below the amount they've been carrying on their books for the asset so they'll be taking a write-down this quarter to align their books with... well, reality. Will BOYD also have to do a write-down? I'd say probably.
When the Borgata thing is eventually settled, they'll not only get the cash from the sale but also their share of operations put into trust since the Pansy Ho debacle. That'll be one fat quarter when it hits but that's like when the drug dealer comes to your house and opens up his briefcase. He's not moving in, don't get too excited.
Say what you want about Borgata - and Atlantic City is certainly in trouble - but it is the top property there and has been helping to fill Jimbo's bank account every month. MGM may not have had much choice when it came to selling but that cash-flow is going to leave a hole of at least some size once the post-sale hangover wears off.
Interestingly enough, the day after we get news of improved Strip numbers (up 21%) for August, MGM reports taking an almost 10% hit in casino revenue for the quarter. How is that supposed to jive? This story cites baccarat as a bright spot but MGM's bac volume was down 6%. Does that mean that September cratered? Or were all these gains elsewhere? MGM still controls a huge percentage of the high-end bac play so this seems a bit odd.
As I previously wrote in my series on CityCenter, MGM is now going back to the markets for capital - they have loans of over a billion dollars due next year that they need to pay off. It will be interesting to see how much this influx of supply will impact prices on the open market. Much to the Swami's chagrin, stock was down 6% in after hours trading.
There is some good news, something else that I hinted at in my previous series - Aria is starting to swing over to the profitable side of the fence. It's had good volumes but this time around it got the hold percentages it needed to post a number in the black. ADR and REVPAR for Aria are both improving.
So I guess everything's fine...
So, after today's sale of the M Resort debt (which will quickly be converted into equity) to Penn National Gaming, where does that leave M Resort CEO Anthony Marnell III? Of course, that was the number one question I had after reading last night's rumors and this morning's news.
Well, we finally have the answer. Sort of. Ok, not really... But Marnell did talk to the Sun about his future role. Basically, he hopes he'll have one.
Apparently, he's spoken with Carlino and seems to have the equivalent of a 'good vibe' about the whole situation. Sorry Tony, that doesn't seem like much to hang your hat on.
Realistically, how could Carlino keep him in place? My guess is that PENN's plan is to look for some significant cost cuts and while Marnell may be useful in a transitory role, he's not a PENN guy and thus it's hard to see how he would fit into that puzzle.
Sounds like it's gonna be a pretty crappy weekend for Marnell but no matter what, I am certain we'll hear from him again soon. Marnell, Inc. should just buy the Rio back and be done with it. Harrah's probably won't even notice it's gone missing.
Peter Carlino and Penn National Gaming have been flirting with a Las Vegas purchase for what seems like forever. They were most often the ones mentioned when it came to MGM selling The Mirage (as long as you didn't believe the BS about Steve Wynn taking back his old now hand-me-downs).
The Marnell's built M for a cost of $1 billion (not counting another $240MM for the land it sits on). Today, Lloyds Banking sold that debt to PENN, including a $160MM note owned by MGM, for $230.5 million. Yes, 23 CENTS ON THE DOLLAR! That's an amazing deal for Carlino and crew, buying an almost brand new property that has been well taken care of since it was opened.
M's location may still be more challenge than opportunity but that will change in time. Carlino is seizing a great opportunity here and I'm sure this investment will pay off for them in the long run.
Penn is already licensed in Nevada so I'd expect this transaction to go down smoothly.
What will happen to the young Marnell? Sounds like he's out, no doubt looking for his next opportunity. He gambled on M and lost but I'm sure we haven't heard the last of him.
I think the real question here is what PENN will do to the place - they have a reputation for.... uh... being very... uh, efficient. I wouldn't be surprised to see some of the more interesting and costly little touches at M cut to bring costs down.
Wow, this is just too funny. It seems that the unique construction of CityCenter's Vdara creates a parabola that focuses the sun's rays, right onto the folks using the pool.
One guy in the story claims it singed his hair and there are supposedly melted plastic bags to prove how powerful this thing is. Even the employees seem to be calling it a 'death ray'. Of course, MGM is trying to play it down. The name they prefer: 'solar convergence'. Ha!
I try not to link to RJ stories but it's the only place you can read all the details:
You can't make this stuff up.
On a more serious note, will this have any impact on condo owners trying to get out of their contracts? I could imagine an enterprising lawyer including this in their complaint.
Sometimes you're having a crappy day and then you read something that's ridiculous enough to remind you that other people are perhaps even crazier than you. That's what happened to me with this story from the LV Sun.
It seems that brand owner Hard Rock Cafe International is upset about the way that licensee Hard Rock Hotel in Las Vegas has been marketing itself, specifically how it relates to their Sunday Rehab pool party.
When I think of 'hard rock', I think of Van Halen, Motley Crue and the like. Those guys were guilty of acts far far worse than anything that happens on that stupid TV show. This lawsuit just seems silly to me. It also cracks me up that the complaints in the lawsuit are from people that are offended by the reality TV show but apparently still watch it and are familiar with the details.
Is there another angle here? Is this just some kind of shakedown? Anyway...
Here's Jeff's latest column wherein he examines parents towing their kids through the casino, Tamares and what's happening at The Plaza as well as his take on how The Cosmopolitan of Las Vegas will fare when it opens in December.
The Plaza today announced they'd be laying off 400 workers as they close the hotel and part of the casino for planned renovations.
Tamares, the holding company that owns the hotel, spun this as the start of great things to come but come on - how many hotels shut down completely to renovate guest rooms? Clearly Downtown Las Vegas continues to struggle - other hotels like Binion's have also shut down.
The Firefly restaurant, part of the casino and the showroom will remain open. That's gotta suck for the Firefly though - great restaurant, cool space but now even fewer customers. It's usually half empty when I am in there.
This time on the show:
Podcast-a-palooza - Oct. 30th, 2010. Be there.
* CityCenter CityCenter CityCenter
* Vegas Gang 'Sure Bets'
Check out the show: http://www.vegasgangpodcast.com
This is the final part of a series about the problems that MGM Resorts International faces at CityCenter and how those problems may be impacting the important relationships they need to run their businesses.
Based on fascinating new insight into operations at the various CityCenter components, we dive deep into how the complex is doing and how bad things might get.
Please leave your comments on this post.
This is part two of a three part series about the problems that MGM Resorts International faces at CityCenter and how those problems may be impacting the important relationships they need to run their businesses.
Based on fascinating new insight into operations at the various CityCenter components, we dive deep into how the complex is doing and how bad things might get.
Please leave your comments on this post.
This is part one of a three part series about the problems that MGM Resorts International faces at CityCenter and how those problems may be impacting the important relationships they need to run their businesses.
Based on fascinating new insight into operations at the various CityCenter components, we dive deep into how the complex is doing and how bad things might get.
The other parts of the series will be posted later this week.
Please leave all comments about the series on this post. It's all after the jump.
Here's this month's open topic discussion for y'all to use if you'd like.
For me, one of the topics that's been fascinating for me to watch is the ongoing battle between Righthaven LLC and the rest of the world. After they sued Senate candidate Sharon Angle, the shit really hit the fan.
Steve seems to be at least partially responsible for this latest salvo.
What's my take on all of this? I pay a bunch of people to create content for me and I certainly believe in strong protections against it being used without my consent. That said, some of these cases seem like using an atomic bomb on an ant hill - a bit of an overreaction.
I'm fascinated to see how this shakes out, especially if the EFF gets involved and backs one of the defendants in an attempt to set some precedent.
Anyway, open topic away...
Jeff's back with more wisdom from his valley enclave. This time he's taking a look at the Fertittas and their situation with Station Casinos - a company they built, extended and then bankrupted.
How did this happen and what's coming next? More after the jump.
The Cosmopolitan of Las Vegas, currently rising between CityCenter and Bellagio, has solved one of its bigger pre-opening problems - the lack of an existing customer database.
They've decided to partner with Marriott on this, giving those existing customers a Strip outpost to use their rewards points and the Cosmo a large database to market to. It's not a player database but it is better than nothing.
The Cosmopolitan is joining Marriott's 'Autograph Collection'. View the other participating hotels here: http://www.marriott.com/autograph-collection-hotel/travel.mi
Late yesterday, just as we were recording the latest Vegas Gang (out soon), we got news that Harrah's Entertainment filed papers to publicly trade the 10% stake that investor John Paulson purchased earlier this year.
Of course, the plan for the HET LBO was always to re-emerge as a public company somewhere down the road but this is just a small chunk and it's coming at possibly one of the worst time to IPO in recent economic history.
In addition, the chunk is small enough that the company wouldn't be subject to all the governance rules that we're used to for majority public owned companies.
Interesting interesting interesting...
Jeff is back with part two of his take on the Downtown Las Vegas scene and what might help it turn around.
Keep reading after the jump and if you missed part one, it's right here.
In a totally unrelated thought - don't forget that we're giving away an iPad.
Yours truly has a piece running over with our good friends at VegasTripping.com about mobile apps in the hotel and casino industry and why they're all missing the mark.
I've closed comments here because I'd rather you comment over there on the story itself.
A bankruptcy judge has ruled that the Fertitta family will retain ownership of most of the assets of Station Casinos, Inc.
This was not really unexpected but I have to wonder - is this what 'should' have happened?
Clearly the Fertittas created a powerful empire over the last 20 years in Las Vegas but at the same time, they're at least partially responsible for the mess that the company is in now. Of course, the economy took a dirt nap in 2007 but it was their policies that left the company exposed and vulnerable, leading to a bankruptcy filing that wiped out billions of investor dollars.
If Boyd Gaming is to be believed, the bidding process heavily favored the insiders, partially due to some fine print related to the land under Texas Station. What really amazes me is that Colony Capital stuck by these guys through this whole thing given how much money they lost.
Even if it seems a bit slanted, it's hard not admire the ruthlessness of the Fertitta brothers in this whole thing. Where else but Vegas can you lose billions and end up on top? Ok, I guess Wall Street... and Washington... and maybe across the Valley at CityCenter... oh well.
Morgans Hotel Group reported that Hard Rock Hotel in Vegas saw earnings decline by 35% in the 2nd Quarter. The link to the Las Vegas Sun article is below, but the earnings reminded me of a nagging question I have on the Hard Rock brand. Does the brand still have the importance it did in the late 20th Century? Hard Rock's website says:
"Since its inception, Hard Rock has remained extraordinarily faithful to its original intentions. Its rock 'n roll sensibility - an HRC birthright - remains at the very center of all Hard Rock restaurants and all expansion efforts undertaken by Hard Rock International."
As we enter the second decade of the 21st Century, how many people, especially those younger than Baby Boomers, are still passionately interested in rock 'n roll and the memorabilia associated with it?
Hard Rock International is owned by the Seminole Tribe of Florida and operates the only two full casinos in the state, in Hollywood and Tampa. They are both well run resorts, but with limited gaming in Florida, they are on a par with the better locals casinos in Las Vegas.
Ten years from now, will the Hard Rock brand still be relevant? Since many readers here are younger than I, how do you see Hard Rock's future?
Harrah's Entertainment - Net Income: -$274 million (loss) Revenue: $2.2 billion More Info
MGM Resorts International - Net Income: -$883.5 million (loss) Revenue: $1.53 billion More Info
Boyd Gaming - Net Income: $3.4 million Revenue: $578.4 million More Info
Wynn Resorts - Net Income: $52.4 million Revenue: $1.0 billion More Info
Las Vegas Sands - Net Income: -$4.7 million (loss) Revenue: $1.59 billion More Info
This thread will be updated as other companies report.
We're back with another installment of 'Simpson on Vegas' and this time around, Jeff examines the situation in Downtown Las Vegas.
This is part one of a two part series. Continue after the jump for the article.
This morning Wynn Resorts pre-announced 2nd quarter results for their operating subsidiary that runs the Wynn Las Vegas / Encore resort complex on the Las Vegas Strip. These results do not include Macau operations.
The complete news release is here: http://phx.corporate-ir.net/phoenix.zhtml?c=132059&p=irol-newsArticle&ID=1449953&highlight=
The results clearly show that Las Vegas is struggling. Wynncore is arguably the very top of the market and compared to a year ago, they are taking a bigger loss. That said, occupancy and ADR don't look as horrible as they could have been. Despite increased occupancy, REVPAR was down.
I'm sure the folks at Wynn are looking down the road at CityCenter without a distinct lack of kind words - adding thousands of rooms into the market has only served to depress rates further (we're still waiting for an increase in supply to raise room rates, as some analysts have suggested would be the case when more rooms come online later this year).
The news release also mentions increased health care costs. Can't wait to hear another episode of the Steve Wynn vs. Obama Show on their next conference call.
Way back in 2006, Wynn Las Vegas bucked a long standing casino trend and decided to split casino dealers tips with their supervisors.
Since then, it has been the subject of much ink and several trips through various parts of the legal system. Today, the Nevada Labor Commissioner has spoken: no state laws were violated.
How long until other properties start to do this? Harrah's has already asserted their right to do this at Caesars, despite the fact they also say they're not planning to do so.
This is a big milestone in this case and a major setback for those fighting it. Expect appeals though, this isn't over.
July already? Time flies when you're thinking of Vegas.
The Las Vegas Sun has a story about a Las Vegas company which is placing commercials on idle slot machines. It looks like Palms is the only casino using this marketing product now, but I bet other casinos will follow. I don't want to be bombarded with beer, car or other ads as I'm walking through a casino. The ads don't have sound now, but how long until that changes? Less offensive would be infomercials for the casino's own offerings like restaurants, clubs, lounges, rooms, etc.
The next time any Las Vegas readers are in the Palms, let us know what you think.
Here are links to the Sun story and then the Reel TV site which has an informative introductory video.
Let's start June with a new customer satisfaction survey which shows The Orleans as the overall winner, and Venetian as the upscale winner.
Orleans Ranks High in Customer Satisfaction Survey
Think back to 2005 in Las Vegas.
This is when the main building blocks that are now Encore were being fleshed out. At that time, 10,000 hotel rooms were planned for the New Frontier and Stardust sites. This would make the planned Strip porte-cochere a very important part of arrivals at Encore.
Or so everyone thought...
Quick link to my complete set of 120 photos:
Also, my buddy Steve was long on the tour too and his take is here.
The rest of my write-up follows after the jump...
First off, a note - very excited to announce that Jeff Simpson will be writing a bi-weekly column for Two Way Hard Three. I'm very excited to have him on board!
* Encore Beach Club Opens
* MGM Mirage vs. Perini
* Atlantic City Numbers Down
* Tropicana Reborn?
Tomorrow marks the opening of the new Encore Beach Club and photos have started to leak out. The other day, we had some nice nighttime shots posted over at VT.
Today, we have a few shots from the recent 'play days' going on as they put the place through its paces. Thanks to Dave for submitting these shots.
I'll be on-site for a tour of the new facility tomorrow and will report back.
Update: Just finished my tour. The link to the photos is below, though I haven't had time to organize them yet.
What did I think? The place is gorgeous. Top notch, well built - just what you'd expect from Wynn. I need more time to process my thoughts but I have to say any concern I had is pretty much washed away. Yes, I still think Surrender's design is a little over the top but the pool complex more than makes up for it.
The four main bungalows have to be the nicest of their type on The Strip - complete with fully decked out bathrooms w/ showers. The balconies over the street are a trip. No Wi-Fi unfortunately, a somewhat strange omission.
At full capacity, the place can hold about 2800 people. That's big. That said, the indoor portion that is Surrender is fairly small, about Blush size.
At night, there's a light-show built into the walls - we didn't get to see it but they were very enthusiastic about it.
The gaming includes a craps table, which is a nice touch. Limits will vary of course.
The newly expanded Switch not only has a magnificent glass wall but now includes a full patio for dining.
Some of my photos: http://www.flickr.com/photos/lasvegas/
I did count more than a few Ed Hardy shirts in the line, which was pretty long.
NOTE: I was told that as recently as this week, some of these signs have disappeared. Word from MGM Mirage is that this doesn't indicate a change of policy, just a temporary adjustment of the signage itself.
Over the past several weeks, several bloggers and Las Vegas visitors noticed that at both Luxor and Excalibur, new signs had sprung up prohibiting guests from taking photos or videos in any of the two resort's public areas.
If you're interested in understanding and debating the new policy, continue after the jump.
Win an iPad! Details here: http://www.ratevegas.com/blog/2010/03/submit_your_veg.html There will be a live broadcast of some sort to award the prize on Thursday. Look for details here on the blog in the next few days.
NOTE: This recording got screwed up somehow and we lost a segment of the show. Apologies to my fellow panelists and to the listeners. We salvaged what we could. Enjoy.
* Wynn Resorts Discussion (partial)
* MGM Mirage Name Change
* Boyd / Station Drama Continues
* Taking Photos In Casinos / New Luxor Policy
NOTE: We recorded an updated segment on Wynn in Macau, plus Marina Bay Sands: http://www.vegasgangpodcast.com/2010/05/vegas-gang-special-wynn-episiode/
"Oasis at Gold Spike". Stephen Siegel has found his niche in Las Vegas. I hope he succeeds.
Oasis at Gold Spike, Downtown
Well, here are 88 photos of the Encore Beach Club construction site, taken last night and today, both from the ground and my 58th floor room.
Mike is back with Strip Walk and this time, he's heading into Palazzo, Luxor, CityCenter, Treasure Island, Caesars Palace and more.
Food reviews for Solaro (Palazzo) and Grotto (Golden Nugget).
Complete photo gallery is here:
Today, MGM Mirage pre-announced their first quarter earnings, two weeks early. These are subject to change but let's be honest, they probably won't.
Why would a company pre-announce? Typically they have some information that is out of alignment with what the market knows and wants to give it some time to absorb. Often it's bad news...
Let's look at MGM's announcement - keep in mind that MGM Mirage only owns half of the CityCenter joint venture (the good half?)
MGM has always been very helpful in breaking out their results by property. Unfortunately, it appears that they are reporting their 50% of CityCenter's results as a single blob - no way to know Aria vs. Mandarin vs. Vdara vs. Crystals. Hopefully we'll get more detailed info in the real quarterly filing.
Compared to the year ago quarter, this time they don't have the benefit of the TI sale nor the insurance income from the Monte Carlo fire. Also, they had to write down the residential inventory at CityCenter, all of which hurt them compared to 2009Q1.
What is interesting - the CCJV netted $24 million from poor saps that abandoned their deposits on residential units. Probably can't count on that cash for 2011Q1.
CityCenter is reporting an operating loss of $255MM in the first quarter, though $171MM of that is a charge related to the write down of the residential inventory. Aria's loss is pegged at $66MM, though most of that is depreciation expense.
Did you spend time at Aria and wonder why you didn't hear your neighbor in the room next door? Chances are, you didn't have one:
"Occupancy percentage at Aria was 63% with an average daily rate of $194."
Ouch. That figure, 63%, is pretty darn low. That said though, the $194 isn't too bad - you wonder if they had lowered rates more if they could have boosted the occupancy.
As a comparison, in the first full quarter Wynn Las Vegas was open, it had an ADR of $264 and 93% occupancy... Granted, 2005 was a very different time for Las Vegas so even mention that here is probably grossly unfair.
Their non-CityCenter results aren't great either - Adjusted Property EBITDA for the wholly owned stuff is down almost 20%. Table games hold was down (it was at the high end of the range in 2009), though volume was up compared to 2009. REVPAR took another hit, to under $100 at $94.
Because of the charges and the prior year having the TI sale, they swung from $355MM operating profit to an $11MM loss. MGM Mirage has worked hard to pay down its debt and that's starting to show in the results as interest expense decreases.
So - tough quarter for MGM but they have some cash and borrowing available so they'll probably ride it out just fine. Hopefully in Q2 we'll see Aria firing on a few more cylinders - hard not to think that if this bleeding continues that they'll shed some additional service folks and degrade the experience for the guests.
In other news, the company announced a private placement:
Long rumored but finally official - the Cosmopolitan project, wedged between Bellagio and CityCenter, will open (mostly) in the middle of December.
As the article below says, this is gonna be the last opening for awhile.
Vegas Gang is back!
Win an iPad! Details here: http://www.ratevegas.com/blog/2010/03/submit_your_veg.html
* Station Casinos Re-Org
* CityCenter's First Hundred Days
* CityCenter vs. Perini
* Atlantic City Mini-Casinos
* Closure of CalNeva
Hooters Hotel-Casino reported another loss in the 4th Quarter and said bankruptcy is a possibility. Hooters is the old San Remo on Tropicana.
Hooters Narrows Loss, Says Bankruptcy Possible
The development of CityCenter was notable for all sorts of reasons - a massive, expensive new development on The Strip is always a big story.
By now, everyone knows about the problems, most notably what happened with the stunted Harmon Hotel tower. Well, it seems that since the project is now up and running, it's time for the lawsuits to start flying.
As the Sun says - it could get ugly.
Station Casinos, currently working their way through bankruptcy, unveiled a reorganization plan that would sell off a large portion of the company's assets.
This would leave the Ferttita's in control of Red Rock, Sunset Station, Palace Station and Boulder Station, properties dispersed across the Valley.
Given that Boyd Gaming has tried at various times in the past 18 months to purchase some or all of these assets, it would follow that they would be able to unload these properties if they so chose.
Curious what would happen with Aliante and Green Valley, which are 50% owned by the Greenspun family. Do they have the financial means to buy the other 50%? Would they be serious bidders?
Macau's new Chief Executive, Fernando Chui, gave his first policy address March 16. He had been expected to announce stringent plans to slow the overheated gaming market in the Chinese region and announce steps to diversify Macau's economy. Gaming revenues increased almost 70% in the first two months of this year compared to 2009. Gambling accounts for about three-quarters of government revenue for Macau However, his comments appear to have resulted in a sigh of relief by major casino operators who already have a presence in Macau such as Wynn and Las Vegas Sands.
Reuters reports that Chui intends to limit the building of new casinos. This could help current operators' profits by protecting the market from oversupply of new casinos. Wall Street will give its opinion when the NYSE opens this morning.
To read Reuters:
Macau government to regulate the building of casinos
Wall Street Journal initial story (subscription may be requred):
Macau Gambling Industry Awaits Chui's Speech
Update: RJ's Howard Stutz weighs in.
Macau Curtailing New Casino Construction
Update #2: The market liked WYNN and LVS today. Wynn +4.48% and LVS +7.33%.
Las Vegas Sands - Net Income: -$113.9 million (loss) Revenue: $1.28 billion LV Sun
MGM Mirage - Net Income: -$434 million (loss) Revenue: $1.45 billion LV Sun
Harrah's Entertainment - Net Income: $295.6 million Revenue: $2.09 billion LV Sun
Wynn Resorts - Net Income: -$5.2 million (loss) Revenue: $809.3 million More Info
Boyd Gaming - Net Income: -$1.0 million (loss) Revenue: $384.9 million More Info
This thread will be updated as other companies report.
Steve Wynn wants to open in Pennsylvania, and it looks like LVS wants to sell Sands Bethlehem after only nine months.
Las Vegas Sands Corp. seeking to sell Sands Casino Resort Bethlehem
This time on the show:
* MGM's Aria - 2 Months In
* MGM Mirage Exits Atlantic City / Wynn Enters Philadelphia Market
* Greenspun / Station Casinos Relationship Disintegrates
* Lake Las Vegas Shuts Down
* President Obama's Remarks and Visit
* Harrah's Interested in The Palms?
Check out the show: http://www.vegasgangpodcast.com/2010/02/vegas-gang-44-february-25th-2010/
Feel free to leave comments below. Trivia questions can be sent to firstname.lastname@example.org - we might use yours on the show.
Vegas Mate, my Las Vegas travel guide for the iPhone and iPod Touch, is about to be updated again, to version 2.5. This will be the tenth update to Vegas Mate since it was originally released in August 2008.
What's new in this version? Nearly 13,000 words of updated or brand new content, along with some other tweaks and enhancements.
As I look at the future of Vegas Mate and other related apps (ahem, iPad ahem), I see good content as being right at the core of delivering a top-notch product. With that in mind, I hired my good friend, highly acclaimed freelancer Steve Friess to produce a few words (sometimes more than just a few) on virtually all of the hotels in the Vegas Mate database.
The result is a fantastic update full of a ton of information (some of which was new to me!) I couldn't be more happy with the way it has turned out and I'm sure you'll love it too. It's really fantastic.
My plan is to submit 2.5 to Apple in the next few days so it should be available relatively soon - maybe a week from now if the stars align properly. Vegas Mate updates are free to all existing customers.
In other news, I'm happy to say that a new Vegas Mate Web site is practically done (I cringe whenever I look at the current VM site). It features more info on the app as well as several screen casts showing the app in action.
Well, this seemed inevitable. MGM Mirage announced they are planning to divest themselves of the 50% stake they own in Atlantic City's Borgata.
The asset will remain in trust as they arrange a sale.
This time on the show:
* Fontainebleau + Ichan
* Resort Fees
* Harrah's + Planet Hollywood
* Harrah's iPhone App
* Vegas Gang Trivia Episode #1
Check out the show: http://www.vegasgangpodcast.com/2010/01/vegas-gang-43-january-21st-2010
Feel free to leave comments below. Trivia questions can be sent to email@example.com - we might use yours on the show.
According to the Las Vegas Sun, it appears that financier Carl Ichan will probably end up as the new owner of the Fontainebleau project, the hulking shell of a half-finished hotel looming over the north end of The Strip.
It's not clear yet exactly when, or even if, the project would be restarted.
Our own mike_ch is back with a 'mega' Strip Walk, including his first time at CityCenter.
As regular readers know, Mike is never short of opinions - you'll get his full take on the new MGM Mirage development as well as a boatload of photos.
This is a good one - you don't want to miss it. Enjoy.
Complete gallery: http://photo.ratevegas.com/Other/Stripwalk-January-2010/10930508_gxkui
Reader @mac78130 caught these, potential renderings of the Encore Beach Club project in Las Vegas.
We don't know if these are real or not but they do match the project as proposed, with a walk-way across the existing parking garage entrance. If they are indeed real, I assume the Wynn overlords will have these taken down soon so see 'em while you can.
The Las Vegas Sun is reporting that Harrah's will be launching an iPhone app sometime this month.
This sort of thing is inevitable - I expect more of this to come.
What's not really mentioned in the article though - GPS doesn't really work indoors. On the iPhone, it falls back to cell-tower triangulation which is not very accurate (it could tell you that you were on The Strip but not that you were specifically inside Caesars) - that's a problem that I combat with Vegas Mate too. I'd invest in high-quality interior maps if I could use them that way.
Now, the other way an iPhone can locate itself is through registered Wi-Fi access points - if Harrah's is installing and registering Wi-Fi stations, that would improve the ability to locate indoors (for Vegas Mate too - it all works the same way). That would be great for everyone.
The author also refers to the app 'text messaging' users. I assume they mean Push Notifications, which are like text messages but are not really the same thing. It's a pretty high level article so I guess the specific details aren't too terribly important.
I haven't tried the app yet but I certainly will. In the meantime, the far more comprehensive Vegas Mate is on sale this week for the bargain price of $1.99.
Update: Is this 'Caesars Palace' app on the App Store the app they're talking about? If so, it's already out... and quite basic. Looks like basically a brochure in app form. Also, it appears to download each screen of data as you move through the app. That means it won't work offline for iPod Touch users. If this is the app they're talking about, count me underwhelmed.
Very interesting item on the Harrah's blog today that ties into some of the things we've been talking about.
Basically, a post putting down resort fees and the resorts that charge them. I guess this means the PHo resort fee will be getting the axe sometime soonish? Theirs is pretty small at only about $5.
This time on the show:
* CityCenter Opens
* 2009 Recap/2010 Look Forward
* Gary Jacobs and MGM Mirage
Have a Happy New Year. We love you.
A few weeks ago I wrote an open letter to Vdara General Manager Angela Lester about problems I had during my stay. I'm happy to say that today I got a detailed, point-by-point response from Ms. Lester that covers each specific issue I raised.
All service operations have missteps, especially brand new ones. The thoughtful response indicates that they truly want to fix these problems and improve quality. I appreciate her taking the time to respond in full.
As for if I will visit Vdara again - certainly. While I prefer gaming properties when in Las Vegas, a Vdara firing on all cylinders could be a nice alternative.
Ms. Lester's response is after the jump.
Happy New Year!
Writing a piece for the Las Vegas Sun, mega-investor Phil Ruffin of TI has shared his vision for the future with the rest of us here:
His predictions are pretty safe: more people, uptick in room rates, and 'don't invest anywhere but The Strip if you want to be successful'.
If Ruffin has any real insights about the future, he's not sharing them here.
Both of my trips to Vdara were extremely problematic for me as a guest - stuff was broken, long waits, service issues, etc... I decided to write a letter detailing my experience to the hotel's general manager, Angela Lester.
I also decided to post the letter here, after the jump. If she responds, I will also make sure to post that as well.
I tried to be fair and this is not meant to embarrass the hotel but as a paying guest, this stuff shouldn't happen. Comments are welcome.
For my last night, I stayed at Mandarin Oriental... and am I glad that I did. This place is amazing.
Here are some photos: http://www.flickr.com/photos/lasvegas/sets/72157623031987786/
I'll be writing and posting all throughout the next week with my thoughts - for now, I'll leave it at these!
The coverage is rolling - http://www.ariaopening.com.
Also, I just uploaded 190 photos from inside ARIA to Flickr:
Got to sample some of the restaurant cuisine - so far great stuff. Lots of details to come but the staff here seem happy and excited - fun!
Update: Photos of two rooms at Vdara (I was moved to a suite due to 'issues'). http://www.flickr.com/photos/lasvegas/sets/72157623015555862/
Update 2: More photos of ARIA and opening night festivities: http://www.flickr.com/photos/lasvegas/sets/72157623025422570/
Boyd Gaming, who made an offer for some of debt-plagued Station earlier this year, has now said it wants to buy the entire company for $2.45 billion. Station Casinos is in Chapter 11 bankruptcy.
I can see how this would make sense - they seem like organizations with comparable goals and customer bases. Station rebuffed the previous offer.
This time on the show:
* Dr. Dave Tours CityCenter
* Hunter Stays at Vdara
* Jeff Explains How Harrah's Can Buy P-Ho
* Fontainebleau Drama Continues
A LVRJ article on the new trend (?) of sunlight being let into casinos:
Of course, Encore made a significant play for this and I think very successfully - parts of the casino are indeed flooded with light.
The author mentions CityCenter as an extension of this. My first impression walking through ARIA was certainly not that I needed sunblock. The casino is directly up against the porte-cochere glass doors in several places and light certainly spills in at the edges... maybe it's because the color scheme is mostly earth tones but it 'felt' dark to me.
There are certainly wonderful spots at ARIA, such as the main registration desk, the Harmon entrance and the entire promenade level, that are very well lit.
I hope this is indeed a trend that continues... Personally, I'd love to see a joint where the entire casino floor ceiling to be a skylight. Could be an amazing design feature, no?
I got a second chance to check out part of CityCenter's ARIA last week - I figured this would be a good time to share some of those thoughts.
The 4,004 room resort is the centerpiece of the project, including the only gaming space in the complex.
Continue after the jump for some additional thoughts...
This one was too odd not to post. Steve Friess has a blog post with a quote from MGM Mirage CEO Jim Murren where he says he doesn't really care if locals visit ARIA, implying it's the least important part of the complex (to him?).
This seems like an odd thing to say, the simplest reason being that ARIA has a killer spa, pool day-club and a bunch of high-end restaurants, let alone 150,000 square foot casino. It'll be interesting if he backtracks from this at all - almost sounds like it didn't come out right.
Update: It gets even better!
Dr. Dave Schwartz has blogged a bit about his walk through Vdara this morning. Also, his photos are available here:
Also, VegasRex has his own take, another interesting read.
I'll be at Vdara on Saturday to explore it more fully, along with The Crystals, before the big event in two weeks.
Update: Steve Friess lends some new pictures and thoughts about Vdara.
Three interesting stories breaking this morning:
Binion's to Close Hotel Tower - the legendary Downtown hotel has announced they will be closing the hotel tower and restaurant facilities as a result of the bad economy:
Harrah's Entertainment, who have been buying Planet Hollywood debt, is taking the process to the next step - Nevada gaming regulators:
Las Vegas Sands raised $5 billion in an IPO for their Macanese operations:
A story in today's Sun delves into Jim Murren's thinking regarding the design of CityCenter. It's an interesting look at the process and gives more insight into the man, someone that hasn't had a well-defined public persona beyond the quarterly conference calls.
Murren talks about CityCenter inspiring people to create art - that would be incredible were it to occur. Perhaps a modern-day Renoir will be so-moved by slot machines - I'm a little skeptical.
The author, Liz Benston, makes reference to people that have described CityCenter as "a themed version of New York as envisioned by a Manhattan transplant". That's one of the points I raised in my write-up of the site tour. Sounds like Murren would match it more closely with master-planning done in places like Abu Dhabi - perhaps that is more apt but I think the basic premise still holds.
There are some nice photos with the piece, including the Crystals/ARIA pocket park, one of my fave places in the complex (and it sounds like one of Murren's too).
Vdara opens on Tuesday. Hard to believe that we're finally at the finish line!
Update: A related update - the LA Times has some interior photos, though mostly specific textures and related design elements including some stuff I saw and some I haven't yet seen.
I love big cities. I'd much rather ride a subway than sit on a beach. I love museums and cultural events, great restaurants and urban activity.
New York is one of my favorites. If I had to live outside the US, I'd probably settle in London. I've been lucky enough to see Cairo, Jerusalem, Rome, Paris, Chicago, Istanbul and much of the rest of the world. Great cities are complicated, charming, messy, crowded, contradictory... and wonderful.
MGM Mirage is trying to replicate the best bits of those experiences in a new project opening soon on the Las Vegas Strip - CityCenter.
This past week, your humble host was given the opportunity to tour part of this new hospitality complex - 67 acres at the heart of the Las Vegas Strip, located between Bellagio and Monte Carlo.
My experiences on that tour are after the jump - enjoy. CityCenter will be a hot topic of discussion for months if not years. I can't wait until you all can share your own thoughts.
Update: We're not allowed to publish the actual map but Chuckmonster traced a copy and posted it on VT. This is the casino level and includes much of the stuff I saw on this tour. His version looks identical to the 'real' one. Enjoy. http://www.vegastripping.com/news/news.php?news_id=3019
This time on the show:
* Hunter Tours CityCenter
* Global Gaming Expo 2009
I believe we'll have someone from MGM Mirage Design Group on a future episode, not too far away. Feel free to submit questions here.
Perennial bridesmaid Penn National Gaming made a formal bid for the shut-down Fontainebleau project on the Las Vegas Strip today - the bid: $50 million. Bidding ends January 15th, 2010.
The project has incurred over $1.5 billion in construction costs and is estimated to require perhaps a similar amount to complete to original specification.
If Penn pulls this off, they'll have their first Las Vegas Strip presence - something they've toyed with for some time... If this does happen, Jeff Soffer is going to enter the gaming disaster hall of fame, right next to new-Aladdin developer Jack Sommer... Sommer? Soffer? Odd name similarity there... Anyway...
Update: Since this was written, Penn National has been outbid by a group lead by investor Carl Icahn: http://www.lvrj.com/business/fight-for-fontainebleau-72364182.html
I'm trying something a little different this quarter - a single thread to cover all gaming companies reporting.
I will update this thread as other companies report.
Wynn Resorts - Net Income: $34.2 million Revenue: $773.1 million
* Wynn Las Vegas / Encore Las Vegas: ADR: $210 Occupancy: 83.9%
* Wynn Macau: ADR: $263 Occupancy: 89.2%
Boyd Gaming - Net Income: $6.3 million Revenue: $398.2 million
The Echelon project will remain mothballed for three to five years.
Harrah's Entertainment - Net Income: -$1.05 billion (loss) Revenue: $2.28 billion
Harrah's is privately held.
Las Vegas Sands - Net Income: -$123 million (loss) Revenue: $1.14 billion
MGM Mirage - Net Income: -$750.4 million (loss) Revenue: $1.533 billion LV Sun
Station Casinos - Net Income: -$455.4 million (loss) Revenue: $255.7 million. Station is privately held. http://www.lasvegassun.com/news/2009/nov/16/station-casinos-loss-widens-reorganization-costs/
Interesting promotion from Planet Hollywood - you pay $600 and can stay 10 nights between now and March 2010, working out to $60 a night.
What makes this really interesting is that there are no blackout dates and the hated resort fee is waived.
For frequent visitors, these sorts of promotions could really save some money. Props to PHo for trying something like this.
Two interesting but unrelated stories this morning:
* Wynn Resorts will be paying a special dividend to shareholders and then start paying a regular dividend in 2010.
* CEO Dan Lee has left Pinnacle Entertainment, a Las Vegas based casino operator with properties in various US markets. Lee was Mirage Resorts CFO in a past life and partly responsible for assembling the parcel that is now CityCenter.
Posting both for the sake of discussion...
Well, Charles S. Monster has posted their planned response and I think it's just about perfect (except for Steven vs. Stephen - sorry, couldn't resist the nitpick).
As Chuck's partner in the referenced EncoreOpening.com Web site, I can confirm his origination of said term, which no doubt has entered our lexicon - I use it myself frequently.
I'm typically not one for boycotts or protests but there is no doubt that Wynn Resorts made themselves look a bit silly this time around. Maybe they didn't realize who the domain belonged to or its intended purpose. Let's hope that they buy into CSM's plan to reconcile - I'd rather see Twitpics of Macau than the inside of a courtroom.
Of course we'll all be watching to see what happens... and I'm sure I'll ask him about it on the next VegasGang.
Speaking of casino opening Web sites, we're reprising our Encore performance for ARIA... though we have a few tricks up our sleeve to amp it up a bit. Stay tuned.
Live from Vegas Podcast-a-palooza 2 @ The Palms.
We discuss CityCenter with our guest MGM Mirage Sr. VP of Public Relations Gordon Absher.
Feel free to add your comments below...
Las Vegas Weekly writer Richard Abowitz was on-hand this past weekend for our second annual Vegas Podcast-a-palooza at The Palms. The resulting article is now available online:
More after the jump...
Really cool video that David posted on Stiffs and Georges showing the interior of the FBleau project as it stands.
Does it look 70% complete? I know the last 30% would be basically all the finishes but it seems far off that mark to my untrained eye.
Video embedded after the jump.
I'll try not to go overboard on the 'Palooza stuff this week but I did want to mention that the good peoples at Planet Hollywood have been gracious enough to provide some potential prizes for Podcast-a-palooza guests.
Chuck has the details: http://www.vegastripping.com/news/news.php?news_id=2926
Thanks to them for supporting the event. One of their stars, Holly Madison, will be interviewed by Steve & Miles of The Strip Podcast.
Pulitzer Prize winning journalist Alexandra Berzon, in her new gig as a WSJ reporter, has a story up on WSJ.com discussing the Fontainebleau project on the North Las Vegas Strip.
The story examines one of the most looming issues for FBleau - there are potential bidders but the place will need $1.2 to $2.0 billion in work before it can welcome any guests - the numbers just don't pencil out.
That location, without all of the other projects that are now delayed or shelved, combined with the collapse of the condo market, means that the project is worth a mere fraction of what it would have been.
Prospective buyer Penn National Gaming may be ready to submit a bid - and it may be as low as $300 million.
We'll see how this all shakes out.
http://online.wsj.com/article/SB10001424052748704882404574465874047672190.html (Subscription Required)
I can't really imagine a scenario in which the project is imploded for a re-do - even at close to zero, it seems it would be cheaper to buy this and finish it... right?
Is there light at the end of the tunnel? Gaming stocks ended the 3rd Quarter with very nice share price increases. Now, what will happen when CityCenter opens?
New episode is up: http://www.vegasgangpodcast.com
* Planet Hollywood + Harrah's?
* Fontainebleau + Penn Nat'l?
* Stanley Ho's SJM
* Niche Marketing @ Monte Carlo
* Gaming Figures
Do you have questions for MGM Mirage's Alan Feldman? He'll be our guest at Vegas Podcast-a-palooza in October. Leave your question in a comment and we'll consider them for the show.
Bob Stupak, creator of Vegas World and The Stratosphere Tower, died today at 67.
Other media outlets can eulogize him far better than I can but I'll say this: even if his creations were not up your alley, the guy had a massive impact on Las Vegas as it is today.
Mike's back with another Strip Walk and this time it's all MGM, all the time.
Here's the complete photo gallery:
Read on for more...
MacauTripping is reporting that Dr. Stanley Ho, Macanese gaming pioneer and leader of SJM may have died. Reports are as yet unconfirmed but if it is true would no doubt have a major impact on the gaming industry in that region.
From what I have read, the path of succession for SJM is not clear - who will take over the company? Ho had many children, including those that are in relationships with foreign companies like MGM Mirage and PBL. Could Pansy Ho take over SJM? Can't imagine New Jersey regulators would love that, given their concern over alleged SJM activities in the past.
Update: So, it appears that Dr. Ho is alive and well - this rumor is unfounded as far as we can tell.
The news that Harrah's had started buying Planet Hollywood debt started fluttering around on Saturday and finally got some major coverage yesterday.
Basically, PHo has been hurting, just like everyone else. I'm sure Harrah's sees an opportunity to potentially pick up a Strip property at a discount, ala Tropicana AC or LV.
Potentially great business decision for Harrah's but I hope this doesn't come to fruition. As others have said, The Strip doesn't need more consolidation - it seems to be healthier and do better with more operators and more competition.
If this does go down, it would be interesting to see if regulators have more pause after the events of the last few years.
City Center isn't even open and it's already winning some green. By that terrible pun, I am referring to their LEED certification for Aria and Vdara, two components of the project.
This is a great thing - not only does the company get a tax abatement for up to ten years, it gets them a bunch of extra press and builds some additional excitement... plus, helping the environment isn't a bad thing either.
The latest Vegas Gang Podcast has been published.
* Encore Beach Club
* FBleu Sale Rumors
* City Center Condos
* Frank Fertita Jr.
Feel free to leave comments below. I feel like I was supposed to put something in the show notes and I can't remember what now...
Oh, here's the LV Weekly article on Vegas Mate: http://www.lasvegasweekly.com/news/2009/sep/03/sin-city-your-hand/
I'm not calling it a slot club because the company has decided to expand the offering - you get points for gaming but also rooms, dining and retail. Three tiers separate card holders, Grazie, Gold and Platinum.
This is a welcome change for Las Vegas regulars that enjoy a good 'two way hard three' but also drop significant change for deluxe suites and gourmet meals (are you listening, Wynn Resorts??)
Personally, I hope to see more of this permeate the gaming industry.
I saw the 'Prima' promotion from MGM Grand maybe a week and a half ago and didn't think much of it - at first glance I guess I didn't really get it... until I listened to the T&M Show (kinda like H&M but with some Replacements, more shoe-talk and less Scandinavians).
Turns out, the deal goes something like this: book at MGM Grand under this program and you commit to spending $500 on top of your room cost - basically a credit on your room account. In return, you get all kinds of deals and special offers during your stay including 2-for-1 drinks, 2-for-1 entrees at restaurants, VIP check-in, a limo trip, club access, etc...
This is interesting! I'm sure many people can relate to spending something in this range (or more) during a trip of a few days, especially if they concentrated their activity at one hotel and if show tickets are involved.
As far as I know, there aren't other deals of this kind out there, at least not explicit like this one is. Curious to see how this goes for them and if Prima is around in a few months.
As we've previously reported, Encore Las Vegas is looking at replacing the Las Vegas Strip porte-cochere with a new pool complex, tentatively named the 'Switch Beach Club'.
This rendering was presented tonight to the Clark County Planning Commission:
The complex should be open for next year's Summer season.
Thanks to @mtc for the higher-res image.
* Harrah's 'Street O' Shops'
* Monte Carlo Hotel 32
* Financial Reporting
* Random Banter
Feel free to leave comments below.
This morning, Nevada based MGM Mirage released their second quarter results:
A loss of $212 million for the quarter, along with lower revenues as well. Despite taking a big hit this quarter, some analysts believe MGM Mirage has turned their balance sheet around and should start to see some upside in the coming quarters. They miraculously were able to navigate a very difficult set of conditions this Spring without resorting to an asset fire sale.
Their massive City Center project opens in phases starting in October.
High rise condos are the subject of a story in the RJ. The concluding paragraphs summarize what many others have been saying:
"What is the end game for Las Vegas? Returning to its roots as an affordable and diverse entertainment destination, Nichols said.
"We became too much of the $500 bottle of vodka and multihundred-dollar room," he said. "We increased capacity at a higher price point when there was no demand for that. There's a direct relationship between price point and market share. If entertainment, rooms, and food and beverage get back in line, just like any service or commodity, that's when the town will rebound."
To read more:
High-Rise Plans Go Flat In Las Vegas
Las Vegas Sands, operator of The Venetian and The Palazzo in Las Vegas and several casinos in Macau, posted a loss of $171 million for the second quarter of 2009.
Looking at the details, they had two large one-time charges and without those, they'd have swung to a $22 million profit. Those charges include a non-cash impairment related to the shopping complex at The Palazzo, worth substantially less than originally thought.
LVS, which is building a new property in Singapore, believes it can realize $500 million in annualized efficiencies through cost cutting. They're not all that specific about what they want to do but that's a big number... I'm sure you intrepid readers could suggest a few things they could cut back on, no?
Las Vegas based Wynn Resorts reported their second quarter results this morning. Net revenues were below many analysts expectations but EBITDA was stronger than expected.
The press release is here:
Occupancy in Las Vegas is off almost 10 points from the year ago quarter and ADR is down to just over $200 as many recent visitors can attest to. REVPAR in Las Vegas was off over 35% to $188, though over 2,000 additional rooms are included in the figures for this quarter.
The stock has been trading up $5/share as of this writing.
Update: Fixed the poorly worded headline.
Not much detail but the troubled Las Vegas locals operator has filed for protection and reorganization under the bankruptcy code.
Station 'went private' in 2007 as part of a $9 billion deal.
Thanks to Mike E over at VegasTripping.com for catching this one - a multi-part video interview set with design genius Roger Thomas, Executive VP of Design at Wynn Design and Development as he was honored this past February in Las Vegas.
Thomas was responsible for many major Wynn designs at properties including Wynn Las Vegas, Encore Las Vegas, Wynn Macau, Bellagio, Treasure Island, Beau Rivage, The Mirage, Golden Nugget and more.
There's a story circulating that indicates Wynn Resorts may offer some shares of its Macanese operations on the Hong Kong stock market. The move could raise up to $2 billion.
The RJ has more: http://www.lvrj.com/blogs/stutz/Wynn_planning_IPO_in_Hong_Kong.html
A Union Gaming analysis indicates that Wynn Resorts' balance sheet is strong and that the cash is not required to meet existing obligations. If this is true, does that mean WYNN is playing it safe or about to embark on a new project?
Of course, Las Vegas Sands has floated a similar idea several times and never pulled the trigger.
My good friend Chuck @ VegasTripping.com published a new piece, talking about how social media and 'sponsored' conversations are impacting the way the casinos get their message out.
I encouraged him to publish this because I think discussing people's expectations is important as all of us publishers set our own standards.
I believe that in these sorts of things, transparency is a good policy.
Oh, and if you want to follow us on Twitter:
Also, our previous list of people tweeting about Las Vegas, which is only partially up to date at this point: http://www.ratevegas.com/blog/2008/11/tweeting_las_ve.html
There was a news story a few days ago indicating that Nevada regulators had decided to levy a fine against Planet Hollywood for incidents at the Privé nightclub including underage drinking and other offenses.
Today, an article in the Sun that compares the $500,000 fine with other agencies.
Update: The gaming commission approved the fine, as expected. In addition though, Clark County has denied the liquor license application for Privé. I'm not really sure how they can survive without booze.
The Sun weighs in: http://www.lasvegassun.com/news/2009/jul/23/planet-hollywood/
This week, Union Gaming is launching their daily coverage of gaming company financials, Heard On The Strip.
Now, the product is aimed at larger institutional investors, governments and hotel execs and is priced accordingly but Union Gaming breaking on to the scene is important for all of us that armchair quarterback the industry as well. Given how often these guys are quoted in local and national media when it comes to gaming, I expect lots of interesting insight from them as they grow their new biz.
Thanks again to Rich for coming on the show last week - really enjoyed it.
Episode #34 of the Vegas Gang is up: http://www.vegasgangpodcast.com
Rich Moriarty from Union Gaming is our guest.
* Harrah's and Station LBOs
* May 2009 Gaming Figures
* Las Vegas Sands Re-Starting in Macau
* City Center: Crystals Retail Information
Update: I mis-spoke during the show, indicating that Station filed Ch. 11. That's not the case, though they are still in negotiations with their lenders. I apologize for the mistake.
Fascinating article today in the Sun about the fast-paced world of design and construction on the Las Vegas Strip.
Cost overruns and safety issues at projects like Fontainebleau and City Center have highlighted the massively iterative nature of the design process, sometimes at the cost of millions.
A story today in the RJ about how MGM Mirage saved City Center.
Despite painting a rosy outlook at the time, things were very close to catastrophe.
This is a topic we touched on during a Vegas Gang show - I speculated that Murren and Co really pulled off a near-miracle in keeping the project intact. Knowing now that they did it without having to sell any additional Strip properties is even more amazing.
Happy to be back after a little bit of a break. Lots to talk about, as always.
* MGM Mirage Expands to Egypt
* Tropicana Atlantic City Sells to Ichan
* Fontainebleau Files Chapter 11
* City of Dreams Opens on Cotai
We know that all casino operators take their player databases and deliver offers based on the customer's profile - better customers get better offers, though sometimes it can be far more complex than that - bringing in a long lost customer, enticing some specific block. They use high-end relationship management software to pull these things together.
It becomes more interesting when an operator makes a mistake and the customer gets to see how they are classified in the database.
Over the past day or so, MGM Mirage sent out email marketing information for the Michael Buble concert on July 4th weekend. At the bottom of the offer, where it has the players name, it appears they accidentally included the account classification.
Here's what mine looked like:
I'm not sure what 'Mature Wealth' actually means - I'm 29 years old and haven't been staying or playing with MGM Mirage as much as I did a few years ago. Even when I had, I never dropped any large coin at their properties - it did make me chuckle though.
What's more interesting is that other readers reported tags such as 'Modest Means' - not sure if calling customers poor is the hook MGM was looking for to get people back on property.
Did you get this email? Any other interesting tags you're willing to share in the comments?
I guess the Luxor was just practice - MGM Mirage is going to put an MGM Grand branded hotel into Giza, the Cairo suburb home to the Great Pyramid.
I've been to see the pyramids and while they are impressive. I don't know if I can imagine an MGM Grand logo blinking in neighborhood.
An investment group lead by Carl Ichan has finalized a purchase of the Tropicana in Atlantic City. Ichan has gaming experience having previously owned interests in Arizona Charlie's and The Stratosphere in Las Vegas.
The AC Trop was forced into sale when the NJCC opted not to renew the license of previous owner, Columbia Sussex.
The price for Ichan? $200 million - that's 80% less than the $1B the property was expected to fetch. Amazing.
Mike is back with a Strip Walk for June 2009 including Encore, Palazzo, Treasure Island, City Center and more.
As always, the photo gallery is here: http://photo.ratevegas.com/gallery/8511233_PnJR7
Click through to read more.
Not a big surprise given the funding problems they ran into when the banks pulled their last $800 million but it's still worth noting that this is bad news.
Thanks to reader 'G' for sending this to me.
This RJ story has the details:
Even if they pump a $100 million into this place, it will still be the Trop. Don't get me wrong, it could go a long way to clean up the casino floor - new carpets, some paint, etc... but let's not pretend that all of a sudden people are going to mistake it for a five-diamond joint.
Trop 3.0 could do just fine targeting the mid-market.
I heard rumblings about the LVS Club Grazie policy a few days ago but completely spaced on it.
Chuck Mike E. @ VegasTripping did not and wrote it up: http://www.vegastripping.com/news/news.php?news_id=2715
This one is near and dear to my heart. I love playing the casino but I'm *sure* that over the years I've spent way more on hotel suites and fancy meals. I know I would personally benefit from this *cough* Wynn Resorts *cough*.
Hopefully this trend spreads as fast as the ultralounge.
Former Mandalay Resort Group executive Glenn Schaeffer is out as the top dog at Fontainebleau Resorts. This is another *major* blow for the company that is already struggling with financing problems related to its Strip resort.
The WSJ has an article about City of Dreams, set to open Monday on Macau's Cotai Strip.
At $2.4 billion, it's a very ambitious project and I know a lot of Macau-o-philes that are eagerly awaiting the doors being thrown open. Other than The Venetian, it's the second *major* project to open on Cotai.
Happy to be back after a little bit of a break. Lots to talk about, as always.
* MGM Mirage Pulls a Rabbit Out of its Hat
* Fontainebleau May Not Be Totally Screwed (we'll see)
* UNLV Center for Gaming Research Trends
* MGM Mirage Selling Properties
The results of the long-running New Jersey investigation into the suitability of Pansy Ho as a business partner for MGM Mirage has resulted in the department of enforcement recommending against.
MGM Mirage partnered with Ho on MGM Grand Macau and owns a 50% interest of one New Jersey property, the Borgata.
What happens next is unclear - maybe nothing. The Sun has more:
We sent Mr. Mike_Ch over to Mandalay Bay to see the new production of Disney's The Lion King.
He came back with a mighty helpful and dare I say insightful review.
Enjoy after the jump!
Despite the fact the LVRJ has misspelled the name of the resort (as of this writing it says 'Corporate layoffs begin at Fountainebleau, more cuts likely'), they do have an interesting story about layoffs at the under-construction Strip resort.
The private equity takeover plan that includes former MGM Grand exec Alex Yemenidjian seems to be moving forward.
MGM Mirage has proposed issuing some new debt and equity to raise up to $2.5 billion. Proceeds would be used to pay off other debts.
Part of the package would includes liens against Bellagio and The Mirage which translates into MGM not selling those places anytime soon.
As per an email marketing campaign, Monte Carlo will be introducing 'Hotel 32' in the coming weeks or months.
Details are sparse and MGM Mirage says they're not ready to divulge more yet but the images in the email seem to show a heavily upgraded 32nd floor, the top level damaged by the January 2008 fire. There may also be a special lounge on this floor for suite guests, though that's not confirmed.
Hotel 32 is expected to start accepting guests sometime in August of 2009.
Las Vegas Sands reported their first quarter results and as many could have guessed, they lost a little money this time around - looks like $87 million.
Wynn Resorts posted their first quarter numbers today:
Looks like Macau, sometimes the lifeboat for earnings, wasn't able to pull it off this time.
A very tough quarter for the Las Vegas based operator - 20% reduction in net revenue. To their credit, they don't sugar coat it - things are tough in gaming and these results reflect that.
If they hadn't had some of the TI sale figures in this quarter, things would have looked even worse.
REVPAR took a big hit - looks like they had to significantly drop rates to stabilize occupancy.
CSM at VegasTripping.com has posted some still images of Fontainebleau Las Vegas interiors that were captured from a video rendering. Chuck's post and stills are here:
The original video is here:
Chuck mentions in his post that it amps up his interest in the property a good margin. While I think some of it looks interesting, that overhead casino shot reminds me of a nicer version of Planet Hollywood. Of course, I may change my mind when I see it in person.
Still, very interesting. Hopefully this place is completed sooner rather than later.
Sad news this morning - long time Las Vegas headliner Danny Gans, who recently opened a new show at Encore Las Vegas, has apparently died in his sleep. He was 52 years old.
Gans previous show at The Mirage had a long successful run, as did his previous off-Strip engagement at The Rio.
While perhaps not known outside of Las Vegas, Danny Gans' show was one of the town's most popular.
I know Gans was married and had children. Very sad.
Update: Richard Abowitz has the Wynn statement: http://vegasblog.latimes.com/vegas/2009/05/breaking-vegas-headliner-dead-at-52.html
Update: Steve Friess spoke with Gans manager Chip Lightman: http://thestrippodcast.blogspot.com/2009/05/danny-gans-dead-at-52.html
After a very anti-climatic afternoon which saw MGM Mirage shares stop trading ahead of the closing bell, we see this news that MGM and partner Dubai World have hammered out an agreement, along with the lenders, to make sure CityCenter is completed and opens later this year.
It appears that MGM Mirage had to put Circus Circus and its land up as a lien as part of this deal, if construction costs go over.
Here's an open topic thread for y'all, primed with a report that LVS may be looking to sell Sands Macau and then operate it for for prospective buyer.
We're back with another episode! It can be downloaded here.
* Game Protection and the Future
* Casino Consolidation on The Strip
* MGM Mirage Selling Properties
According to the award winning Las Vegas Sun, Fontainebleau is suing some banks that apparently don't want to loan about $800MM that was promised to complete the project.
Funny, we were just talking about FBleau on the VegasGang today. Episode to be posted soon.
According to the WSJ, investor Carl Icahn and Oaktree Capital, a private equity firm, have been buying up MGM Mirage bonds and are pushing for the company to file bankruptcy.
More as it develops.
Update: WSJ link.
In 2006, before a cratering economy taught grown men how to cry, a Nevada holding company, Southern NV Rental Holdings, purchased dozens of houses around the Palace Station casino on West Sahara.
In that linked article, the Sun hypothesizes that Station Casinos was somehow involved in these purchases, perhaps for possible re-development in that area. That same holding company purchased other residential properties near other Station developments as well.
Well, it seems these houses are again for sale and whoever does ultimately own them seems willing to take a bath to get rid of them. The original article indicates a range of purchase prices, some in the $200,000 - $285,000 range. Many of the units are now listed at selling prices of $120,000 or less.
Is Station selling assets at fire sale prices to raise cash? Given the level of indirection with these holdings, we can't say for sure and the company didn't respond to my email request for a comment.
Update: Some more from the LVBP archives (thanks David!). Still not completely clear it is Station - could be a business partner that now wants to divest itself of land for a project that probably isn't happening anytime soon... or not. The delving continues.
It seems Dubai World has floated a proposal in the drama that is CityCenter.
Hopefully you can read that (I will post a free link when/if I can) but it basically sounds like they're saying that all the parties should agree to fund the rest of the project - you know, kinda like the original plan they had when they struck their deal in the first place.
Under this plan, MGM Mirage, Dubai and the banks would remove some of the contingencies surrounding the final $3 billion (every time, this number seems different) in funding required to finish the project.
Also, a different story from the RJ about MGM Mirage about the banks letting them continue to go along alone, without DW:
Many of you have already seen the two part interview with Steve Wynn that Jon Ralston did. If not, watch here:
Part One (LV Sun)
Part Two (LV Sun)
Now, along with giving insight into his political beliefs, one of the more interesting bits is the talk about Wynn shopping for assets on The Strip. We also discussed this on yesterday's Vegas Gang. Would Wynn buy Bellagio? I think the consensus is that he meant what he said - if the price is right, Wynn Resorts may be game. This should not surprise anyone.
Wynn says Las Vegas is better off with multiple operators duking it out. I totally agree and hope that one of the positive outcomes of this downturn is that we have better, more vibrant bare-knuckled competition on The Strip. That would certainly make my job more interesting.
Can't get enough of The Steve? He'll be on 60 Minutes this Sunday with a piece by my favorite interviewer, Charlie Rose.
We're back with another episode! It can be downloaded here.
This time around we discuss:
* February 2009 Gaming Numbers
* Listener Questions
Feel free to leave your comments below.
We will touch on this on the next Vegas Gang show but I wanted to post this for comments.
As is typical, the gaming figures have been released. They are of course, down.
Dr. Dave thinks the RJ is downplaying the bad news.
In related news, word comes that the Gaming Control Board is forming an internal crisis team to deal with bankrupt casinos.
Harrah's was able to pull off a debt swap that looks to have improved their position a bit.
Steve Friess has a very interesting photo post over at Vegas Happens Here:
I'd highly encourage checking it out for any Wynn and/or design freaks.
Sources are telling the Las Vegas Sun that City Center may be forced to file Chapter 11 bankruptcy tomorrow, if they miss an important financial payment.
This is also being covered by the WSJ: http://online.wsj.com/article/SB123811086468552891.html#mod=testMod
NOTE: This isn't a filing for MGM Mirage, just City Center LLC.
We'll see what happens here. It is unclear if MGM Mirage would be allowed to make the Dubai World part of the payment if they wanted to and if they did, it might not be in their interest to do so, even if they had the cash.
At this point, both companies are positioning themselves in a legal pissing contest for control of the project.
We're back with another episode! It can be downloaded here.
This time around we discuss:
* Casino Photography Rules
* MGM Mirage vs. Dubai World
* Tropicana / Chapter 11
* Las Vegas Sands in Macau
Feel free to leave your comments below.
We haven't had an open topic for some time so here goes...
One thing to kick it off: Dubai is suing MGM Mirage over City Center:
And the LVSUN:
Casinos have discouraged photography inside for ages - it's nothing new. This is usually under the guise of protecting their customers privacy.
Recently though, some have reported casino security taking a much harder line and in one case, a photographer was even detained.
VegasRex has been beating the drum on this issue for some time - if I recall, he even had a run-in himself. Some of his commentary is here: http://www.vegasrex.com/2009/03/22/photography-in-casinos-officials-respond/
The RJ is now looking at the issue as well, contacting Rex, the detained customer and a few security officials: http://www.lvrj.com/business/41647727.html
As someone who has taken literally thousands of photos of these places, inside and out, I have strong feelings on this. Now, I understand a private business can prohibit photography - I've been asked not to take photos - but the idea that this is some kind of security threat and that it could even possibly be a real offense is ludicrous.
Not much of a surprise given all that's gone on with the company - it seems they are going to use the bankruptcy laws to attempt to re-organize.
Not much else to say - just the latest step for Station as it attempts to survive a dramatic fall off of its Las Vegas business combined with the staggering debt load accumulated by going private.
MGM Mirage has posted their late filing of their results from the fourth quarter of 2008.
Summary from the company here:
Unless I'm missing something, seems like they intentionally left out some of the worse looking numbers, leaving analysts and readers to compute them for themselves. Loss per share of $4.15? Not good. Occupancy hovering in the 85% range - I was actually expecting a bit worse.
The language in the filing , likely required by auditors, is pretty stark - it spells out the trouble that MGM Mirage is in regarding financing the completion of their projects.
A conference call is scheduled for this evening and this post will be updated once I have time to read the whole filing.
Update: More from the WSJ: http://online.wsj.com/article/SB123732708930762149.html?mod=rss_whats_news_us
An article in the Wall Street Journal today discusses the possibility of more asset sales at MGM Mirage - perhaps enough that it may look more like a breakup of the company than just shedding a few hotel rooms.
(if that doesn't work, you can probably access through Google here)
While MGM Mirage shareholders might not love the idea of the best assets being sold off at potential fire-sale prices, maybe this would be good for The Strip and Las Vegas.
As others have said, when ARIA opens, will Bellagio suffer? If it had a different set of owners, they could compete head-on, full bore.
One thing is for sure - MGM Mirage has bet the farm on City Center.
They are writing down massive amounts of goodwill... plus, the properties aren't throwing off nearly as much cash as they used to.
According to the Las Vegas Sun, Australia's Crown Resorts is canceling their purchase of Las Vegas based Cannery Resorts:
The article references licensing requirements in the Commonwealth of Pennsylvania as a potential source of trouble.
Now, the deal isn't 100% dead - Crown has the option to consummate a deal with Cannery down the line, though it's far from certain now.
[Thanks to reader Mark D. for catching this one so quickly.]
Another week, another report of building problems left undiscovered by officials. Instead of City Center, now we have the neighboring Cosmopolitan, the property that can't seem to find a permanent owner having been taken over by its financiers after the developer defaulted last year.
The RJ reports: http://www.lvrj.com/news/41078077.html
With all of this talk about buildings not being properly checked during construction, I can't help but to recall these issues with Harrah's a few years back:
According to CBS Channel 8 in Las Vegas, Steve and Elaine Wynn are divorcing.
The couple are heavily involved in their company, Wynn Resorts. Both are on the board of directors and their decision making is visible throughout their projects. Elaine is often credited with many of the concepts that have evolved into major resort features, from 'Mt. Wynn' all the way down to the uniforms on the restaurant and cocktail servers.
Steve has often indicated that much of the design, be it guest rooms or public spaces, is heavily influenced by a female point of view. There's a much repeated story about picking glass based on how the color would make female customers look, an example of how important they consider these things. I'd argue that this has been a very big part of the successes they've seen in their resorts.
It's not clear if Mrs. Wynn will remain active in the company, though in the past she has indicated her intention to do just that. I've met her only in passing but from what I have read about her, she just seems like an incredible woman and I personally hope she remains involved.
Bill Weidner resigned as president of Las Vegas Sands today.
Not much more information is available at this time, though this seems unexpected and sudden. Las Vegas Sands has been hit especially hard by the economic downturn.
Is the Hard Rock looking through people's bags to enforce a 'no outside booze' policy? Seems crazy, right? Well I received an email from a reliable reader saying that they are doing just that, at least this past weekend.
This sort of policy is just as common as people ignoring it - most Las Vegas hotels frown on the practice and if you're walking around with a cooler or carrying a six-pack, you might see a raised eyebrow or even be questioned about it. From what I'm hearing though, the Hard Rock is going a step beyond this with security guards actually having customers open their backpacks, purses, and other bags to ensure that no outside alcohol is coming into the hotel. From what I am told, these searches are being applied unevenly - sometimes they're allowing folks to pass right through and other times stopping everyone.
After taking an informal survey on Twitter, no one had ever even heard of it being taken this far at other properties though HRH patrons confirmed that the hotel has been having guests sign a paper indicating an understanding of the policy for years.
Now, I am not a lawyer but this just seems totally upside down. Being private property, maybe there's nothing at all illegal about asking to go through people's stuff but what happens if you refuse? Do they throw you out? Does grandma have to let security rifle through her underwear?
I have a line into the hotel to see if this is official policy or just an overzealous shift of rent-a-cops. I'll update this post when/if I hear back - so far nothing.
Stories in the Sun and RJ today have word that Cosmo owner Deutsche Bank have decided to re-design the interiors of some floors, resulting in work stoppage.
Also, there's word that the bank may have signed a deal with Hilton to operate the hotel and/or casino portions - Deutsche does not have a Nevada gaming license and a recent deal with MGM Mirage seems to have fallen apart.
Two unrelated stories from the Las Vegas Sun.
First off, it seems Moody's are saying that Fontainebleau might be in trouble if they can't sell condos (insight!):
Then we also have Harrah's, a company struggling to avoid bankruptcy. They're attempting to re-structure their debt to avoid that scenario.
Let the good times roll!
MGM Mirage was due to file it's 10K quarterly report information with the SEC but instead, filed for an extension:
MGM Mirage is in an incredibly precarious position. If it cannot re-work its capital structure or sell off some additional properties, there may be no option other than Chapter 11 - almost unthinkable for a company that just a few years ago was the king of The Strip.
Principal shareholder Kirk Kerkorian has seen his stake shrink from almost $10 billion to somewhere just shy of $400 million.
Update: MGM Mirage's Jim Murren has sent a letter to employees about the company's financial condition: http://www.lasvegassun.com/news/2009/mar/03/mgm-mirage-chairmans-letter-employees-about-compan/
Boyd Gaming, who shut down their Strip project Echelon last year, is making a bid for a chunk of troubled Las Vegas locals operator Station Casinos.
For $950 million they would purchase Green Valley Ranch, Aliante Station, Texas Station, Wild Wild West and both Fiestas. Boyd has a large locals operation already that could potentially meld well with Station's offerings.
Update: There's some discrepancy over exactly which assets are included in the proposal. This LV Sun blurb doesn't mention GVR: http://www.lasvegassun.com/news/2009/feb/23/boyd-gaming-offers-buy-station/
Updated March 3rd: As of today, Station has rejected this offer from Boyd: http://www.lvrj.com/news/breaking_news/40660477.html
As most readers know, I was at the M Resort opening party last night... not as an invited guest but as a media person - I basically forced myself on the PR folks and they were gracious enough to give me the green light.
After spending three or so hours there on Sunday night and then another hour again today, I wish I could say it was awesome and that I was blown away. Generally speaking, I wasn't. There are some cool touches like the wine cellar, the pool deck and the pharmacy but other than that, I could have been inside Aliante Station (which also cost $400 million less to build) or GVR and not known the difference.
I don't mean to say there's anything 'wrong' with the place but by that same token, I did not see anything that would make it a recommended must-stop. In the boom times of years past, this would be another strong locals contender, easily in the same bracket as Green Valley Ranch or maybe even Red Rock but those times are long gone. It's certainly a lot nicer than South Point so the folks that live in the area should be pleased, though I think the only people living in the immediate neighborhood are lizards and coyotes - there is nothing but empty desert across the street.
I timed the trip from MGM Grand to the M - 22 minutes by car in moderate traffic on Las Vegas Blvd. It would no doubt be faster on the 15 but the point is that it is quite a ways from the resort corridor of The Strip. If they are trying to poach anyone from that zone, I wish them luck.
In the run-up to the opening, owner Anthony Marnell III has been making a big deal about recognizing the new economic reality. His implication is that the days of expensive hotel rooms and high end meals are waning. My inspection of his restaurant menus didn't give me much faith this philosophy has been implemented - $42 steaks with $7 baked potatoes sounds more like Bellagio prices than Value Central.
When I came back today, Marnell himself was walking the floor, fixing problems and attending to customers - that's great. With Strip casinos being run by large corporations and even the bigger locals operators filled with bureaucracy, it's refreshing to see an owner/operator involved at that level. The Las Vegas Strip is such big business that nothing happens that isn't PR approved and focus group tested - that means little to no innovation and lots of 'me too' copying (see nightclubs, ultra lounges, gourmet burger places, etc...) A directly involved manager like Marnell has an opportunity to innovate and I hope he does. Putting the pharmacy in the casino is a promising first step and his background in technology, a sector known for innovation, gives me hope we'll see them trying new and interesting things out there. The family did that at The Rio and I hope that trend continues at 'M'.
I ended up doing the rounds with Steve Friess and I'm glad I did because it made the entire thing far more fun. His write-up is here and I recommend checking it out if you're curious about the resort. Steve's a much better writer than I am (duh).
So - should you check out the 'M'? If you're in the neighborhood, sure. I think of Red Rock Resort as enough of a spectacle to be worth visiting from other parts of the Valley. Not sure if I would put 'M' in that category, at least not yet. The VP pay tables didn't look all that hot (lots of 8/5). Some of the restaurants looked interesting and the wine cellar joint is pretty cool.
Some new photos:
Update: David McKee has chipped in with more thoughts including from others that were there last night. Seems like opinions are all over the place for 'M'.
I took some photos at the VIP opening party for M Resort, located on Las Vegas Blvd. at St. Rose Parkway.
The party was a lively affair with most all of the restaurants open for tastings. The wine cellar was also open downstairs, one of the cooler parts of the property.
I'm going to go back to the casino again today to spend some more time there before I render an option. First impressions - some interesting restaurants and nice pool deck but a fairly unimaginative casino design. I still think some aspects like including an on-site pharmacy are brilliant.
We're back with another episode! It can be downloaded here.
This time around we discuss:
* Boyd Offers to Buy Station Assets
* Wynn Resorts Q4 2008
* iPhone Card Counting Software Makes the Rounds
* 2008 Gaming Abstract Figures
* M Resort Opens Sunday
Feel free to leave your comments below.
Wynn Resorts has released their financials for Q4 2008:
Not great, as expected. Still, not terrible. For the quarter, adjusted net income was $7.6 million, down from $82 million a year ago. Most of this decline is due to Las Vegas as Wynn Macau saw an uptick. They also took a tax charge, bringing the GAAP earnings for Q4 to a loss of $159.9 million.
While only online for a little more than a week in 2008, we get our first peek at how the company will be reporting Encore. It seems that they will not be breaking the WLV/Encore numbers apart. For the Las Vegas complex ADR was $281 and REVPAR was $224. Occupancy was down to 79.7% for the quarter - incredibly low.
Wynn Macau seems to be humming along nicely with a 35.6% revenue bump over 2007.
All the details are in the press release linked above.
Thanks to reader Anthony who pointed out this breaking story... It appears that the rumors may have some truth to them - this has been floating around for a few weeks without any substantiation.
It seems that Deutsche Bank may be looking to extricate themselves from the situation they find themselves in with Cosmopolitan by offering to help finance the rest of MGM's City Center project.
ARIA, the main hotel component at City Center, is taking reservations starting today. The first night for regular guests is December 17.
The Web site for bookings, which also contains some new renderings of the property and rooms is here:
Rates for opening night are currently at $299 (ouch) for what is normally a very very slow week in town. We'll see if those come down.
Reservations for Vdara, the condo hotel next to ARIA, are expected to open today as well [online here - thanks Mike P!] for dates starting in October. Not sure what it will be like to stay in what will still be a construction site in the delta between those two openings.
This is the first opening of a [ed: Las Vegas] hotel for MGM Mirage since the company was combined in 2000.
Not a new story but I've been out of commission for the past 36 hours... Looks like some analysts believe that Fontainebleau may run into some cash issues post open, later this year.
Mike's back with another Strip Walk column. He's got some photo links in his post but if you want to see the entire gallery, click here:
Continue after the jump to get your Vegas fix.
An interesting note in the 'Inside Gaming' column today - it seems that the Nevada Gaming Control Board is looking into reports that software for the iPhone and iPod Touch could potentially be used to cheat in casinos at games like Blackjack. Counting is not illegal in Nevada but using an electronic device to aid is.
There are many 21 training programs available on the iTunes Store, some that do include a 'counting feature'.
There's even some vague implication that the phones could be banned - which would be useless... All the various smartphones allow downloadable applications, not just the iPhone - that's nothing new. As they become more and more popular, customers will not stand for not being able to use their phones in casinos.
Game protection is important but these guys need to figure out how to do it without pissing the customer off.
Oh, and IG: iTunes is not a Web site, BTW.
BTW, if you're looking for something fun to do with your iPhone or iPod Touch, consider Vegas Mate (card counting not included)!
We're back with another episode! It can be downloaded here.
This time around we discuss:
* Atlantic City
* Las Vegas Economic Woes
* Tropicana Re-Brands as Value Property (!)
* City Center's Harmon is Stunted
Also, be sure to check out the new podcast from the UNLV Center for Gaming Research. You can subscribe to that here: http://gaming.unlv.edu/podcast.html
The Q4 2008 numbers are in for LVS - the first major operator to report their results.
Looks like an operating loss of $34.4 million, down from income of $133.6 million in the same quarter last year (GAAP). Adjusted, it's a $17.1 million loss vs. a previous year Q4 income of $71.1 million.
In Las Vegas, occupancy was 93.7% for the quarter - better than I expected (though not broken out by property). In Macau, occupancy was at 90%. While not providing figures, the company admits that the Four Seasons Cotai has been slower to ramp-up than they would have liked.
The company believes it can save $250 million a year through a new efficiency program (read: likely layoffs, hour reductions, etc...).
They have gotten their average borrowing rate down to around 3%, which is pretty good considering it used to be almost twice that.
We will no doubt be discussing tomorrow on our next episode of the Vegas Gang.
Updated: Management said that they don't see any market segment where they could really raise room rates other than perhaps in the group segment.
They are working to try to combat the recent national sentiment that seems to be pointing at Vegas based business trips as some sort of 'boondoggle'.
Thanks to Drambuie Man, y'all get to see some updated photos of what's going on in Macau, specifically Cotai.
Chuck is going to be posting these over at MacauTripping.com, starting with the Wynn Cotai site.
More to come over the next few days...
After rebar problems at The Harmon went unnoticed, Clark County is requiring MGM Mirage to assure them and the public that the structures at City Center are sound.
This article in the Sun:
and another piece in the RJ:
detail the process. Perhaps the biggest issue isn't that errors were made - that happens on job sites all the time - but that they still can't figure out how it happened and passed the various, required inspections. That points to a possible systemic breakdown in the evaluation process.
Updated: A story in the LV Sun today titled 'Adaptation or 'disaster'?' discusses what the Harmon changes will mean for the project overall - a very interesting piece.
After spending a few more nights at Encore in the middle of January, I'm sharing some more of my thoughts after the jump.
Along with this, I am still working on editing some additional audio that was taken during various media tours - a substantial job given the varying quality of the source material.
Continue on for a little bit more about Encore.
In what comes as no surprise to Vegas-o-philes, Station Casinos is restructuring their debts under bankruptcy protection:
If approved, Station would continue to operate under current management, though the equity partners have to kick in $244 million.
Station is one of the largest employers in Las Vegas.
Two unrelated but interesting stories:
Wynn Resorts has long prided itself on not laying off employees (though that does not seem to apply to the Wynn Design and Development sister company who recently shed several jobs). Today the company announced some measures aimed at keeping people employed, even if that means less pay, less hours and reduced benefits:
a little more from the LV Sun: http://www.lasvegassun.com/news/2009/feb/03/wynn-announces-salary-reductions-reduced-work-week/
In other news, the IRS followed disgraced Fry's executive Omar Siddiqui to The Venetian this week. They are investigating allegations of tax fraud. Siddiqui was a Las Vegas high roller at several properties for years.
According to this article in the Sun, the Tropicana has hired a branding/marketing firm to help them re-make their image to go after the value conscious consumer.
Perhaps a market that was becoming more and more under-served on The Strip but not sure if this was the lifeboat that customers were hoping for,
According to the RJ, an analyst at Moody's believes that recently privatized Station Casinos is about to run out of cash.
Given the operating environment, I wouldn't be surprised.
Elad, the company that purchased the New Frontier land to build a Las Vegas version of The Plaza Hotel, has been granted a 42 month (!) extension to their $625 million loan.
Hopefully for us all, the economy improves inside of 42 months.
According to the Las Vegas Sun, the board of directors of Las Vegas Sands, owners of The Venetian and The Palazzo on the Las Vegas Strip as well as several casinos around the globe have been sued for mishandling the company.
Apparently this is not the first time this has happened and suits like this not are uncommon when a company sees a dramatic drop in their share price.
Throwing open another open topic but I got this little nugget to kick around from reader Jeff in OKC:
"Is Bellagio cursed? I don't know of any curse, or any Indian burial grounds, etc., but, I think there's some bad mojo at the Southwest corner of Flamingo and Las Vegas Boulevard. Since the Dunes was built there in the 50's, all kinds of unusual problems have plagued the property. Design and construction problems abounded there in the 60's and 70's. But ownership seems to be the biggest victim of strange things there. From legendary mob control, to the Japanese financial collapse that led to Steve Wynn getting the land. Spectacularly, for our purposes, Steve Wynn built palatial offices for Mirage Resorts, which he had to give up when he got in a cash bind and had to sell out in 2000. I understand MGM moved their HQ to Bellagio after the buyout, and Terry Lanni took over the same office. Lanni, as well, suffered an equally amazing fall from grace in just a few days during November, 2008. If I were Jim Murren, I think I'd move HQ back to the MGM Grand. Any thoughts?"
Thanks to Chuck S. Monster and this link from MacauTripping:
It seems a local group in Macau is none too happy with the attention on Las Vegas Sands problems. As he said, fascinating stuff. I love how these guys are peeved about a perceived preference for Singapore.
What I'd love to see now is a lawsuit between Las Vegas Sands and protesters that want to picket outside Venetian and Sands Macau. That would be serendipitous.
Funny to see this story today in the Sun about the financing at Fontainebleau:
Just the other day as I was walking outside Encore, I was thinking to myself that it didn't look like much glass had been added to the tower at FBleau since December. Well, photographic evidence proved otherwise - my mind was just playing tricks on me and the glass is indeed rising.
When I checked out the visitors center there a few weeks back, there was a lot of construction activity in the low-rise portions. It is telling though that so far I don't think they will even sell you a condo - perhaps a chance they want to keep their options open?
The visitors area includes a large model of the complex, which does look interesting, as well as a model room. The room itself was nicely appointed - you can see Schaeffer and THEHotel written all over its style. Not quite as big as I would have expected, but then again, neither are the rooms at ARIA.
Vegas Gang #25 is online.
This week on the show:
* Harrah's Suspends Caesars Palace Tower
* LVS v. ELAD v. WYNN
* Rumors Swirling Around The Mirage Sale
* Encore Media Week
Leave any comments below.
For the past several weeks, rumors of a potential sale of The Mirage have been making the rounds. Personally, I've heard at least two different versions and one from a credible source, though no one that has claimed direct knowledge of a deal.
Today, Howard Stutz in the RJ has a piece that made the front page 'Breaking News' section on the persistent rumors:
In all the versions of the story I keep hearing, the buyer is always Penn National, with Pinnacle Entertainment a distant second chance possibility. The rumored price is typically between $1.2 and $1.5 billion.
MGM Mirage has consistently said that they evaluate all offers but they have nothing to announce.
Still, does this sale make sense for MGM Mirage? Without a dollar figure, it's hard to say but as Stutz indicated, if liquidity is enough of an issue to force this, I would have expected other assets to be divested first, such as the 50% stake in Borgata or perhaps something like Luxor. Of course, The Mirage may be the only asset that this buyer wants (and can afford - I'm sure they'd love Bellagio).
The Mirage has recently been significantly re-worked and would be a great Las Vegas starting point for a company like Penn.
And to those that keep hoping Steve Wynn would buy the hotel back - no chance (unless the price was super-low). He's looking one direction and that's forward.
UPDATE: As stated in the comments, the RJ link is dead and the home page now includes a note saying Penn Natl is not interested... At this time...
Thanks to reader Mark D., we have this bit of news from the LVRJ:
So, along with MGM Mirage's announcement last week about The Harmon being built without its condos, we have this. I hope they at least finish the shell so it doesn't look crappy.
Updated: The LV Sun chimes in: http://www.lasvegassun.com/news/2009/jan/12/caesars-palace-delays-opening-tower/
It seems an Israeli company wants to build what would be the world's largest hotel in Las Vegas, just next to the Hard Rock on Harmon.
The hotel would have 6,745 rooms and include a casino.
This is sort of a bizarre story... It claims that Elad, the company that purchased the New Frontier and plans to build The Plaza there someday, is supposedly asking Las Vegas Sands for financial help.
Does that make any sense to anyone? LVS has had more than their share of financial problems recently... what sort of help could they possibly offer?
Update: More from Bill Lerner via Steve Friess:
The new year's ongoing lead story will likely be CityCenter as it moves toward either completion or modification in 2009. The speculation about Harmon is followed today by Norm in the RJ raising issues about Veer:
"There are rumblings that MGM Mirage is close to announcing the status of the beleagured City Center project, including whether several buildings will be completed. There's talk that The Harmon, the Light Group's boutique condo-tel, with 400 hotel rooms and suites and about 200 luxury condominiums, will be delayed. The bigger concern, I'm told, is the central iconic tower, which was designed to lean about 22 degrees but is now almost double that because of a cabling issue. ..."
Vegas Gang #24 is online.
This week on the show:
Leave any comments below.
Mike is back with the final Strip Walk of 2008.
Yes, there's some more Encore stuff in here but most of the column is dedicated to the rest of The Strip - do not fear, Encore haters!
Enjoy. Main text and photo links after the jump.
The Las Vegas Sun has a story about the deteriorating financial condition of Station Casinos, the large Las Vegas locals market operator.
The company is facing $5 billion in debt that needs to be refinanced or restructured.
Many of my colleagues have also been writing about Encore and the opening festivities.
Here are some links not to miss:
I'm sure there's more good stuff - feel free to add to the comments.
If you didn't catch them last night, I posted more photos on Flickr - these will also be moving to a gallery on RateVegas.com shortly.
This will be somewhat brief - I will write a full review of this first stay probably later in the week - but I wanted to share a few first impressions, brought to you from Encore's 61st floor.
I was lucky enough to be given a guided tour this morning by Roger Thomas, VP of Design for Wynn Design and Development. He is responsible for most of the interiors of the resort, along with previous creations like Wynn Las Vegas, Bellagio and Treasure Island. He refers to himself as an 'author' when talking about the design process. Given how much thought goes into his 'prose', I think that's appropriate.
The tour was great - I took a lot of notes that I will transcribe later.
In a word I would describe Encore as breathtaking. It's much smaller - very intimate. It is a fantastic complement to Wynn Las Vegas. The casino, as many anticipated, is very similar to Wynn Macau with smaller chambered areas. Personally, I think this design is a huge win, though it might not work with a larger space. It's more appropriate for a smaller casino floor as they have here.
There are walk up bars on all sides of the property - Thomas told me this was in direct response to customers wanting more bars on the WLV side. One of the bars on the east end of the casino is a huge glass wall overlooking the pool, flooding the gaming areas with natural light.
For restaurants, we saw Sinatra (retro, 60s Palm Springs kinda vibe, but not in an old sorta way). Later in the afternoon, I watched them install the 1953 Best Supporting Actor Award in its display. It's gorgeous.
Had a quick lunch at Society Cafe Encore and it was really fantastic. Simple dishes but my chicken sandwich was perfectly done.
The Esplanade includes several high end boutiques, including a new home store featuring Roger Thomas' furniture. The Wynn and Company Jewelers on this side are displaying the 'Wynn Diamond', a 231 caret stone that is breathtaking to behold.
While not being much of a nightclub guy personally, we walked through XS and I was impressed. I think it's got a chance at being the top spot in town - the interplay between the pool and the club is amazing and sure to be a huge hit, likely to be copied elsewhere.
The Tower Suites lobby is tucked away from the casino floor, as it is at Wynn Las Vegas, while the main Resort check-in is open to the main walkway on the North side. Tower Suites is less of a preferred option at Encore, though the rooms we did see on that side were huge and amazing. The 2 and 3 bedroom, two level sky villas sounded impressive, though we did not get to tour one (yet).
They're being pretty tough about photos so far. I'm hoping that will ease up at 8pm when the place officially opens.
There's a ton of interesting design detail in this place - as much or more than Wynn Las Vegas.
More to come. Please follow us at EncoreOpening.com and feel free to ask questions to us there via Twitter or if you can't do that, leave a comment.
Also, room photos: http://www.flickr.com/photos/lasvegas/sets/72157611429036671/
Thanks to readers for pointing this out.
The Las Vegas Review-Journal has posted a few PR shots of Encore's interior. They include a couple of shots of the atrium and the spa. Others have rightly pointed out there's a lot of design cross over between Encore and the 'Villa Atrium' at Wynn Las Vegas.
Yesterday, as I was waiting in an interminable airport line, I got a call that came up as 'Wynn Las Vegas' on caller ID. That could have meant one of two things - someone was calling to yell at me about something I wrote or there was some problem with one of my hotel reservations - as many of my readers know, I'm booked at Encore for opening night and will be at WLV before that.
Well, it was the latter...
The call was from an Assistant Hotel Manager who told me that the room I had booked at Encore, a Tower Suites room, was not available and I would have to be downgraded. The explanation was that a 'computer glitch' had made the rooms available for sale when they should not have been. The manager said they 'just figured it out' and were making calls to people. Well, I booked Encore the first moment it became available (someone told me I was the second person to book online, after our friend Brian Fey). That was October 31st.
So, for a month and a half, these rooms (as well as the larger suites) were incorrectly available to book online and apparently no one noticed until December 15th. Uh-huh.
My currently unsubstantiated guess is that they got a better-than-expected RSVP from invited guests and didn't have the rooms to put them in, so they started to bump regular bookings down from the Tower to Resort side of the hotel. I'm working on getting a confirmation on my theory.
Now, I understand the casino is a VIP business and this can happen. Such is life. My first issue would be if I was lied to about the computer glitch in order to get me to 'go quietly' and accept the lesser room. I suggested upgrading to a larger, more expensive room but those were also not available. I wanted to have access to a few types of different rooms for photos and commentary for you fine people, hence my protests when the call came in.
My disappointment will subside. Life will go on.
What's interesting though is that as of now, it seems like people that booked through Wynn's Web site got short shrift compared to other methods. For instance, another reader here had booked through the American Express Travel Agency and thus far has not received a similar phone call about adjusting the reservation. Will he keep his more deluxe rooms?
If this turns out to be true, customers need to be careful who they choose to book with. The advice I've handed out to hundreds of thousands of site visitors - that booking with the hotel directly is often the best route - may no longer hold true in all cases.
Did other readers get the same call? If so, how did it go? What did they tell you? Did they offer you any compensation? I know that at least Brian was able to negotiate a dining credit as part of this downgrade so it's not a total loss.
This morning the news broke that MGM Mirage is selling Treasure Island, one of the resorts it acquired as part of Mirage Resorts in 2000, to investor Phil Ruffin. Ruffin sold the New Frontier site a few years back and is a partner in the Trump International condo development.
Also, this story in the WSJ:
This post was updated to flesh it out with more info.
Treasure Island holds a special place for me - I stayed there many times before it was 'upgraded', at which point I lost my case. I think it's a great asset that Ruffin will probably do well with. It has a hard time shining compared to The Mirage and Mandalay Bay as the lower end of MGM Mirage's middle tier.
Vegas Gang #23 is online: http://www.vegasgangpodcast.com
This time around we cover:
Feel free to leave any comments below.
We've been alluding to our upcoming coverage for the opening of Wynn's Encore for some time and now we're spilling the details.
We will both be 'twittering' (or is it 'tweeting'?) via Twitter, posting copious amounts of photos on Flickr and recording our observations for what I'm certain will be multiple blog postings. You can post your questions to our Twitter streams and we will do our best to answer them right from the casino floor.
To make it easier on your inner-Vegas-addict to keep up with everything, we're compiling it all in one place:
That's your one stop shop for all things Encore. The page updates itself so when the gates open, you can sit back and let the sweet nectar flow. See Chuck's note on browser compatibility here. His recommendations are seconded from this corner as well.
There's been some talk about doing a special 'Vegas Gang' episode and while the logistics of how possible that will be are not yet clear, rest assured that we will be getting everyone's opinion on Encore out to you as soon as humanly possible.
Mike_ch is back with his latest Strip Walk. This one is more in 'trip report' style as he was slummin' it down on The Strip for a few nights at The Grand.
It's a long one so grab a cup of coffee and sit back.
Robin Leach has come forward with a couple of supposed Wynn Las Vegas / Encore updates.
First is that Wynn wants to do a BeeGees musical at Encore, which may or may not be called 'Stayin' Alive'.
Second is that supposedly Wynn will break ground on a 4,000 seat 'Wynn Arts Center'.
I assume this would have to be out on the golf course side of things as there's little space elsewhere.
I should note that Leach has not always been the most reliable in the past. As some commenters suggest, it might be prudent to see what unfolds here.
It IS a difficult balancing act, cost control vs customer service. If the holiday season ends with a slow New Year's, the Strip's strategy of superior customer service may have to be rethought, but what is the tipping point at which customers rebel?
"In recent months, the profits of several big casino operators have fallen faster than revenue, or total sales before expenses. It's a sign that the companies have not cut costs deeply enough to offset the decline in their business.
On the Strip in the third quarter, MGM Mirage's revenue fell 9 percent, and earnings declined more than 15 percent over the same period in 2007; Harrah's Entertainment's revenue declined 12 percent, and earnings fell 17 percent over the same year-ago period."
It's official - Jim Murren has been moved into the CEO and Chairman slot at MGM Mirage.
No one needs to repeat that this is a very tough time for business on The Strip and Murren will not have an easy time of it.
Now, does this mean anyone ends up leaving MGM? Does Bobby Baldwin stay? Who gets the now-vacant COO job?
Update: Lanni has declined even a seat on the board. Odd. http://www.lvrj.com/news/breaking_news/35155994.html
Matthew Farley, author of "Good Food, Good Whiskey, and a Good Gamble: Outdated Nostaligia or Still Effective Today?" was kind enough to write up and share his thoughts after attending G2E in Las Vegas.
This dovetails nicely with yesterday's Vegas Gang coverage of the event.
Thanks to Matthew for sharing his insights - I'm sure you'll all enjoy this.
Click through for more...
Vegas Gang #22 is online: http://www.vegasgangpodcast.com
This time around we cover:
This is a special episode, focusing on the annual G2E gaming conference.
Feel free to leave any comments below.
Also, please consider voting for us in the Trippies!
According to the LVRJ, Station Casinos 'owners' (which party is not specified) have will be injecting between $450 and $500 million into the company to shore up its debt situation.
Similar to a move by Las Vegas Sands just weeks ago, it shows the difficulties that the consolidated gaming companies are having in this economy.
A slightly less basic than before Encore Las Vegas Web site is live:
Before the resort opens, not a lot of photos... Really, not a lot of anything. Still, more than the teaser we saw before.
I have to admit, I'm getting very excited for the 22nd and can't wait to unveil our coverage plans. I think you'll be pleased.
PS - Hey, Wynn Resorts! What's the official name of this property? I've heard 'Encore Suites at Wynn Las Vegas' but now you are promoting this as 'Encore Las Vegas', 'Encore at Wynn Las Vegas' and even just 'Encore'. What's the story?
UPDATE: Site is back online.
UPDATE: The TV commercial is on the site.
The Las Vegas Business Press sent a reporter in to City Center to work as a construction hire for three days. The write up is here:
Vegas Gang #21 is online: http://www.vegasgangpodcast.com
This time around we cover:
* Terry Lanni to Leave MGM Mirage
* Las Vegas Sands Financial Woes Continue
* Should the Nevada Gambling Age Be Lowered to 18?
* WSOP Changes This Year
Feel free to leave any comments below.
Also, please consider voting for us in the Trippies!
Terry Lanni, MGM Mirage's chairman and CEO, is planning to retire at the end of the month.
Jim Murren, COO, is being recommended for the job.
Whoa... Didn't see this coming. End of the month? That's not much time for a transition. Is he sick? Hopefully not [ED: a memo to employees says it is not health related].
I can't imagine majority shareholder Kerkorian would toss him during such a tumultuous time. They've worked together for ages... It must be something else... The timing is just so strange.
Update: MGM Mirage press release here:
We're discussing this on the Vegas Gang, which will be out later today.
UPDATE: The Wall Street Journal is reporting there are some questions about his MBA from USC as the school could not verify the degree.
After posting fairly dismal third quarter results today, Las Vegas Sands indicated that it should have deals in place by the end of the week that will give it access to over $2 billion in new capital.
The company recently informed investors that it was in danger of breaching debt covenants due to leverage issues.
The company is suspending part of its ongoing Cotai Strip development in Macau to focus on its two other projects: Marina Bay Sands in Singapore and Bethlehem, PA casino project. The St. Regis condo project on the Las Vegas Strip will also be suspended.
Harrah's earnings took a hit, as expected.
The RJ says they are going to work on cost cutting: http://www.lvrj.com/business/34137664.html
Also, from a newer blog that Dave Schwartz clued me in on, some info on AC layoffs: http://www.gamingatlantic.com/index.cfm/2008/11/7/Atlantic-City-Blues--good-news-too
As required by law, Las Vegas Sands filed a disclosure statement with the SEC today that indicates the company may not be able to maintain required leverage ratios which could put it in danger of a default.
A default could potentially lead to other action such as bankruptcy, though the company did not use that term in its filing.
Will Sheldon Adelson lend the company more money? Is he in a position to do so?
Will we see cuts at their resorts, in either staff or service?
UPDATE: The Las Vegas Sun has more:
Last night was the opening of the new Cirque du Soleil show 'CRISS ANGEL Believe' at Luxor. The show features illusionist Criss Angel's magic combined with the artistry that we know from Cirque.
Well, it seems that CDS' run of perfection may be over, at least if they don't end up completely re-working the show that premiered last night.
Many of the reviews are in and they're not great.
A friend said he had heard that Caesars Palace has mothballed the entire Centurion Tower due to lack of demand. Centurion Tower is 14 stories and opened in 1970. Can anyone confirm this?
Just got off the Q3 2008 call for Wynn Resorts. Final quarterly numbers are here:
On the call, the company discussed it's cash position (strong), it's future outlook and plans.
Encore is scheduled to open December 22nd, though it's still not 100% clear the first date that the public will be able to book a room. We should get that information in the coming weeks.
When asked about development on Cotai, Steve Wynn stated that they were waiting to see evidence that the current supply in Macau had been absorbed properly and at that time they'd proceed on that front. With The Venetian and Four Seasons on Cotai, the market does seem to be struggling somewhat to support the new properties, with the visa restrictions contributing to that.
It sounds like Wynn Resorts is in no hurry there - they plan to build what they describe as the world's most amazing resort and one would assume anything that fits that description will stand the test of time.
On the topic of purchasing perhaps distressed gaming assets, that pretty much was shot down - Wynn likes to build, not buy.
Overall, quite a bit of confidence from the principals.
Updated: As of this morning, Encore is accepting reservations from opening night (December 22nd). Yours truly will be there that first night, reporting all the details... We'll have photos, blog updates and live twittering.
Vegas Gang #20 is online: http://www.vegasgangpodcast.com
This time around we cover:
* Trippies 2008
* Gaming Stocks Slide
* Bellagio Turns 10 To Little Fanfare
* How MGM Mirage and Harrah's Market
Feel free to leave any comments below.
MGM Mirage announced their 3rd quarter results for 2008:
Profits are way down from the year ago quarter. MGM Grand Macau is doing a bit better and Bellagio had an unexpected uptick but generally, they're feeling the pinch as you can see in the figures.
This RJ piece indicates that Boyd Gaming is not sure when construction on their halted Las Vegas Strip project, Echelon, will resume.
BYD reported its earnings today (not great) and yesterday we got news that retail operator General Growth Properties is trying to sell off Las Vegas assets because it can't make the mortgage payments. Crazy times indeed.
After finally getting temporary certificates of occupancy for part of the structures at Encore, planning for the opening is starting to firm up.
We're hearing that Wynn Resorts staff can now start to use the hotel tower and new convention rooms with more to come as other areas are completed.
The other tidbit that's starting to leak out is that instead of a grand opening for Encore like the sort we're used to, the Company may opt instead to have a gala birthday celebration for Steve Wynn (his birthday is January 27th) to celebrate the opening of the hotel.
Yesterday Wynn Resorts put out a press release that once again mentioned that the hotel was taking reservations from January 12th onward. It's still not clear if we'll see any customers occupy the hotel before then.
The hotel has been taking reservations for weeks already but it's funny to see a bunch of news organizations parrot the press release and announce that the spigot has been opened.
Mike Ch is back with another Strip Walk. This one covers Encore, Treasure Island, City Center, The Mirage, Palazzo and more.
Photos are here:
Thanks Mike! Enjoy!
In what should come as a surprise to no one, Tropicana Entertainment has confirmed that the plans that would have put 10,000 rooms on that site are dead and any future development could be seven years away.
It's good to hear they want to put some money into much needed maintenance but if they think that putting a food court by the pool is going to turn this place around, they're insane.
David McKee posted this story today about potential financial problems at Harrah's Entertainment:
We also covered this at length in today's Vegas Gang episode that will go up in a day or so.
An article on the upcoming Aliante Station property opening in November.
As Dave Schwartz pointed out to me, 'contemporary Scottsdale' doesn't really sound all that awesome.
Dave Schwartz reminds us that 10 years ago today, Bellagio opened:
Pretty amazing it has already been ten years - and the place still looks great and is always one of the top earners in town.
Wynn Resorts decided to release preliminary third quarter results today at the close of the market.
At a glance it seems that Wynn Las Vegas will either squeak by with a $2 million profit or post a small $2 million loss. This is down from $35.8 million in the year ago quarter. Part of this is pre-opening expenses but mostly it sounds like lower EBITDA.
WLV ADR is down by $10 from the year ago quarter.
Wynn Macau is expected to clock in between $57 and $63 million, way up from the $39.2 million in the year ago quarter.
They're not offering much guidance given the economy and the Macau visa restrictions.
It seems like once again the Macau property salvages the earnings. The company reported having $1.7 billion in cash.
Las Vegas' long weekend is over... But that's not the end of the line for an industry that has bright days ahead.
Perhaps never more than now, Las Vegas gaming is run by people that are extremely competent and can weather the storm. These companies are mostly well capitalized with good banking relationships, even if they may have to adjust projections that were made in better times.
They are often diversified - granted some more than others - but even if we were to see something like a major Chapter 11 bankruptcy, the great midway that is the Las Vegas Strip is going nowhere.
People always need a place to forget their troubles and relax, in good times and bad. No one is better at that than Las Vegas. The electricity that draws me and so many others to come again and again cannot be shut off - it's part of the American psyche. Yes, we'll see a 'correction'. The seemingly endless acceleration of quality, luxury and prices will slow even more or even be put on pause. That's okay and consumers will welcome the chance at a bargain. They'll see rates and rooms that could have been priced much higher only months before and when things swing back the other way, they'll have tasted the best Vegas has to offer and want more.
Those that believe in Las Vegas will not stop investing in it. That investment might not be a new multi-billion dollar golf course redevelopment project in the near term but you better believe all that remaining Strip land will be built out in the future - it's inevitable.
Right now, you can get some of the best deals we've ever seen on casino industry equity - yes, the companies are not all in the same spot financially and some are probably better investments than others but I think you can count on nearly all of them to head north of their current trading prices.
Personally, I'm sick of the doom and gloom stories. Let's work on fixing the problems and move on instead of harping on disaster.
This long weekend may be over - and there may be a hangover - but the weekend will come again.
I'm betting on Las Vegas.
My good friend and fellow Vegas Gang-banger Chuck Monster from VegasTripping has been doing a bang up job covering what MGM Mirage has in store for us at City Center.
If you haven't seen these already, be sure to check out the following links:
City Center Tram:
VDara Pool Deck:
My friend and fellow Vegas Gang member David McKee put up an interesting post yesterday with a few updates on the status of the forced sale of the Tropicana property in Atlantic City.
We've talked about Tropicana Resorts several times on the Vegas Gang Podcast but it seems the news never stops... and for those not reading McKee on a regular basis, you're missing out.
Check out this YouTube video that combines Wynn's Encore renderings with construction photos:
Huge thanks to Mike E for tracking this down.
Also, this piece in the Sun on Encore:
Wynn talks about hoping to open on December 22nd if he can get temporary occupancy before that. In the past they haven't seemed as worried about getting that occupancy certificate so why this time?
The piece also talks about opening a couple of hundred rooms per day so I guess we have confirmation of the first Wynn soft opening, at least when it comes to planning.
The LVRJ is reporting that the Wynn Las Vegas dealers that sued to remove the tip sharing program have lost their appeal:
My friend Steve Friess has a note on his blog about the outcome of the Elad vs. Tamares case over naming use rights for "The Plaza" for a future resort on the Las Vegas Strip.
Give it a look. Also, Vegas Gang member Dave Schwartz was an expert witness in the case - expect us to touch on this in the next 'Gang episode.
Two quick unrelated items:
* EatingLV.com has a tidbit about "Switch", one of the new restaurants at Encore. Supposedly it will feature an internal environment that does just that - switches mid-way through the evening.
* Looks like Cher is having some health issues that will force her to cancel shows this year, which will no doubt hurt Caesars Palace.
Interesting article in the LV Weekly talking about the economic situation and it's impact on Las Vegas nightlife - we may see a swing to a more customer hospitable Saturday night.
Thanks to donnymac for pointing this out - a site with a bunch of renderings that I haven't seen, at least not all of them:
Once again, another StripWalk from MikeCh, this time covering South Strip properties (and a trip to the Hard Rock).
Continue after the jump to read the details, photos are here:
First seen on Twitter, the Las Vegas Sun now has a story about a robbery today at the Las Vegas Hilton.
George (Drambuieman) is back with another great report on Macau. Some info on CotaiJet, Ponte 16 and more.
Click through to read and be sure to check out the photos:
Vegas Gang #17 is online here: http://www.vegasgangpodcast.com
This time around we cover:
* Economic Update
* Kansas Update
* Strip Clubs in Strip Resorts?
* Mega-Resort Designs of the Future?
* ARIA Update
Feel free to leave your comments below.
MGM Mirage has started to leak the info on the restaurants that will be built inside ARIA, the main resort at City Center.
Two takes on the line-up, which is heavy on big names and maybe a couple of great restaurants:
Thanks to our friend George (Drambuie-man), we have a report on the construction of the Marina Bay Sands, the Las Vegas Sands project in Singapore.
Photos are here:
Continue after the jump to read more...
Thanks to reader Josh for pointing this out.
The LA Times has an article about tech at City Center's main hotel, Aria. The article includes a room mockup photo:
Update: This MGM Mirage press release has more info on all the tech going into the room. Some of it sounds pretty cool, though I hope the Internet speed is a bit higher than 128kb that they indicate in the release.
A nice piece in the Sun about the guys that developed the Eastside Cannery and Cannery Resorts.
The Mirage Volcano, a fixture on the Las Vegas Strip for almost 20 years, is being re-launched.
MGM Mirage teamed with WET Design (Fountains of Bellagio) to re-create the iconic front-feature.
WET brought in Grateful Dead drummer Mickey Hart and Indian tabla sensation Zakir Hussain to create the audio for the new volcano.
Scheduled to be unveiled later this year, we have a bunch of photos of the construction progress here:
It seems that the embattled Cosmopolitan Hotel project on the Strip has found a buyer after the bank foreclosed on the original developer.
Thanks to Mark D for pointing this out.
Also, some coverage in the RJ:
My friend Steve Friess wrote the other day about the closing of the 40/40 Club at Palazzo. Steve is a curious and thoughtful guy who isn't scared about political correctness when he writes - that's part of what makes him a great reporter.
Well, it seems some people took what he wrote the wrong way:
As someone that knows Steve a little bit, I can say with certainty that he was just positing a question - something for discussion (I suggest you read the comments on his story). That's what he does - he fosters discussion. If we can't talk about this stuff, we'll never make any progress.
Update: Steve has posted an update here: http://thestrippodcast.blogspot.com/2008/08/of-chicken-wings-and-irresponsibility.html
The next step for Las Vegas Sands' 'Cotai Strip' is the Four Seaons, opening next to the Venetian Macao (or Macau for any non LVS folks). Well, the opening has arrived:
This also includes the Cirque show, 'Zaia', opening at The Venetian Macau. Cotai Strip development may slow as credit markets tighten but things are now rolling with the inventory of rooms starting to build.
As Chuck at VegasTripping.com notes, the Eastside Cannery opens tonight.
I don't have this hotel in the RV or Vegas Mate databases yet and it brings me back to a question I've been asking myself for some time - should I remove a lot of the 'locals' joints from RateVegas and Vegas Mate?
Those pages get far less traffic than Strip and even Downtown properties and having them there means more upkeep and more data to clutter navigation. Is it worth it?
I'm sure I'd keep places like GVR and Red Rock and of course The Palms, Rio and other near-Strip joints. I'm talking about nixing the Fiesta, Texas Station, etc... If I'm going to do it, now is the time, especially for the iPhone app. Thoughts?
Mike Ch is back yet again - this time with a boots on the ground report from Planet Hollywood.
Our man on the scene braved the Palace of Earl to bring back some first hand intel.
As always, photos are here:
Also, he linked up some photos in his post as well. Enjoy after the jump.
As an aside, I'm well aware of how bad the photo gallery sucks. I've not had the time to do much about it but I actually think that might change in the near future. Stay tuned.
Word comes this morning that the 40/40 Club at The Palazzo is closing. This has been long rumored and many have doubted the place was doing very well.
In other Palazzo news, Lavo, the club from the creators of Tao, has opened. Lavo is notable because it is the center of ongoing litigation between the operators and Las Vegas Sands.
Fellow podcaster David McKee keeps us updated on the Kansas gaming process here at Stiffs and Georges:
Mike Ch is back with another Strip Walk.
This time he hits both ends of the Strip with Luxor, Echelon, Encore, City Center and more.
Photos are here: http://www.ratevegas.com/photo/gallery/august2008
A very interesting story from the LV Sun that covers how the timing of reporting can skew gaming win figures:
Regular reader Jeff from OKC wrote in to describe what seems to be a dwindling number of hotel and airfare packages available from the mid-west to Las Vegas.
Is this happening in other areas and how severe is it? As smaller carriers shut down or cut back on flights, how is that impacting the flow of people into Las Vegas in a time when it needs more visitors, not less? These are often subsidized, at least in part, by gaming companies - are these subsidies drying up?
As Jeff said, it seems like the worst time for it to be harder to get to town.
The RJ posted a story in which they confirmed tips they had been sent regarding City Center construction workers having alcohol before they entered the job site.
Perini, the site's main contractor, has a zero tolerance policy regarding alcohol and drugs.
Construction safety has been highlighted at City Center due to the number of construction deaths since the project began.
Another development in the saga of the Tropicana and Columbia Sussex. This time, the Nevada Gaming Control Board has recommended that the Las Vegas Strip casino be taken over by an unlicensed group of trustees as it progresses through bankruptcy.
What's interesting is that they are not licensed employees and that they say that CoSux head Bill Yung is no longer part of the decision making process.
This decision, as well as the recent stoppage at Echelon and other Las Vegas issues will be topics on tomorrow's Vegas Gang.
Here's a story from the Sun on today's reporting from MGM Mirage on their second quarter:
Some properties, such as Bellagio, didn't do as poorly as some might have guessed. Executives seemed bullish on the future.
The New York Times has a long story on Steve Wynn, Las Vegas and gaming in Sunday's paper. It doesn't break new ground for anyone familiar with Wynn or the industry, but it's interesting. The highlight for me was reading that Steve is irritated by the sound of rushing wind in the elevator shafts. The writer must not be familiar with the old DI. She makes it sound like Steve Wynn bought the homes around the property in order to build a golf course. Yes, he did, but the DI always had a golf course.
Read the story here:
The Chips Are Down in Vegas, but Steve Wynn Is Betting Big
This was rumored the past few days. It's too bad for Las Vegas and the North Strip. I hope they can resume construction in a year or so. BYD's Conference Call is at Noon today, so we'll get more information then.
NEW YORK, Aug 1 (Reuters) - Casino operator Boyd Gaming Corp (BYD.N: Quote, Profile, Research, Stock Buzz) said on Friday it has decided to delay construction of its new Las Vegas Strip casino called Echelon and suspended quarterly dividends.
The company also posted lower second-quarter profit as the U.S. economic slowdown reduced gambling revenue.
The company also said it has decided to delay the construction of Echelon due to the challenging economic environment. It plans to resume construction in three or four quarters, assuming credit market conditions and economic outlook improves.
Boyd Delays Echelon
Despite a softening Las Vegas market, Wynn Resorts pulled through with some strong company-wide numbers.
According to the Company: "Net revenues for the second quarter of 2008 were $825.2 million, compared to $687.5 million in the second quarter of 2007. The revenue increase was driven primarily by a 50.3% increase in revenues at Wynn Macau."
I'll have to listen to the conference call later - if there's anything good in there, I'll update the post.
Update: Listening to the call now - as Jeff indicates below, classic Wynn on display in the call. Lots of fun to listen to as he takes jabs at various parties - and he has the numbers to back him.
Here's a KLAS interview with Steve Wynn covering the Encore hiring, his take on City Center, Encore itself and more...
Thanks to Chuck at VT for pointing this out.
Today's Wall Street Journal (subscription required) has a great article on Sam Nazarian, new owner of The Sahara.
He wants to provide a superior experience, even for guests priced out of the market by the swing to luxury offerings - he plans rooms at about $200 a night. That doesn't mean implosion - he wants to work with the canvas he has, while adding to it and improving it.
It's a great read, check it out.
This week's Zoning meetings:
LVS is asking for a time extension on its approval to build a new Convention Center. The Agenda item says LVS is in the process of obtaining permits, but could the economy be a reason?
Las Vegas Sands Convention Center
Wynn has requested a deviation for Encore's signage:
The show is up:
This time we feature:
* Wynn Hires Tim and Tim / Wynn Early Financials
* Nevada and Illinois Post Bad Numbers
* Tropicana E.Coli Outbreak
* Don Barden / Pittsburgh
* MGM Mirage / Wynn Resorts Market Cap
Comments welcome below.
Don't forget the Podcast-a-palooza:
My friend Steve Friess posted a story on his blog about a supposed "hack" at MGMGrand.com that supposedly offered illegitimate low rates to customers.
Based on the email that went out afterwords, MGM Grand handed this poorly.
Also, I agree with Steve - based on all I know from years of building Web applications for e-commerce, this sounds like BS to me... If it is true, they were likely penetrated extremely deeply, which would be even worse. Just own the mistake and honor the rates already!
Updated: Steve has more details - not a 'hack' - just a promotion that was used by those it was not intended to be offered to. Still, maybe not the best handling?
Just saw this fly across the wire - Wynn Resorts has announced preliminary 2nd Quarter results:
Operating income at Wynn Las Vegas is expected to be $18-22 million, down from $63.4 million last year. Wow, big drop. Looks like they are blaming it on lower hold percentages, lower ADR, and lower occupancy.
On the other end, Wynn Macau did much better than last year it seems with operating income almost doubling to $100 million or so.
The company also announced they will be buying back more shares.
Mike's returning with a new Strip Walk. This time we see Fontainebleau, Encore, Echelon, City Center, Luxor and more.
Keep reading after the jump and check out his photos:
A surprising bit of news this morning.
"LAS VEGAS, July 2 /PRNewswire-FirstCall/ -- Tim Poster and Tom Breitling will be joining Wynn Resorts (Nasdaq: WYNN - News) subsidiary Wynn Las Vegas as Sr. Vice Presidents of Strategy and Development."
Vegas Gang #11 is online here: http://www.vegasgangpodcast.com
This time we feature:
* Encore at Wynn Las Vegas Opening
* Cosmopolitan Sued Over Its Name
* MGM Mirage Using Social Networking
* Harrah's Pays Debt With Debt
* Adelson Profiled in New Yorker
Feel free to add comments below...
My good friend and fellow 'Gang Member', ("yeah, I'm in a gang") Chuck has posted a bunch of new Encore construction photos:
Thanks to fellow Vegas Gang member Jeff Simpson for this link... Looks like the New Yorker has done a profile on everyone's favorite casino overlord, Sheldon Adelson of Las Vegas Sands. Check it out below. Also, props to Jeff for the mention!
Well, it looks like things have gotten just a little bit worse for the Cosmopolitan:
Hearst says they own the name. Ouch.
How about a little due diligence when you start a project, huh?
I just read this article from fellow VegasGang podcast member Dave Schwartz and I really enjoyed it. I think he's 100% correct.
The economics of Las Vegas have fundamentally changed (for the better) and a new 'cheapo-era' is NOT the answer to dealing with a (hopefully) short term problem.
Vegas Gang #10 is up - http://www.vegasgangpodcast.com
This episode focuses on the CityCenter walkout and the economy vs. Las Vegas. We cover a few stories on the specifics, including an entry suggesting that LVS is heading for Chapter 11. That may be an extreme outcome but its an interesting discussion point.
Also, a little bit on the iPhone and its impact on Las Vegas.
Enjoy the show and feel free to post your comments here.
UPDATE: Stiffs and George's has a story about Palazzo's underwhelming performance: http://www.lasvegasadvisor.com/blogs/dmckee/index.cfm/2008/6/13/Oops-he-did-it-again
The Las Vegas Sun is reporting on a workers strike at City Center, MGM Mirage's large development on the Las Vegas Strip.
Due to a rash of construction deaths, the workers are demanding increased safety provisions be made before work will start again.
Update: It's possible that work will re-start again soon - it appears Perini and the trades had a positive meeting.
All you readers probably realize that the 'parent' of this blog is our ratings site, RateVegas.com. We allow readers to rate and review hundreds of Las Vegas hotels, restaurants, nightclubs and more. It's been running since 1999 and has a huge database of worthwhile data.
Over the years, I've added several features designed to protect against malicious uses of an open system - I was getting a ton of submissions that were nothing but spam links to gambling sites. I track the IP address of each submission for the purposes of comparison (no personal info is tracked or stored unless you submit your email address).
Well, over the past few months I've noticed quite a few glowing reviews for Tao Nightclub at The Venetian. At first they looked legit but the wording from week to week was QUITE similar. I checked and of course they are all coming from the same IP - one that is registered to Cox Communications in Las Vegas, NV, the region's cable modem provider.
So, it appears that Tao, or someone working for them, is attempting to defraud the public with fake reviews posted through my service. I assume they're doing this elsewhere as well.
I mention this just because it is interesting. I'll do nothing more but delete the incoming fake reviews and continue on my day.
Any other site operators notice anything like this? Fake comments? Planted submissions? Are Vegas casinos, clubs and PR operations *finally* getting smarter about using the 'Net?
Also, a note to Vegas businesses that want to get their word out - I'm happy to listen to your pitch and I love sharing interesting stories and info with my readers. Just don't try to come in the back door.
The rumor floating around today is that The Related Cos has purchased/taken over the Cosmopolitan project on the Las Vegas Strip and it will be an outpost of the 'W' hotel chain. Time will tell...
Looks like Richard Suen, the Chinese businessman that supposedly helped Las Vegas Sands setup their contacts in Macau will get a pay day after all.
A Las Vegas jury awarded him $43 million in damages. The company will appeal.
This is good news that Tableau's Mark LoRusso will definitely move to Encore, and it looks like Tableau's space will remain a restaurant instead of becoming another club.
"Steve Wynn has lured another star chef to Wynn Las Vegas. Larry Forgione, a pioneering chef from New York, will move An American Place into the Tableau space this winter, when Mark LoRusso opens a restaurant at Encore, the new luxury suite hotel at Wynn Las Vegas. "Larry Forgione was one of the first chefs to focus exclusively on American ingredients and cuisine," Wynn said. "His vision and commitment to sustainability paved the way for many of today's chefs." ..."
Norm Column in the RJ: Norm
As speculated, the name 'ARIA' is official.
MGM Mirage's press release had a bit more info than I've seen published elsewhere. I don't usually just publish these things but I think this is of interest so continue reading after the jump.
Vegas Gang Podcast #8 has been posted:
Comments can be posted here on this site, below.
Our guest is Steve Friess and we cover his book, 'Gay Vegas' as well as Las Vegas marketing, MGM Mirage splitting up, casino cheating and more.
My good friend Chuck at VegasTripping.com is just back from Las Vegas and wrote up a little report about the transition at Luxor:
Yes, we're back (and better than ever?).
Anyway, the episode is posted here: http://www.vegasgangpodcast.com
MGM's 1st Quarter Conference Call transcript is available:
It looks like the 'chickens are coming home to roost' for Tropicana Entertainment - in our pre-call bater for Vegas Gang, Jeff Simpson tipped us off to this story.
Thanks to Chuck for the link.
Shadow Creek, MGM Mirage's fabulous golf course located in North Las Vegas, will close for a few months for an extensive renovation.
The press release is after the jump but basically it says that it will close until December while original architect Tom Fazio looks over the changes.
Thanks to globalcasinoboom.com for this interesting story that talks about Wynn Resorts potentially managing or consulting on a casino from Arusze in the Philippines.
Yes, the property formerly known as 'Wynn Diamond Suites' has been renamed 'Encore at Wynn Macau'.
Thanks to VegasTripping for the tip and also a photo of construction:
Yes, this is a few days old but we need a story to cover it and I was out.
LVS - Las Vegas Sands had an unexpected 1st quarter loss which has caused the stock to tumble. Slow ramp up for Palazzo in Vegas and a new weakness in Macau seems to be the culprit. Some numbers here.
WYNN - Wynn Resorts did better than expected on revenue but it looks like it missed on EPS. I am hoping to have some more time later to get deeper into these figures and listen to the call playback. http://www.thestreet.com/s/wynn-posts-mixed-quarter/newsanalysis/leisure/10414810.html?puc=googlen&cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA
The LV Sun gives us a glimpse into CityCenter Casino's server-based slot floor. Will players be apprehensive about a casino's ability to manage the games, denominations, paybacks and players' comp accounts from a central IT office? Or, in this age when everyone, including seniors, are at ease with computers, will the benefits be welcomed? In my opinion, it will be a huge success as long as players don't believe the casino can manage payback with each spin of the reels. This concern can be easily managed with strict controls from gaming regulators and through effective communication strategies by casinos. What does everyone think?
Server- Based Slot Floor At CityCenter
Mike_ch is back with the latest Strip Walk. This time we have a look at Encore at Wynn Las Vegas, Caesars Palace, New York New York and Luxor.
Notes after the jump, photos here:
On the most recent episode of The Strip Podcast, Steve Wynn talks about his ultimate plans for the golf course - two new hotels for a total of 10,000 rooms (including WLV and Encore) and a 1.5 million square foot convention facility.
Clearly, this would put Wynn Resorts in direct competition with the various other convention centers in town, most specifically Las Vegas Sands and their Sands Expo. No specific timeline was given for the development.
KLAS-TV has a three part, 30+ minute interview with Steve Wynn on its website. The audio is so poor that I haven't listened to it yet. I'll need headphones, but for Wynnophiles, it might be interesting.
KLAS-TV Interview With Steven Wynn
I really should have posted this earlier as it is a fascinating story.
It seems a gentleman that allegedly helped Adelson's company get into the Macau market believes he was promised more compensation than he has received (nothing so far).
Well, now he's suing the company in a Nevada court. Should prove a very interesting exercise.
The rumors are true! Gans will move to Encore when it opens, leaving The Mirage.
What's funny is that Wynn denied this point blank to Steve Friess in the last interview.
The story says it all - at least some of the doom and gloom is true enough to scale back.
Thanks to Brian and Detroit for pointing this out.
Harrah's Entertainment, the recently gone-private casino behemoth, has decided to change its name - to Caesars Entertainment. Fun.
A Las Vegas-is-gonna-go-bust doom and gloom article from the Times Online in the UK.
The Wall Street Journal follows up on the condo-hotel bubble, and focuses much of the story on Residences at MGM Grand and Trump's new tower. The story should be available without a subscription:
"It's been a very bad investment," said Moji Adekunbi, a 47-year-old engineer, who bought a $550,000 condo-hotel unit in the Signature at the MGM Grand in 2005 in Las Vegas, where one of every four hotel rooms being developed is a condo-hotel unit. Mr. Adekunbi counted on the cash flow from renting out his unit more than covering his $3,000-a-month mortgage payment, leaving him with a tidy profit.
He said the developer's sales staff led him to believe that the hotel would have 94% occupancy and $350-a-night rates, Turns out, he said he is netting only between $400 and $1,800 a month before his mortgage payment."
Condo-Hotel Buyers See Investments Sour As the Market Weakens
Episode #5 of the Vegas Gang has been posted below:
This features Tom Breitling, formerly of the Golden Nugget, talking about his new book. Enjoy!
Steve Friess chats up Steve Wynn for this weeks The Strip Podcast and there is no shortage of great quotes, particularly near the end when he gets into Adelson's claim that at one point he had offered Wynn a job.
I assume the show will be posted sometime Thursday. It's certainly worth a listen, along with a few bits on Encore and the Binkley book, "Winner Takes All".
Thanks to a tip from David McKee comes this story about convention attendees at the Westin Casuarina who, when the convention organizer failed to pay their bill, apparently had their cards charged by the hotel to cover the loss.
If this is true, it is insane. Hopefully we'll hear more on this. The quote from the LVCVA is funny.
Some may recall that before the 're-opening' of the Aladdin as Planet Hollywood, I was quoted in a London paper by writer Steve Friess and gave a less than stellar prognosis for the troubled property. That subsequently lead to an exchange between Friess and Hollywood principal Robert Earl.
Anyway, as I said all along, I have nothing against the property or its operator and here's a story that indicates their strategy is indeed working, pulling PHo back from the abyss that was the Aladdin. For the sake of healthy competition, I hope we see this continue. Congrats to them for hard working paying off it seems.
Two important stories on LVS:
Why would Sheldon Adelson make such public comments about MGM, Pansy Ho and Atlantic City?
Sands Chief Questions MGM Mirage's Motives
What is the real story on CFO Rozek's departure from LVS?
Robert P. Rozek resigned from his position as Senior Vice President and Chief Financial Officer of Las Vegas Sands Corp
It looks like the Crown Las Vegas project, which was to be a super tall hotel tower at one point, is dead - at least in its current incarnation. Something will be built there someday, the question is what.
According to the WSJ (sorry, registration required), the Related Companies, no stranger to distressed Vegas developments, is looking at the Cosmopolitan project.
Thanks to Brian for the tip! Happy Easter!
Steve Friess picked up on the news from Wachovia that Elad is putting the Plaza Las Vegas project on hold due to the challenging credit market:
Very interesting, especially coupled with the Cosmopolitan news. Friess apparently just did an interview with Steve Wynn where the casino mogul predicted this.
Update: Elad, the developer, is denying the report so at this point this is in question.
Here's another Vegas book, but I'll skip this one:
We talk the concept of 'free' and casinos, lots of fresh details on Encore at Wynn Las Vegas, Majestic's Vegas numbers, and more. This is a don't miss for Wynn fans.
The participants include:
David McKee - http://www.lasvegasadvisor.com/blogs/dmckee/
Dave Schwartz - http://www.dieiscast.com
Chuck Monster - http://www.vegastripping.com
Direct Download: http://media.ratevegas.com/37-VegasGang03062008.mp3
Winner Takes All, a new book by Christina Binkley will be released on March 4. Binkley was formerly the casino/gaming reporter for the Wall Street Journal.
Winner Takes All: Steve Wynn, Kirk Kerkorian, Gary Loveman, and the Race to Own Las Vegas
Dave Schwartz has an interesting article where the talks about a piece from Wired that is discussing the proliferation of free services in business, especially on the Internet. Dave spins that into a gaming business narrative and breaks it down for us.
Wynn Resorts have settled on December 2008 as the unveiling for Encore Suites, the sister resort going up next to Wynn Las Vegas.
Few new details besides the opening timeframe are in the press release, though it does allude to many of the features we've already covered here in the past.
We're back with roundtable #2 - this time around the topics include Crown investing in Harrah's/Station, MGM Grand Detroit, Pure being raided by the IRS, Cuba as the next Macau and more.
The participants include:
David McKee - http://www.lasvegasadvisor.com/blogs/dmckee/
Dave Schwartz - http://www.dieiscast.com
Chuck Monster - http://www.vegastripping.com
Direct Download: http://media.ratevegas.com/36-podcast_02212008.mp3
Some info on MGM Mirage's quarterly results, announced today:
This is still breaking but it seems like the Feds raided Pure, the nightclub at Caesars, today.
Pure is not run by Harrah's, it is a separate entity.
Wynn Resorts just reported their results.
That's the press release. I'll update this with some thoughts as soon as I have a chance.
Las Vegas Sands hosted an Investors Day on February 11 in Las Vegas. Management presented detailed information on the company's operations in Las Vegas and Macau as well as on other projects being built or planned both in this country and overseas.
One important announcement was the plan to build a New Sands Expo at the corner of Koval and Sands. Once the facility opens at the end of 2010, the land that the existing Sands Expo Center sits on could be used for another resort or other purposes. The site is 20 acres and is part of the Venetian/Palazzo complex.
The Investors Presentation is available as a webcast and as a slide presentation. The slides of the New Sands Expo and of the 20 acres for future development are very interesting.
Baccarat to be offered on private flights to and from Asia:
The first episode of what could become a new, semi-regular podcast has been posted.
It doesn't yet have a name but the working title is 'Vegas Roundtable'. It's a gaming industry related podcast in a discussion format. Today's participants include:
David McKee - http://www.lasvegasadvisor.com/blogs/dmckee/
Dave Schwartz - http://www.dieiscast.com
Chuck Monster - http://www.vegastripping.com
Thanks to all participants. The podcast is in my normal feed for 'The Worst Las Vegas Podcast' but it will probably move to a dedicated feed. Also, if anyone can think of a good name, drop them in the comments.
If you don't subscribe to the feed and want the direct URL, here it is:
Thanks to David McKee's blog for pointing out this article from Macau with some quotes from LVS boss Sheldon Adelson.
The Macau Daily News says in their piece that according to Adelson, the number of concessions will NOT be expanded in 2009 and in fact may *shrink* as some of Ho's more ghetto places get hit.
Interesting. Sorry Harrah's.
Las Vegas Sands reported their Q4 2007 results and the press release is here:
I'll update this story in a bit with some details and numbers once I have a chance to dig in.
Updated: Ok, I took a look at the numbers, which were down a bit. They cited increased development costs, which looks like it makes sense. Net income was WAY down but they had a ton of costs from opening Palazzo and post-opening stuff at Venetian Macau on Cotai. Interest expense was way up which indicates they had to fund some of those through bank loans. The Cotai property didn't perform at the level they wanted in terms of winnings but volume seems pretty strong - the property is already contributing about half of the company's gross. With Palazzo and Venetian Macau open, Sands is setup for a pretty nice story in fiscal 2008.
Some new photos posted this afternoon:
The Encore shots give a really good look at the final layouts for the big parts of the project. You can see all the skylights in the low-rise for the new spa, plus I assume that lattice roof area will be filled with glass as well. Overall, looking good - can't wait to see more.
Thanks to Brian and Mark for sharing their photos.
Regarding the podcast, I have GarageBand open now - hopefully I'll get this finished shortly.
Last week, most TV sets were tuned in to see the facade of a Las Vegas hotel, the Monte Carlo, engulfed in flames. I'm no expert in fire safety but I know what was going through my head, watching in real time: this fire is moving FAST and whatever is on the top of that building looks to be fueling it.
In the hours and days that followed, one term was repeated over and over: EIFS.
Instead of demonizing an easy target, I'm glad that I've had the chance to speak with several folks fluent in EIFS details, including some industry representatives. Keep reading after the jump and I'll share a couple of things I've learned.
According to a blurb in the LV Sun, workers at the Tropicana Hotel and Casino on the Las Vegas Strip have been asked not to cash their paychecks for a few days.
Palazzo is the finest hotel ever built in Las Vegas - Las Vegas Sands In-Room Magazine
"Give me a break. This whole thing is the biggest fairy tale I've ever seen." - Red Faced Guy
I was in Las Vegas at the end of December on a trip that was supposed to coincide with the soft opening of The Palazzo, the first major property to open on the Strip since Wynn Las Vegas in 2005. Of course, we know how that turned out - Las Vegas Sands postponed the soft-open for a few days and by the time guests were walking through, I was back at home.
When another excuse for a trip popped up, this time coinciding with the 'real' opening of The Palazzo, the credit card was primed and ready. I reserved a standard 'suite' for two nights at a rate of about $300/night. I've been a critic of The Venetian in the past but I really wanted to go into this past weekend without pre-judging the property... at least that was my goal.
Keep reading after the jump for my thoughts on The Palazzo, some comparisons to other properties, and some specific notes on the photos.
Photo gallery: http://www.ratevegas.com/photo/gallery/palazzo
We checked into a standard 'suite' at The Palazzo last night. I will be writing more when I get home, as well as publishing some photos, but here are some overall thoughts quickly, before I head out:
I really like the lobby and atrium areas - they look fantastic... but they may be the best parts of the property.
The room is nice, though I don't consider a single room a suite, even if it has a separated living space. The room is nicely appointed, though some of the fixtures look cheap.
Service has been great. A bellman walked us to our room, though I assume that's because it was slow. I am told on 80% of the rooms are open.
The casino is a disappointment. It's just a huge open room. Better than The Venetian but nowhere near as nice as WLV or Bellagio in this regard.
The pool area looks closed at the moment and only a few restaurants are open. I haven't spent much time in the shops yet.
This place is just what any close watcher of LVS would expect - it's The Venetian, slightly upgraded.
So, as I work on getting more data, what sort of things are you guys interested in?
Sheldon Adelson: He is driven. Interesting article in the NY Times.
"...the Venetian is now the Strip�s second most profitable casino hotel, behind only the Bellagio, said Robert A. LaFleur, an industry analyst with the Susquehanna Financial Group, and that is with only a third of its revenue coming from its gambling floor."
It's been on the LVA site for a little while but I wanted to make sure readers were aware that David McKee's blog, Stiffs and Georges, is back online. McKee is a straight talking Las Vegas gaming biz blogger that's not afraid to call 'em like he sees 'em.
Make this a regular on your regular RSS/reading list.
The Cosmopolitan, one of the more interesting upcoming deveopments on the Las Vegas Strip, is reportedly looking for investment capital. The Las Vegas Sun's new gaming blog reports:
Update:The mortgage holders have foreclosed: http://money.cnn.com/news/newsfeeds/articles/djf500/200801161602DOWJONESDJONLINE001065_FORTUNE5.htm
Well, the gaming win in the great state of Nevada declined a good bit last time 'round:
Not good for our favorite multi-national casino conglomerates. It's hard not to link this to the degrading confidence in the US economy overall. Gaming is often somewhat insulated - people love to wager no matter how screwed they are - but of course there would be some kind of a hit if things go down big time in the US of A.
We're back with another piece from guest author Matthew Farley. He was nice enough to write a piece previously on video table games.
This time the topic is old school service offerings and their place in today's Las Vegas, specifically as it relates to Binion's. An interesting piece and I thank him for sharing this with us. What do you guys think? Let's get a discussion going in the comments.
As for any other guest authors out there, feel free to contact me: editor AT ratevegas DOT com. We can give you some great exposure and writing is a lot of fun!
Well, Palazzo's casino and some other public spaces are open.
We got back from Las Vegas on Saturday - I was really hoping to see the insides myself. So much of the exterior needs work but I guess they were just determined to start the cash meter.
Update: Thanks to Mark for sharing some exclusive photos with us. You can see them here: http://www.ratevegas.com/photo/gallery/palazzo
Updated Again: I just booked two nights over the opening weekend so we'll be reporting on the full Palazzo experience.
According to MacauTripping.com, the MGM Grand Macau opened to a smashing success - over $6.6 million in drop in the first few days of operations. This points to a very high volume of play in that time.
Well, this could be the second shot across the bow in the industry as we see a second major Las Vegas casino's dealers vote to have union representation.
Following Wynn Las Vegas dealers before them, is this a reflection on management in these two organizations? Will we see dealers at an MGM Mirage property go this route?
It turns out that due to 'construction delays' there will be no hotel guests at Palazzo in 2007. I have confirmed with hotel staff that guests are being moved to The Venetian if they so desire.
Still working on final word if even the casino will be open this coming week - it's looking doubtful.
Thanks to Brian for the heads up on this.
Thanks to reader Andy who spotted this on The Mirage's official Web site. It seems the rooms are getting a full on make over starting in February and based on the pictures, they are totally tossing the current room decor.
Wow, that's drastic. Now, I totally think the rooms need to be redone but honestly, I think this design goes a bit too far for my tastes. I love the amenities they are adding - that's great... and, I think generally the vibe is okay but this is like cranked too far. It's as if they had one or two many committees weigh in on this, each tweaking the design a bit to the point that there's no longer any cohesion.
This was in the news yesterday and I just assumed most people saw it so I didn't post it but maybe I was wrong... Anyway, Wynn Macau is set to open it's casino expansion on Monday, December 24th. This includes more tables, slots, and their new dramatic entry feature (I hope we hear more about this soon). Following in January are more retails shops including Hugo Boss and Ferrari.
According to a press release from the Golden Nugget Las Vegas, they have completed their long running set of renovations that include a second floor nightclub for Downtown.
The 'Gold Diggers' nightclub opens at 4pm and offers views of the Fremont Street Experience. Along with the club, they have opened a new restaurant called Red Sushi and also some meeting space called 'The Grand'.
Overall, it is nice to see continued investment into the Downtown property.
Well, today is the big day for MGM Mirage with their first entry into Macau with the MGM Grand Macau. The property is a 50/50 joint venture with Pansy Ho, daughter of longtime operator Stanley Ho.
Personally, I think this property looks very interesting and it is certainly on my list of places to stay when I visit Macau sometime next year. I see the Wynn Macau/MGM Macau combo (they are right next door to each other) as the true epicenter of Macau luxury, despite Las Vegas Sands' grand Cotai experiment, at least for now.
Is Las Vegas facing a "perfect storm" with increased gaming taxes, high restaurant prices, infrastructure issues, crime/gang problems and other issues which confront large urban areas?
I was astonished to read that Las Vegas is now the most expensive restaurant city in the country, and higher gaming taxes may put a damper on future growth.
Las Vegas Becomes Country's Most Expensive Restaurant City
"Here in Las Vegas, that atmosphere for gaming having unfettered power to control economic-political outcomes is about to be changed as never before," he said.
He then referenced the initiative proposed by the teachers union to raise the gaming tax 3 points to 9.75 percent to pay teachers more and finance educational programs. That's a 44.4 percent tax increase."
Wow. In a pretty amazing turn of events, the New Jersey Casino Control Commission has denied a license extension to the Tropicana Atlantic City.
Mike_ch is back with another Stripwalk. This time he visits Encore, City Center, TI, Palazzo, Luxor and more. Check it out after the jump plus don't forget to check out the new photos:
Another piece of news from the recent press, the Wet N' Wild Crown Las Vegas project is moving past the Planning Commission after slashing their height, which may mean that they will end up with two towers.
It's making its way through the regulatory process in Nevada, with one hurdle to go.
I missed this story on vegas.com's new Arrow bus service, in cooperation with the monorail. It was written up in today's Miami Herald:
Vegas.com introduces high-tech bus service on the Las Vegas Strip
Here's the route map and details:
Is there a big enough market for both The Deuce and Arrow?
My friend Steve Friess has an article in the Las Vegas Weekly that goes over some of the worst ideas, coming soon to a Las Vegas near you.
This is exciting - an original piece from a new guest author, Matthew Farley. This piece focuses on video table games, a growing segment of the manufacturing scene.
Big thanks for Matthew for providing this - we hope there's a lot more to come! Anyone else interested in writing something should feel free to get in touch with me at editor AT ratevegas DOT com.
The feature story starts after the jump.
Well, it appears at the geniuses at Las Vegas Sands have decided that they needed a name for the combined complex of The Venetian, Palazzo and the Sands Expo Center. That name? MEGACENTER (yes, all caps). Dumb name. I wonder if they considered other gems such as THEMegacenter or maybe even CITYMEGACENTER.
Also, as has been reported elsewhere, Palazzo's opening moved from 12/20 to 12/28, no doubt cause they realized it was impossible to make 12/20 work. There's a good chance I'll be in town for this opening so I'll keep y'all posted. I don't think I'm brave enough to reserve a room.
The RJ has details on the departure of Tropicana's CFO:
The embattled parent company of the Tropicana on the Strip took another blow with the resignation of the company's chief financial officer after only 120 days in the position. [From ReviewJournal.com - Business - Tropicana CFO quits, takes new job]
For those following the fun, here's a recap on all the excitement:
The original article by Steve Friess where I was quoted is here.
Then, the first followup was on Steve's blog here, where we had a little commentary.
The latest is the Friess article in the Las Vegas Weekly, which can be read here.
Anyway, lots of fun and I will of course update you as it (if it) unfolds further.
Update: More from Chuck at VegasTripping: http://www.vegastripping.com/features/feature.php?feature_id=127&page=1
Here we are with a special Thanksgiving-eve 'Strip Walk' segment. This time around, mike_ch checks out the Frontier, Encore, City Center, Luxor, The Mirage and more. Text after the jump...
Bottle service at clubs is huge as reported in the LV Sun. The economy must be better than I thought!
"Consider that more than 2,000 people walked through the door at Mirage's Jet nightclub during a recent weekend - and that more than half sat at reserved tables where bottle service starts at $400 for a bottle shared by three people.
An average table check can reach about $800, said Kelley Jones, president of nightclub operator Light Group's restaurant division."
Revenue From Alcohol Growing Faster Than Slot Revenue
A piece on Steve Friess' Vegas blog yesterday talks about the upcoming clash between the Downtown Las Vegas Plaza Hotel and the upcoming Plaza Las Vegas, destined for the site of the now demolished New Frontier.
Like Steve says, this one seems clear. I'm curious how this will shake out - Elad has deep pockets, they could probably license the name and pay off the cash strapped Tamares (they still own the Plaza, right?)
I've posted my Las Vegas Strip construction photos: Most Recent Las Vegas Photos
All sorts of great stuff including Encore's high and low rise buildings, WLV's villa atrium, Palazzo, the white tiger pit at The Mirage, City Center, P-Ho, Bellagio, and more.
The link above should show them all but you can also visit the November 2007 tag. Also, based on some feedback I plan to add new searching and sorting capabilities to the photo database soon.
This will start Brian Fey's day off with a smile. Wynn Las Vegas has won recognition from The Michelin Guide.
NORM: Michelin makes Steve Wynn's year
Michelin's Highest Honor of Five Red Pavilions Awarded to Wynn Las Vegas
Okay, that was amazingly cool. If you've never felt the raw power of a building fall, make sure you put the Tropicana Island Tower implosion on your Jan/Feb calendar.
I took a ton of photos. They are here: http://www.ratevegas.com/photo/gallery/newfrontierimplosion.
That's probably it for now - I'm super tired and it's been a long day. Lastly though, another big thank you to Steve Friess who hooked me up with the pimp media access. Thanks Steve!!!
Well, I decided that I'm going to jump in the car and head to Las Vegas to photograph and shoot video of the implosion of the New Frontier tonight (early tomorrow).
I'll be trying to do this as 'live' as possible, including posting to my Twitter feed @ratevegas. Also, Flickr should have updated photos and of course I will be posting here, but that's probably going to have a little delay, just due to the nature of the tech. The Twitter feed will be the most up to date as it happens.
So, wish me luck and you'll hear from me soon.
Update: If anyone reading this is either a Wynn Resorts employee or is staying at Wynn Las Vegas and has a room overlooking the Frontier, drop me a line at editor AT ratevegas DOT com - myself and another high-profile Vegas blogger/writer would love to watch from your window.
MGM Mirage announced today that they will build a $3 billion, non gaming resort in Abu Dhabi, part of the United Arab Emirates.
I got a press release this morning from MGM Mirage regarding a new restaurant going in at The Mirage. BLT Burger will be replacing the Habitat at the resorts' Southern-most Strip entrance.
This is another nail in the coffin of Siegfried and Roy's tenure at The Mirage. As for the restaurant, the press release states:
"BLT Burger's diverse menu will offer quality ingredients including beef (sirloin, short rib, chuck and brisket cut), American and Japanese Kobe, lamb and Ahi tuna burgers along with soft, no-frills buns. Onion rings and a variety of French fry options, including waffle-cut, sweet potato and chili cheese, will complement the meal. An array of milkshakes in classic and spiked varieties will be available along with a selection of ice cream floats. Nostalgic glass-bottled sodas, innovative cocktails, as well as a focused selection of wine and beer will quench every guest's thirst."
I can't imagine MGM or Wynn having the problems HET has had with unauthorized remodeling. And, I can't imagine the RJ ever going after this story as aggressively if it were MGM or Wynn.
"Harrah's Entertainment has reached a turning point in recovering from bungled remodeling projects at two of its local hotels.
A block of 501 guest rooms at Harrah's Las Vegas returned to active use by patrons on Friday, Harrah's Entertainment executive Jan Jones announced the same day.
Those rooms were pulled from service due to remodeling that had been performed without permits or inspections. They are located on floors four through 19 of the hotel's Carnivale tower. Those floors no longer need a fire watch, which is round-the-clock patrolling by personnel with two-way communication to report any fire, Marybel Batjer, another Harrah's executive, said Saturday. The rooms were out of service for 25 days.
A smaller block of 87 rooms at the Rio also returned to service earlier last week. Those rooms were shut down for less than 25 days. At that hotel, fire watches continue on floors three through 17, plus 19, of the Ipanema tower."
Improper Remodeling: Harrah's Reopens 501 Rooms
Well, the last step in Station Casinos, Inc.'s journey to 'go private' has been achieved.
The Las Vegas Review Journal has the skinny: http://www.lvrj.com/business/10992946.html
Wynn Resorts just reported as the market closed - the conference call is about to start and I'll update this with any interesting info.
Quarterly revenue was $653.4 million, up from $318.1 million last year - all because of Macau. Adjusted property EBITDA was $186 million.
Adjusted net income: $73.4 million, compared to a $1.3 million loss last year. GAAP net income was $44 million and that figure from last year was skewed by the sale of the Macau sub-concession.
Lots of interesting details in the press release: http://phx.corporate-ir.net/phoenix.zhtml?c=132059&p=irol-newsArticle&ID=1069836&highlight=
ADR at Wynn Las Vegas: $282, up from $271 a year ago. Occupancy was 96.6%.
ADR at Wynn Macau: $245 and occupancy was 91.9%.
On their earnings call today, MGM Mirage's Jim Murren discussed the recent problems with their guest reservations system, OPERA, that runs 7 properties for the company, mostly in Las Vegas.
Murren stated that the OPERA issue was due to a 'memory leak in the operating system'. He also stated that OPERA runs on an 'HP platform' and an 'Oracle database'. By 'HP platform', it's not clear if he means they are running on HP's PA-RISC UNIX operating system or HP hardware and something like Windows Server.
Murren claims the issue is resolved and they are fully operational but that they intend to have a backup system put into place for the future. He didn't break out the total cost of the problem for the company.
MGM Mirage posted their 2007 Q3 results - the company's net revenues are up 6% to $1.9 billion.
Some discussion on the call surrounded City Center and Dubai, Bellagio's baccarat room being closed, and the ongoing construction at former Mandalay properties.
Occupancy was up 1% to 97% and ADR hit $147, up from $140. REVPAR hit $143 from $135 a year ago.
An interesting item - gambling revenues, excluding Beau Rivage, are actually down 3% from a year ago.
An interesting wire story about Harrah's dispute with a Native American tribe and a possible $2.8B judgement against the casino company. Analysts pose the possibility that it could even derail the privatization of the company, if the judgement is upheld.
Here's a new open topic thread for y'all. A couple of notes on this sunny Sunday:
Regarding the piece on VT&T regarding the Encore casino and a 'poker island', based on the plans I have seen and the people I have talked to, this is off the mark. Now, the plans I originally saw for the low rise stuff have substantially changed since then, as we have already discussed... My understanding is that there is no poker room planned for Encore, plus the walkway changes he talks about obliterate the retail that's planned along the WLV-Encore corridor and generally just sound like they waste space. I am very skeptical.
Second, thanks to reader MikeP for sending in a photo inside Palazzo's retail area, plus the new aquarium at The Mirage: http://www.ratevegas.com/photo/most_recent
MGM Mirage has been plagued with Reservation System computer problems for several days according to Steve Friess in the New York Times.
Computer Glitches Plague Casinos
An article over on the VegasRex blog talks about the Palazzo and if it will open on time. It's a question that a lot of people are asking - and wondering if 'opening' will be qualified with 'limited'.
Now, some of what Rex talks about are probably less of an issue than he makes them out to be - when these high-rises are built, the lower floors are finished, fixtures are installed and furnished while the upper floors are still being framed and curtained.
We know that the retail shops will be open in January and the 'Jersey Boys' show will be later in the Spring. Also, I'm pretty sure that some of the convention space expansion will probably not be open on 12/20 either.
Anyway, any inside info in this thread would be fascinating - what do you guys think?
Looks like the RJ has a front page piece on Macau gaming, specifically US based operators there. It's an interesting piece and it comes with a fairly cheesy map and some photos. Worth checking out - even some photos of the analysts that get quoted in every gaming article in the paper.
An interesting article in the LVBP goes over the Palazzo project - I didn't realize it was the largest steel project in North America - and it explains doing the framing that way vs. the more typical cement pours you see all over town.
Not so sure about that comment about LVS' 'typical attention to detail' though.
Sorry I'm only getting to post this now... Looks like Macau quarterlies are once again blowing through estimates:
A 46% increase? Nice. This quarter had a little bit of Venetian Macau action but we'll really get a feel for that next time around, plus of course in the LVS and WYNN quarterlies.
Thanks to Mike for another installment of 'Strip Walk', or semi-regular feature that focuses on Las Vegas Strip construction progress.
Lots of great new info here and of course, we've got photos: http://www.ratevegas.com/photo/gallery/stripwalk
Can Le Reve be salvaged? I haven't seen it, but Wynn has been tinkering with it for two years now: Is it a first class show?
Le Reve Continues To Evolve
In Business Las Vegas did a fascinating interview with MGM Mirage President and COO Jim Murren last week. It is a highly recommended read that gives great perspective into the thinking that has driven recent deals with Kerzner, Dubai World and others.
It's clear that Terry Lanni and Jim Murren 'get it' when it comes to the biz side of the gaming industry - they are re-defining the standard practices that have been common knowledge in the industry. Business as usual? Not anymore.
From partnering with interesting companies to big ambitious projects like City Center in Las Vegas, they are bringing techniques that have worked well in the general hospitality industry to gaming and it seems to be paying off in spades.
Personally, I'd love to do an interview with Murren but MGM MIRAGE sometimes looks down on Internet media, even those of us with larger numbers than some print publications. I'm hoping one of these days these companies will wake up to that. They're not as bad as some companies but they could do better in this department.
Wow, another crazy story, this time involving Harrah's and the Rio.
Did officials cut corners during a recent renovation? It seems some contractors have come forward and alleged this may be the case.
Clark County is on the case.
Very interesting article in the RJ about a case involving Las Vegas Sands, sealed documents and their Macau sub-concession.
Was anyone aware of these allegations? This could prove to be very bad for Sands.
This is a great addition to the Macau Web scene and a place I'll use for info constantly - at least until RateMacau.com goes live.
Good work Chuck!
Liz Benston had an interesting column on Macau in the 9/30 LV Sun:
Catching up to Las Vegas
Some quick notes on what's in the paper's today...
The RJ has an article on Aliante Station which is being built in North Las Vegas by the soon-to-be-private Station Casinos, Inc. North Las Vegas is a bit of a future growth market for them but this is set to be another nicely put together project, even if it is very 'Station-esque'.
Inside Gaming has an interesting note on 'Macau' vs 'Macao', which the eagle eyed will have noticed are both used by US operators in Macau (Wynn Resorts likes 'Macau', Las Vegas Sands uses 'Macao' - sounds like the LVS folks are clinging to the past).
I'm still looking for some sort of concrete occupancy numbers for The Venetian Macau - anyone seen anything published other than 'things are going well'? If so, post links in the comments.
Lastly, MacauTripping.com has been following up on the trip blog with great posts daily. Its quickly becoming my fave stop for Macau info and getting me excited for a trip myself. I did go out and grab RateMacau.com and there's no way I could get all the info I need without heading over there myself. We'll see I guess.
Well, you know the drill at this point. Another episode featuring MGM Grand, Wynn Las Vegas, City Center and more.
Photos are here: RateVegas Photos
This time we get a bonus video: Diablo's Cantina
"USA Today" profiles Terry Lanni:
"Throughout its history, Las Vegas has seen its share of legendary tycoons, from Howard Hughes to Steve Wynn. The low-profile Lanni flies under the public's radar, but he's one of the most-respected and influential forces in the $90 billion gaming industry.
"I've dealt with a few CEOs, and I'd have to rate Terry up there at the top," says Kirk Kerkorian, the 90-year-old owner of Tracinda, which held 56% of MGM Mirage's stock as of June. "I've always liked this company. We've got a hell of a team there."
Well, that was a great conversation... We had an in-depth talk with Chuck from VegasTripping.com who just recently has gotten back from Macau.
We went over everything from specific hotel talk on topics like Wynn Macau, Venetian Macau, Galaxy Starworld, MGM Grand Macau, Casino Lisboa and more. We also talked about the business - folks like Wynn Resorts, Las Vegas Sands, SJM, Melco and others.
Cotai, gaming industry topics, casino design and more. It was a great discussion and I'm hoping we can do another segment soon.
We'll be doing this on TalkShoe but here's how this will work - you guys submit some questions here on the site, I'll ask them in the first 30 minutes or so. The second half of the show will be open for general discussion. We'll see how that goes.
So... TONIGHT at 6pm PT
Update: Ok, the Talkshoe link is here: http://www.talkshoe.com/talkshoe/web/talkCast.jsp?masterId=44621.
If you're planning on joining us, I strongly recommend you go to the TalkShow.com Web site ahead of time to sign up for an account and download the software. Strictly speaking, the software isn't required (only a telephone is really required) but having it gives you extra features.
If you really can't download the software, you can call in using this number: 724-444-7444 with the TalkCast ID of 44621. Without the software you might not be able to ask any questions as we won't be able to identify you in the system.
This would be huge if LVS acquired Boyd especially for the Echelon site on the Strip.
"Activity was brisk, for instance, in Boyd Gaming Corp. as rumors swirled that the casino company might be in the sights of Las Vegas Sands Corp."
A couple of quick hits today:
Steve Wynn is the guest on this week's, The Strip Podcast. He talks about Macau, nightclubs, and more. According to Wynn, Tryst is the top netting nightclub in town and Tao is fiddling with their numbers a bit. The interview is interesting and features a fun example of Wynn's office at work. Steve's thesis on why spending is up is sort of interesting.
Second up, thanks to Detroit, this link to an article from Robin Leach - will the nightclub boom continue.
Liz Benston interviews Bobby Baldwin in the LV Sun. He answers some of the questions we asked during our recent call-in podcast.
"He typically shuns publicity but was keen to address rumors that he might be leaving MGM Mirage - perhaps to join his old boss - after a management reshuffle. Baldwin would have been a natural choice for operations chief at MGM Mirage, a job that went to finance chief and CityCenter's chief idea man Jim Murren. Baldwin says he is impressed by Wynn's growth in Las Vegas and Macau but he's satisfied and challenged at MGM Mirage, at least for now.
The poker whiz from Oklahoma will retain control of CityCenter and the two adjacent resorts, Bellagio and Monte Carlo, while becoming chief visionary in planning projects along the Strip and beyond."
Our second time using Talkshoe.com and it was a lot of fun. Regular readers like Detroit1051, Mike E, Brian Fey, mike_ch and BarbaryKevin were all in on the action.
We covered a broad range of issues, from Cotai, Harrah's, Wynn Resorts, Las Vegas Sands, Palazzo, Encore, IGT and a lot more.
During the show we talked about Chuck's Macau diary. That link is here: http://www.macautripping.com
Harrah's is making moves on the Cotai Strip in Macau by purchasing a golf course that makes them the second largest land holder in the area after Las Vegas Sands.
Based on one Web site's analysis, they paid about $22 million an acre - not too shabby.
Harrah's is still without a concession that gives them the necessary license required to operate a facility in Macau but of course, money talks and Harrah's wants in.
Okay, our next live podcast will be on this coming Sunday, the 16th at 7pm PT / 10pm ET.
We will be doing the show live with audience participation encouraged. We did this last time and it was fun... Using a system call TalkShoe, listeners can call in and be on the 'air', just like a radio talk show.
All the details to get on will be posted here on Sunday before the show.
It's gonna be fun - there's always lots going on in Las Vegas. I'll talk about my recent one day trip and I have a special report from a friend who experienced 'VMA Weekend' first hand.
Show Completed: We had a great time with a lively discussion on a bunch of topics. The show will be posted soon. Stay tuned for the next one, probably on another Sunday evening.
These wraps are visual pollution, imo.
"They are hard to miss, but that's the point.
A 40-story-high Jim Beam bottle ad on the side of the Rio, which was finished this week, is visible to commuters and tourists traveling north on Interstate 15.
An image of an Absolut Vodka bottle appears on the east side of the Luxor towers above the Strip.
Both advertisements are also visible from planes landing and taking off at McCarran International Airport."
Hotel-draping banner ads become latest clutter cutter for enterprising merchants
Here's the latest Strip Walk, this time hitting Wynn Las Vegas, Trump Las Vegas, New Frontier, Palazzo, Treasure Island, New York New York, Excalibur, Luxor and more...
As always, the photos are here: http://www.ratevegas.com/photo/gallery/stripwalk
Commentary after the jump... Take it away Mike!
As the Wynn Las Vegas tipping fiasco was hitting fast and furious, one Web site - CasinoDealers.net was the voice of many that felt they didn't have one. The Web site is a popular gathering spot for those in the industry and it was the home of many a hot-and-heavy discussion on the topic. Some of those discussions even spilled over here as we have some of the same contributors.
Anyway, the site is profiled in today's LVRJ:
Past posts on AAA Diamond Ratings and Mobil Star Ratings generated so many comments, that we might as well start a new topic. The 9/9/07 RJ follows the AAA inspector as he checks out The Mirage on its regular review.
"Unwilling to name competitors by name, Vincent said the association is the only company sending inspectors to all the properties it rates"
You'll recall in posts last year, we talked about Mobil's erroneous comments about Wynn Las Vegas, including reference to a "5th floor swimming pool", which showed that an inspector had not actually visited Wynn. Mobil subsequently corrected its errors.
MGM Mirage management should be happy with this story.
HOTEL CONFIDENTIAL: Diamond Quest
My good friend Chuck at VegasTripping.com is heading to Macau next week. Despite being very jealous, I'm happy to send you guys over to his site to get the regular updates he'll be posting - I know that I'm looking forward to some very thorough reporting from the field, HST style.
Second up, their annual 'Best Of' list, the Trippies, are now open for nominations. Feel free to nominate us - the parent Web site, RateVegas.com, this blog and even our podcast, which we're bringing back into a more regular schedule with live call-in shows (next Sunday the 16th!).
We're back with another Strip Walk! This was written almost a week ago and this time around you'll get Mike's comments but a few of my own sprinkled in - I was in Vegas for one night last week and took some of my own photos as well.
As always, the photos are here: http://www.ratevegas.com/photo/gallery/stripwalk
Commentary after the jump...
So, I'm a day early.
"In Business Las Vegas" has a story on a new hotel pricing website, Farecast, which sounds intereresting. I haven't spent much time on it yet, but it may be helpful for Las Vegas hotel rates.
New Web site uses science to gauge hotel pricing
The website itself is:
I'm just back from a little vacation and I'm beat but this is something I need to report - Las Vegas Sands have opened their second property in Macau, The Venetian Macau - the first hotel to open on the Cotai Strip.
Update: Read the comments for a review from reader Chris B.
Here's Harrah's press release on plans to build an arena behind Paris/Bally's. Jason and Billy alerted us to it earlier today.
"Harrah's Entertainment, Inc. (NYSE: HET - News) and AEG today unveiled plans for of an approximately 20,000-seat, privately financed, state-of-the-art arena. This arena is envisioned to be Las Vegas' new home for the most popular and important sports and entertainment events. The site of the venue will be one block east of the world famous Las Vegas Strip on approximately 10 acres of land that is part of the current Harrah's land holdings."
"Dubai agreed to pay $5 billion for a 9.5 percent stake in MGM Mirage and half of the Las Vegas casino owner's biggest development, bringing billionaire shareholder Kirk Kerkorian his biggest investment in the company."
This is huge news. There is a more in-depth report in the 8/22 Wall Street Journal for subscribers. The news troubles me, but Lanni and Murren haven't disappointed yet,
MGM Mirage made a few changes in the executive suite which they announced today.
First off, the extremely capable Jim Murren has been promoted to President and COO of the company (from President, CFO, and Treasurer). Murren came from Wall Street and is probably the most responsible for MGM Mirage being a model for other gaming companies to follow, especially when talking about reporting. Murren will also oversee all properties except for those that are part of the 'City Center Campus'.
Bobby Baldwin has been moved into a new position - Chief Design and Construction Officer. He'll oversee all new construction and capital improvements in the US. He also will oversee the 'City Center Campus', which includes City Center, Monte Carlo and Bellagio.
Lastly, Dan D'Arrigo has been promoted to EVP and CFO.
All of these positions report to Terri Lanni, the company's Chairman and CEO. Additionally, John Redmond, who had been running the properties formerly in the MGM family, including MGM Grand and NYNY has resigned as planned.
Unrelated, Harrah's has scheduled an announcement for tomorrow regarding entertainment changes at their resorts in Las Vegas.
According to our friend Steve Friess of The Strip Podcast, the New Frontier is set to be imploded on November 13th, probably at some ungodly hour of the morning.
It's not public yet (well, I guess it is now) but it sounds like he checked his sources, showing off yet again that he is a real reporter. Come on, Steve - bloggers don't need to FACT CHECK. Heh.
Anyway, discuss below...
Well, early Sunday there was ANOTHER shooting on the Strip - for those keeping track, we've had three in the past few weeks and a gun scare just last week that turned out to be false.
Here's the story on Sunday's action: http://www.lvrj.com/news/9255111.html
What's going on here? One of the great things about the Las Vegas Strip is that it is considered safe - enough so that many just take it for granted.
How will this impact tourism? Will it?
Welcome to a new semi-regular feature, 'Strip Walk'. These photo updates from the Las Vegas Strip (and other parts of the Valley) have previously been presented by our man in the field, mike_ch. Well, now he's an official part of the crew and we're aiming to get these two you about every other work, time and schedule permitting.
His notes follow after the jump and the photos for this and future walks are here:
You can't pick up a newspaper these days without seeing stories about the collapse of the sub-prime mortgage market and the potential trickle into other areas of the economy, including the tightening of credit.
No doubt the availability of cheap money has helped to fuel the building boom we are seeing on the Las Vegas Strip and elsewhere. As credit markets do tighten, how will that impact building in Las Vegas? Any impact? Visitors spending less in the casinos?
Steve Friess is an award winning Las Vegas-based journalist that regularly writes for the New York Times, USA Today and other national publications... You probably know him as the co-host of one of my favorite podcasts, The Strip. Steve's a great guy and Vegas is lucky to have him.
His new Las Vegas guidebook, 'Gay Vegas' covers Sin City with an emphasis on gay and lesbian travelers, though the tips in here are applicable to anyone visiting Southern Nevada.
Keep reading after the jump for my take on the book and if you want to pick up a copy, this Amazon link is a way to say thanks to us as well:
The shareholders of Station Casinos voted overwhelmingly to approve the plan to take the company private.
The $5.4 billion offer is from a new entity that combines Colony Capital and the Fertitta's, the company's founding family.
It will move to regulators next, I would expect inside the next nine months.
Thanks to VegasTripping.com for pointing us to this interesting interview with Steve Wynn.
He talks about their upcoming Cotai property - he wants to make it the best in the world it seems... Also, some talk on Encore (the casino will look like Macau's, which is pretty much what we all expected) and Las Vegas Sands.
Great interview: http://macaubusiness.com/index.php?id=881
Update: I thought I had a photo of the Wynn Macau casino in my gallery but I looked and couldn't find one. I know I've seen it though - I remember really liking it with the columns and drapes - much more low-key than WLV. Anyone have a link?
This interesting story in the RJ caught my eye - a well known casino security expert that has trained many in the industry has been accused of colluding to fix high stakes poker games in Atlantic City.
While an integral part of internal controls and even public safety, we don't hear about much of this stuff and that's why I thought it was worth sharing and discussing.
A second construction accident in about a week at Fontainebleau, though this time no one was killed, unlike last week. It appears a major collapse in the parking garage area that is under construction has taken place.
WYNN will release its Q2 earnings shortly, so we'll start a new topic now. In the meantime, Wynn has issed a press release announcing the opening of Blush on Labor Day weekend:
"Blush offers a unique option to the Las Vegas scene as the club seamlessly transforms from elegant lounge to high-energy nightclub."
Formerly the location of Lure, the venue will undergo a complete remodel under the direction of Wynn's Executive Vice President of Design Roger Thomas. The 4,500 square-foot club will feature a lit onyx dance floor and cr�me lantern ceiling sculpture. This central art focal piece will create various hues and images that enhance the vibe and atmosphere as the display literally comes alive nightly."
Updated: The earnings are in and they are pretty impressive. Check here.
As noted in the RJ and the LVS thread, Palazzo is scheduled to open December 20th, 2007. We'll see if that's a soft opening or what - I have my doubts.
Also, according to the Movable Buffet, Tangerine at Treasure Island will be closing and will be replaced with a new nightlife venue by the end of the year. Tangerine is managed by the Pure Management Group.
MGM Mirage had a big quarter but a large portion of the ground they gained were from one time events - property sales in Primm and elsewhere.
Still, income from continuing operations was also up - the company is healthy and I still consider it to be one of the best run in gaming - a model for the industry in that regard.
Revenues hit $2.11 billion and earnings were at $360 million with those property sales factored in. Incoming from continuing operations was $182 million, up from about $140 million in the year ago quarter.
REVPar on the Strip jumped 7%. I hope to have property specific info soon.
Technorati Tags: atlantic city, bellagio, borgata, cirque du soleil, cirquedusoleil, condos, gaming industry, las vegas, lasvegas, luxor, macau, mandalay bay, mgm grand, mgm mirage, mirage, project citycenter, treasure island, vegas
Las Vegas Sands reported their second quarter results today and the story is that net income is down this quarter, mostly due to higher costs.
Net income was $34.4 million from $109.3 million a year ago. Big drop... Well, they are about to open the Venetian Macau so they clearly have a reason to be spending money this quarter. Revenues were up to $612.9 million from $517 million so unless they get spend happy next time around, this is likely no huge deal.
Update: Looking at some of the numbers, at The Venetian in Las Vegas the ADR (average daily rate) was up $266, almost 10%. Other metrics like the drop were also up - fundamentals look solid.
"Exclusive Resorts today announced that it will develop and own 30 luxury condominiums at MGM MIRAGE's (NYSE: MGM - News) highly anticipated Vdara at CityCenter on the Las Vegas Strip. Vdara Condo Hotel, one of the $7.4 billion project's four residential towers, is set to open in late 2009."
I had never heard of Exclusive Resorts, but I sure fall short of its demographics. This is not your father's timeshare. MGM Mirage and Exclusive issued a press release on Exclusive's purchase of 30 units at Vdara. Membership fees run from $239,000-$459,000 with annual dues of $14,000-39,000.
Here's the release with a link to Exclusive Resorts site:
Exclusive Resorts Buys 30 Units At Vdara
LV Business Press reports the Conrad Majestic project planned for the Strip and Convention Center Drive is on hold with an announcement to be made in October. Doesn't look good. If you're not CityCenter, Echelon, Fontainebleau, Cosmopolitan or Elad Group, it's tough to build new projects.
This land is way too valuable for its current use so this was bound to happen... But an Elvis theme? Puke.
We'll see how much this project changes before it actually hits the drawing board, let alone the concrete machine.
According to industry sources, Tao Las Vegas at The Venetian is the highest grossing restaurant in the US, passing No. 2 Tavern on the Green in NYC by a huge margin.
Now, Tao is a nightclub too so it has an advantage but the numbers it is putting up are HUGE nonetheless.
We've reported on this in the past so it's not new news, but Harrah's is unveiling the plans for the new tower coming in at Caesars Palace - the Octavius Tower.
The LV Sun has more info:
"Fast Company" magazine writes that Las Vegas is growing too fast, has low quality of life, low quality employees and faces major water and environmental issues:
"The talent base in Las Vegas is not college-educated, it's not young and it's stuck in low-income jobs," Hammonds said. "That is not a recipe for economic sustainability. At the same time, you're getting remarkable population growth and a building boom. We worry about the quality of that growth if it's not supported by expansion of the talent base."
Las Vegas bashing is becoming a more frequent focus of media. In a tourism-driven economy with 130,000+ hotel rooms, you're going to attract great numbers of workers to provide support at all the hotels, casinos, nightclubs and other entertainment businesses. I think the story is a little unfair, but there is no question Las Vegas is going through major growing pains which affect quality of life. Water will continue to be an issue in the entire southwest U.S. and Las Vegas must come to grips with its infrastructure and traffic/mass transit challenges.
Welcome to the first in a new series. Thanks to our friends at CotaiCasinoNews.com, we will have some regular news and updates from Las Vegas Sands' replica of the Las Vegas Strip in China.
Continue after the jump for the posting with all the latest Cotai Strip news.
Steve Wynn talked with Jeff Simpson of the LV Sun again. Wynn said the Q2 numbers are in for WLV, and that the blackjack hold percentage doubled. He credits the improvement with his change in tip policy:
"Wynn said the final numbers for the Wynn Las Vegas second quarter are in, and the blackjack hold percentage doubled from 10 percent in the second quarter of 2006 to 20 percent this year .
He credited his crew of team leaders, motivated after receiving partial shares of the tip pool, with the improvement, saying that they had obviously been able to stop some blackjack mischief - referring to the lower hold percentage that he thinks was likely caused by cheating, collusion or supervisors who didn't stop card counting.
"The change is too big to be driven by luck," Wynn said. "Statewide the hold is about 15 percent. I think I've pulled the sheet off of some problems, and when you look at the statewide number , there must be problems at a bunch of other places."
Steve should quit talking. His comments today will further alienate dealers and other casino operators.
Wynn Talks With Jeff Simpson
Thankfully this doesn't happen often but it appears we have a crazy guy that opened fire inside the casino early this morning, injuring several people.
Chance of a backlash against Las Vegas? MGM Mirage taking security seriously enough? Can you even stop someone like this in advance?
Last week's topic had 64 replies, so let's start a new one.
Kerkorian's initial interest in acquiring Bellagio and CityCenter certainly helped MGM during the month of June. The RJ summarizes share price changes in June for operators and slot manufacturers. MGM leads the pack.
Kerkorian's bid boosts MGM Mirage
Binion's, formerly Binion's Horseshoe in Downtown Las Vegas, has reportedly been sold by owner MTR Gaming to TLC Casino Enterprises, the folks that own the Four Queens.
Binion's is a property full of history - once one of the most popular spots in town, it's been heading downhill for years.
I have confirmed reports that Bellagio is closing its Fontana Lounge, a small live music/dancing venue overlooking the lake that's been there since the hotel opened in 1998.
Casinos change amenities all the time but this closing is notable because it offered lounge music and a low-key dance environment for slightly older customers, important as most all nightlife is focused on younger patrons and loud, club music.
MGM Mirage hasn't finalized plans for the space, though previously there have been poker tournaments held there and clearly it could be a prime restaurant spot.
Does anyone know of any good alternatives?
Update: See this story for more: http://www.ratevegas.com/blog/2007/06/bellagios_fonta.html
The 6/20/07 WSJ reports that Kerkorian will withdraw his plans to take over Bellagio and CityCenter. Since the original announcement, MGM's share price is up 37%.
Was this only a ploy by Kerkorian and MGM to get the stock moving? Regardless, imo, MGM is still in play to be taken private.
An announcement may also be made today regarding a joint-venture between MGM and Kerzner Inetrnational to develop a multi-billion dollar casino resort on the 40 acres at the Strip and Sahara.
Subscribers to the WSJ can read the story at:
Kerkorian's MGM Plans in Doubt
Boyd Gaming broke ground on Echelon Place, the complex that will sit where the Stardust did for 50 years.
David's got some good coverage and it's also been all over the 'Net today.
You guys excited about Echelon? After seeing Borgata in AC, I can say that Boyd has it in 'em. Could be great.
Thanks to Dave Schwartz for allowing us to publish his recent Atlantic City trip report.
The report is after the jump and the photos that go with it are here:
Expansions at Hard Rock and Caesars Palace are on the agendas for next week's Planning Meetings.
Hard Rock: The plans indicate that the proposed expansion involves the
construction of 6 new high-rise towers to accommodate the additional
2,671 hotel rooms, with 4 of the towers located on the northwest side
of the site.
Hard Rock Expansion
Caesars: This is a request to modify the height of a previously approved high-
rise tower in conjunction with a resort hotel (Caesars Palace). The
tower was originally approved at a height of 295 feet with 1,017
guestrooms with a Tuscan villa design. The new elevations depict a
350 foot high tower with a design that is similar to the existing
Augustus Tower located just east of the proposed towers site.
Caesars Palace Hotel Tower
Station requests time extension on plans for resort at Tropicana and Industrial (Dean Martin Drive):
Thanks to mike_ch who is back with another Las Vegas Strip development/construction update.
The photos are here: http://www.ratevegas.com/photo/gallery/mikech
Keep reading after the jump!
Technorati Tags: bellagio, casino design, condos, gaming industry, las vegas, lasvegas, lasvegassands, luxor, mandalay bay, mgm mirage, palazzo, photography, planet hollywood, project citycenter, trip report, vegas, vegas photos, venetian, wynn, wynnlasvegas
I've written about this in the past but I wanted to see how things had progressed since the last set of plans. Well, not much has changed since the last round, honestly. Since at this point we've already been privy to the high-rise setup - multi-story suites, a new 'tower suites', the service configuration, the most interesting thing is probably the specifics of the casino and garden area. Unfortunately, this is an area still in flux and provided in least detail.
A couple of notes:
* The 'standard' Encore rooms have a similar configuration to those at Wynn Las Vegas, though they are larger.
* The sub-basement level includes another employee dining area, room service kitchen and other back of house facilities. Fortunately they won't have to run room service from the main WLV room service kitchens which would have had potential for cold food and bad service.
* There is additional valet parking under the new garden/casino space.
* There is a lot of cooking capacity, suggesting maybe ~6 new full size dining outlets and a handful of other smaller facilities (i.e. 6 restaurants and maybe 3-4 places like Sugar and Ice or the coffee shop).
I've also got some new documents to review, such as utilities layouts for the new building and if they shed any new light, I'll update this post.
I posted some photos previously but here they are again: http://www.ratevegas.com/photo/gallery/encore. My main camera was busted so I had to use the point and shoot. Hopefully next time I can send some photos from my new iPhone (yes, I'll be in line 6/29 - I love Apple more than I love WLV!)
Update: I have been contacted since this ran by multiple sources that indicate the 'garden' plan, as previously reported, is basically out, with the majority of that space being used for gaming and some dining. There is still some floral areas but more along the lines of what we have at WLV now, nothing grand in scope. This is of course, always developing but I've now got this from two sources, people that have proven credible in the past... We'll see!
Also, on the self-parking, we're hearing that a large portion of the new garage will be new self-park.
We really don't do a lot of Atlantic City coverage - I've only been there one time myself... Not a place that I would want to visit on a regular basis but I had an interesting day there and a great meal at one of Borgata's gourmet rooms.
Borgata itself was impressive - standing in their casino you would be hard pressed to forget you were on the Jersey shore. It feels like a Mandalay Bay-ish type of place.
Anyway, thanks to reader Tom M., for a slew of photo updates:
Some interesting new projects like an expansion at Borgata, plus of course MGM Mirage's possible entry into the market - AC is hopping!
Here's some more info on upcoming Las Vegas construction, based off of filings with the county.
THEPlace - The condo development to sit between Mandalay Bay and Luxor is still on track, despite there not being a peep from them since the initial announcement. Some details on the project stats, which will include a rather large 256 square foot water features.
Hard Rock Condos - Nothing really here - just a request for an extension for the new owner to figure out what they want to do.
Cogent? - Anyone know what this is?
New York New York Nightclub - This is finally coming together, with an indoor/outdoor setup.
Fontainebleau - Work continues as they are asking for a batch plant.
Casino Royale - They want to expand the casino in the back with all sorts of new space.
Detroit is a 2,000 mile drive from Las Vegas, but it's an interesting market of only three casinos (plus Casino Windsor across the river in Canada) with revenues of $1.3 Billion in 2006. MGM Grand $490 Million, MotorCity Casino $469 Million and Greektown $345 Million. The three commercial casinos are moving into their next phase. The casinos were authorized in the mid-1990's as a source of tax revenue in struggling Detroit. Many operators presented proposals, including Steve Wynn. The three selected were MGM Grand, Mandalalay Resort Group and the Sault Ste Marie Chippewa tribe of Michigan. The three selected companies were required to have local partners, but in effect, the local partners had little power. They did, however, make a lot of money from the very successful casinos. The law permitted the casinos to operate in temporary or interim facilities while they planned and built permanent casinos with hotels. Like many political projects, hotel requirements changed and ultimately were watered down to 400 rooms each. Detroit's former mayor had visions of the casinos being together on the Detroit River, but there was so much opposition that each company went its own way in separate locations. Two of the three casino hotels will open by the end of this year.
More on Detroit's progress and the status of the projects after the jump.
From Wall Street Journal
May 21, 2007 4:39 p.m. EDT
Tracinda to Enter Into Talks
With MGM to Acquire Bellagio
By DENISE JIA
May 21, 2007 4:39 p.m.
Billionaire investor Kirk Kerkorian's Tracinda Corp. announced Monday that it intends to enter into negotiations with MGM Mirage to purchase MGM's Bellagio Hotel and Casino and City Center properties.
In a filing with the Securities and Exchange Commission, Tracinda said it also wishes to pursue strategic alternatives with respect to its investment in the world's second-largest casino operator, which may include financial restructuring transactions involving all or a substantial portion of the remainder of the company.
Tracinda currently owns 158.8 million shares, or a 56% stake in the Las Vegas-based company, according to the SEC filing.
Tracinda said it has made no decision with respect to any such restructuring transactions and reserves the right not to engage in or approve any transaction.
Shares of the company closed Monday at $62.89.
Updated by Hunter / Tuesday Evening: In an interview with Steve Friess, Bill Weidner from Las Vegas Sands indicated that his company might be interested in The Mirage and Treasure Island if MGM Mirage's properties were to be sold off individually.
Ok - this is getting a bit out of hand. Now, Weidner has actually expressed interest in those two properties in the past. I don't have a link but when the MGM/Mandalay deal was going through, everyone wondered if the FTC would require an asset sale to complete the purchase (they did not in the end). It was at that time he mentioned that LVS would be interested in buying The Mirage and/or TI to include with their portfolio. We know how that story ended.
Of course LVS is interested in The Mirage and TI - and not just a close approximation - these are places that perform very well and have a long established record. I was at The Mirage earlier today for dinner and despite it being a Tuesday, it was quite busy and doing well with occupancy. LVS would do well to score either property but it is so extremely unlikely that there's no point discussing it. Kerkorian's motivations are unknown but it seems more likely that instead of trying to raise cash through selling properties, he's either making a first step toward an LBO for MGM Mirage or it is an attempt to impose a valuation on the company that is closer in line to what he can see as MGM Mirage's rightful place in the market. The latter would be a particularly shrewd move and U'I'm sure we we will discuss these motivations more as we learn more.
I'm at Luxor for a convention for a few days - it's been awhile since I've stayed here and I've never been that impressed. Stlll, this place has fallen off even more than how I last remember it. My room smells bad, a bed that looks like it came from a military barracks and not even an in-room safe. Wow - the parking lot is probably more hospitable.
MGM Mirage has a TON of work to do if they want to make this place into any sort of a worthwhile endeavor. Honestly, I'm blown away with how bad this room is. Wow.
Sorry guys, I'm sick and haven't gotten this posted until now.
Here's the low-down:
Frontier has sold and it is likely a Plaza hotel is going in its place.
In a final vote of 444 to 149, Wynn Las Vegas dealers have voted to unionize. This is the first step in a process that will take some time to be finalized, if it does ever even move past this step.
Either way, it's a big story. We'll see what happens next.
In a meeting last week between Steve Wynn and his Wynn Las Vegas dealers, the Wynn Resorts chairman and CEO apologized for what he called a 'big mistake' - his changes to the casino tip policy that were enacted last September at the Las Vegas Strip resort and the resulting brouhaha.
Wynn spoke about being tired and worn out by the opening of Wynn Macau as he was making the original decision. He laments the loss of the feeling of family at the company and acknowledges that many there feel betrayed. Calling it the 'wrong solution to the right problem', Wynn then urged the dealers to vote 'No' on the election this weekend that would have their casino dealers join the union.
As we get word of the Wynn vote, we'll keep you updated. Even if the dealers vote yes in a majority, the company still would need to negotiate a contract, which the union has failed to do in the past at other resorts where elections have gone their way.
Update: We have posted the audio of the story, provided by reader Leonard Stern:
Also, Steve Friess posted a story on this topic: http://thestrippodcast.blogspot.com/
Another bid for the Riviera, this time from the folks that are building the Cosmopolitan next to Project City Center.
Okay, all sorts of updates for today.
First off, some new construction photos from Brian Fey - Encore, Palazzo, etc.. - these are really coming together!
http://www.ratevegas.com/photo/gallery/brianfey - Thanks Brian!!
One photo that got special mention is this Encore shot:
People have been asking what this is.... Well, the plans I saw put the garden area right in that space - this looks to me like an advanced watering system. My guess is that these gardens are special - some kind of 'hook' or feature built into this attraction to make this more interesting than plants in the (fake) ground.
[Ed: Looks like this was even more basic than what we thought. Since we posted this I've been asking around and it sounds like this is based off the data network for the slot machines in the casino portion. Apparently the added casino space has encroached on the garden area and that explains the location... So - more casino, less garden = no story.]
[Ed (again): Looks like VT&T confirms this.]
MGM Grand wants to build another convention center adjacent to their existing facility.
Trump Las Vegas wants to change their floor numbering. This one is funny since it shows how these numbers are totally manipulated for marketing purposes.
Fun with parking at the Cosmo site.
Las Vegas Sands wants to add a pedestrian bridge to the back side of the Sands Expo Center.
Well, if this continues, Spamalot at Wynn Las Vegas is probably in trouble.
Of course, many speculated the show might run into the same sort of trouble that 'Avenue Q.' had in the same space.
This is not good news for the show or Wynn Las Vegas, which has struggled with their entertainment offerings from day one.
It's funny, Harrah's is the largest gaming company in the world and I'm just totally not interested in their quarterlies. Maybe it's because they are so spread out and derive revenue from so many locales - I'm not sure.
Anyway, here's an RJ report on Harrah's luck for Q1, which it seems wasn't so awesome due to Atlantic City.
Harrah's is in the process of going private so pretty soon I won't have to write these stories any more.
Well, they finally got out of the red... Wynn Resorts announced Q1 2007 net income of $58.4 million, compared to a loss of $11.4 million for 2006. Adjusted net income was $72.6 million, on strong results from Wynn Macau and Wynn Las Vegas.
Revenue for the quarter was $635.3 million, up from $277.2 million from a year ago.
The conference call starts in 20 minutes and I will be updating based on anything from that call.
The press release covers all of the interesting details - I will break them down shortly.
Wow, this is an interesting story.
Steve Friess has a note on his blog that says that MGM Mirage's company wide sports book network went down this afternoon, making it impossible to place bets at any MGM Mirage property - this includes Bellagio, MGM Grand, The Mirage, Mandalay Bay, Treasure Island, Monte Carlo, Luxor, Excalibur and Circus Circus.
This comes on the same day as a major boxing event and the Kentucky Derby - two MAJOR betting events.
Now, being in the technology field, I know that these things happen. I also know that these systems all have backup systems and that they train for these outages. I'd love to get some details on how this went down and what happened.
Well, construction is on going at the Fontainebleau site, even though they have yet to really announce anything.
This site plan shows some of the features of the new casino, including a zen garden - no doubt Schaeffer's contribution as he is into that stuff pretty heavily.
This project will be one to watch, no doubt.
A big thank you to Drambuie Man for sending in a new report and photos from Macau.
I asked for some more photos of Wynn Macau and the Venetian and we got some good coverage. I can't wait to get out there and see this stuff myself.
The report is after the jump...
David McKee has his edge back. He discusses Columbia Sussex's adoption of the Tropicana brand for its casino properties. There is a link to VegasTodayAndTomorrow.com's rendering of the proposed Tropicana expansion on the Strip. It's dated April, but I must have missed it.
"Columbia Sussex Does Something Right"
MGM Mirage reports Q12007 results this morning and despite posting some strong numbers that were solid gains, they didn't meet analyst consensus estimates for net income, mostly from lower than expected Las Vegas Strip gaming revenues.
Mississippi with Beau Rivage had a strong surge in activity as the property continues to come back from Katrina. Beyond that, Strip REVPAR jumped 9% and EBITDA was up as well.
I like to look at occupancy, ADR and REVPAR more than the revenue figures to get a feel for the real property performance and there was some growth there as well. The blended ADR for the Strip was $169 for the quarter and REVPAR at $162 with occupancy of 96%.
Here's the press release.
Well, this isn't something I would normally report but it's getting a ton of coverage so here's one for the record...
Steve Friess, of the Strip Podcast and his new blog was the one that broke the story - Harrah's clearly should have embargoed some more bloggers because they just lost control of their story (don't get me started on how these PR departments treat most bloggers - we have more traffic than many of the print magazines covering the industry but often I'm treated like we are of no consequence here - big mistake guys - I can give you a HUGE number of readers a month that all *want* to hear your message and yet I often have a hard time getting phone calls returned. I digress).
Anyway, Bette Midler will replace Celine Dion in 2008 when her Caesars Palace show closes. This will likely be a smashing success - the appetite for Celine was ravenous.
Las Vegas Sands reported their Q1 2007 results today and while net revenues were up, net income was down due to expenses on upcoming resort properties.
This is getting kinda repetitive - LVS seems to post solid numbers every quarter. They're like Microsoft - making tons of money and totally boring at the same time.
Revenue: $628.2 million
Net Income: $114.60 million
The ADR at the Venetian was up and occupancy was over 98%. Not too shabby.
Macau casino revenue was up. They don't really have any room product to report in Macau yet.
Thanks to Brian and everyone else that submitted this to me.
Just a quick post to direct people to some new photos posted at SkyScraper City that cover all the recent construction activity in Macau. Great to see these projects moving along, especially the hotel at the Sands - Sheldy quietly hedging his Cotai bet.
Also, Drambuie Man is back in Macau and will be sharing more photos when he returns - thanks again!
An interesting tidbit in today's RJ indicates that Wynn Macau has closed it's Tryst nightclub. A sister to the popular venue in Las Vegas, Tryst Macau was smaller and had been deemed as an experiment of sorts.
Well - I guess the experiment failed as the space is being converted into private gaming.
UNLV's Lied Institute for Real Estate Studies has released a report which says, "The marketing of sin that helps draws tourists to Las Vegas is an impediment in luring corporate headquarters to Southern Nevada....paints a pessimistic picture of Las Vegas' ability to recruit companies to Southern Nevada and diversify its economy beyond gaming."
The report is critical of some of the issues we've discussed here before, namely higher costs, unaffordable housing, poorly educated workforce, school system problems, lack of "cultural amenities", etc.
In Business Las Vegas summarized the report, but I've been unable to find a link to Lied's report itself. I'd like to read it in its entirety. I find the headline of the story a little over the top, using words like, "...image repels corporate relocation."
Do those here who either live in Las Vegas or frequently do business in Southern Nevada agree with the findings?
To read the article:
Report: Sin City Image Repels Corporate Relocation
MGM Mirage announced today that they will be investing $160MM in Anthony Marnell's South Strip (far South) project, the 'M Resort'.
Marnell previously built and operated the Rio and his company, Marnell Corrao, built The Mirage, Treasure Island, Bellagio and Wynn Las Vegas for Steve Wynn.
The New York Times has an interesting article that covers the upcoming growth spurt in Las Vegas. A lot of general info for a mass audience but I did think the quote from Wynn indicating that this was the 'most over the top' expansion so far was interesting.
Is this a bigger game changer than milestones like the International, MGM Grand #1, The Mirage, and then Bellagio?
Looks like billionaire Carl Ichan is selling off his casino assets, including the Stratosphere Tower, Arizona Charlie's (East and West) and a property in Laughlin.
Bloomberg has more on the deal, which is worth $1.3 billion. The buyer is a Goldman Sachs real estate investment subsidiary.
Update: More info here.
Thanks to VegasTripping.com for catching this one first.
MGM Mirage put out a press release today updating folks on City Center's progress.
I've heard a lot of chatter from insiders about the project and from all accounts it is coming along quite nicely - MGM Mirage executives are very pleased with their progress. Of course, recent photos show the main hotel is really taking shape.
There's also news on some budget changes to the project - nothing significant and entirely expected for a development in this stage and of this scope. MGM Mirage is also putting pressure on sub-contractors to reduce some project costs and budgets and without that, the price would have gone up more than they are indicating here.
So, that story we posted the other day from VT&T was true! MGM Mirage has indeed purchased the land surrounding Circus Circus to assemble a jumbo parcel that will certainly see re-development sometime in the future.
We previously discussed this here: http://www.ratevegas.com/blog/2007/04/rumor_mgm_mirag.html
Unfortunately I don't have the facility to merge the topics in any sensible way.
Here comes mike_ch's Las Vegas construction update April 2007. This one covers Paris, Planet Hollywood/Aladdin, Bellagio, City Center, NYNY, Excalibur, Mandalay Bay and Luxor.
Thanks again to him for providing this stuff.
Photos are located here: http://www.ratevegas.com/photo/most_recent
There are also some new videos, located here: http://www.ratevegas.com/photo/videos
Technorati Tags: aladdin, bellagio, casino design, gaming industry, harrahs, las vegas, lasvegas, luxor, mandalay bay, mgm mirage, planet hollywood, project citycenter, trip report, vegas, vegas photos, video
Well, after years of transition, the failed 'new' Aladdin will be gone for good this week as OpBiz representatives welcome a converted Planet Hollywood to the world's most famous resort corridor.
VegasTripping.com have taken to calling the place 'Planet Ho!' or 'P-Ho!', both of which I find quite appropriate, given the very high 'lameness quotient' of the property.
Will the place pull it off this time around? I can at least say that the changes they have made have improved their chances that things will be different this time around. The Strip frontage access has been improved and the huge video screens could be kind of interesting, depending on how they are used.
For years the Aladdin was a chea