LAS VEGAS -- In
the past 30 years, Las Vegas hotel redevelopment has followed a
fairly routine, two-step formula: Step 1, implode an old building.
Step 2, build a new one.
And when the new
building didnt work exactly as planned (casino revenues didnt meet
targets), owners wasted no time adding rooms and redesigning
entrances, casinos and other public areas to increase foot traffic
and, thus, the bottom line.
This formula was
followed at Luxor (opened in 1993, redone in 1996 at a cost of $300
million) and at the MGM Grand (opened in 1993, revamped in 1998 at
a cost of $700 million).
Regardless of the
scope or the means of improvement -- dynamite or manual might --
the redevelopment direction had always been to pull it down and
build it up.
But when the
trend to provide increasingly deluxe accommodations was launched a
few years ago, existing properties took a different course. They
built upscale towers adjacent to existing structures. Or, they
created a hotel within a hotel.
And thus began
the Las Vegas luxury lodging boomlet.
category includes Venezia at the Venetian, the Spa Tower at
Bellagio, THEhotel at Mandalay Bay and the Skylofts at MGM
But the movement
isnt limited to Strip properties. Station Casinos recently unveiled
a 240-room tower at its upscale Green
Valley Ranch property, featuring a higher proportion of suites than
in the previous build. On Flamingo Road, a 40-story tower is almost
halfway complete at the trendy-but-undersized Palms.
And the build it
and they will come mantra continues.
The paint is
barely dry on Wynn Las Vegas, but Wynn already has an additional
luxury tower in the planning stages. Encore at Wynn is slated for a
Tower at Caesars Palace is under construction (completion slated
for fall), and Palazzo at the Venetian -- a new, 3,000-suite resort
-- is anticipating a 2007 opening.
According to Rob
Goldstein, president of the Venetian, the need to provide
increasingly luxurious accommodations arose from a simple case of
supply and demand.
Vegas has a lot of rooms, the luxury segment is small, said
Goldstein, and we felt Venezia was the chance to build a smaller
hotel with luxury services.
The roots of the
upscale lodging trend go deeper than the recent development,
In 1993, Caesars
Palace introduced chic retail shops and high-end restaurants in an
unprecedented concentration at the Forum Shops. A few years later,
Steve Wynn broke the ultraluxury barrier with the opening of
Bellagio in 1998.
Along with the
Forum Shops, Bellagios deluxe accommodations, fashionable shops and
celebrity chefs appealed to an affluent demographic that heretofore
had not visited the Strip in large numbers.
Within a year,
MGM debuted the Mansion, a collection of 29 luxury villas primarily
used to house casino guests, celebrities and visiting
demand for upscale product in Las Vegas wasnt necessarily a
reaction to limited supply but another example of Vegas
The Forum Shops
and Bellagio put it out there, and the market appeared.
Then came Sheldon
Adelsons bombshell, the Venetian.
Even before the
Italian-themed resort opened its posh doors in 1999, Vegas insiders
heaped scorn on the proposed business model: Settle for a smaller
slice of revenue from gaming in favor of higher receipts for
lodging, food and beverage, retail and meetings and conventions.
House guests in extravagant suites with amenities designed to make
them comfortable in the room.
What was Adelson
The chairman of
the board was going against the standard Vegas mind-set of get em
out of the room and into the casino.
thinking exactly as his peers are today. Gone are the days when
casino profits covered for money-losing restaurants and giveaway
In modern Las
Vegas, every hotel department is a profit center, expected to pull
its own weight.
Even now, Adelson
has raised the bar on himself. The 2003 debut of the Venezia Tower
introduced 1,013 large suites, an upgraded level of service and a
And the Palazzo
project, another all-suite, 3,000-unit resort located just north of
the Venetian, has broken ground and is on target for a 2008
When Mandalay Bay
opened with an integrated Four Seasons on its top four floors in
1997, the hotel-within-a-hotel concept was launched in Las
Mandalay Resort Group execs decided to brand their own version of
ultraluxury, they built THEhotel at Mandalay Bay, with 1,117 plush,
two-room suites next to the original tower. Open since December,
2003, THEhotel caters primarily to meetings and conventions
midweek, then skews heavily toward leisure on weekends.
already positioned as a top-of-the-line product, the thinking
When plans for
the Spa Tower were created, MGM Mirage management already had
devised a way to put it on an equal footing with the existing
3,000-room luxury tower.
As the Spa Tower
neared completion, all units in the original tower were redone
(hard and soft goods) to be an exact match of their new
neighbors. And thus, an equality of
luxury was achieved -- at comparable room rates.
Back at the MGM
Grand, the Skylofts (opened in January) is yet another bold twist
on the hotel-within-a-hotel concept.
Fifty one-, two-,
and three-bedroom lofts were constructed on the hotels top two
Designed to evoke
chic residential lofts in New York, Tokyo and London, each
two-level Skyloft is open, airy and super-modern in form and
function. The units are overseen by a butler staff.
begins with pre-arrival concierge services, airport limo pickup and
All of this, of
course, begs the inevitable question: Whats next?
This is, after
all, Las Vegas.
the reporter who wrote this article, send e-mail to [email protected].