Oyo and Majestic projects illustrate gamut of Vegas hospitality

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A rendering of the Majestic Las Vegas, a nongaming luxury resort expected to break ground next year.
A rendering of the Majestic Las Vegas, a nongaming luxury resort expected to break ground next year.

Two new and notable projects have joined the ranks of Las Vegas' booming development pipeline, and despite taking very different tacks, both are emblematic of the city's fast-evolving hospitality landscape. 

In late August, India-based budget lodging brand Oyo announced that it had acquired the Hooters Casino Hotel, unveiling plans to relaunch it as the Oyo Hotel & Casino, its first flagship U.S. property. 

Located just off the Las Vegas Strip on Tropicana Avenue, the Oyo Hotel & Casino will have 657 rooms and feature a 35,000-square-foot casino, two restaurants, four bars and a fitness center. A revamp of the property is expected to be completed by the end of the year. 

Shortly after Oyo's plans went public, news broke that the Majestic, a luxury nongaming resort, had received approvals to break ground next year. The property, which is a few blocks off the northern end of the Strip and is scheduled to open by 2023, will offer 720 rooms, six restaurants and a live entertainment venue as well as a 70,000-square-foot fitness, nutrition and medical spa facility.

"Both these properties are catering to very specific markets in their own ways," said Rummy Pandit, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University in New Jersey. "Majestic is looking for that high-end clientele that perhaps isn't just gambling, while Oyo is providing the budget accommodation experience, with gaming. But this is reflective of Vegas, which has really established its marketability as a destination for all different kinds of experiences." 

With Las Vegas' overall business increasingly less reliant on gaming, Pandit added, the Majestic's decision to eschew a casino component doesn't necessarily put it at a disadvantage.

"When we look at the market of Vegas today, around 35% of revenue comes from gaming, while 65% comes from nongaming, meaning accommodations, food and beverage and entertainment," he said. "Competition for the gaming market has become stronger in surrounding states, so what people are now looking for is a true destination resort. They're no longer just looking for that gaming experience." 

Michael Green, associate professor of history at the University of Nevada, Las Vegas, expressed a similar sentiment, while adding that the Majestic's proximity to the Las Vegas Convention Center, which is undergoing a major expansion and is expected to open in 2021, positions it to attract a growing contingent of visitors less focused on gambling.

"Do convention visitors gamble?" Green asked. "Some do, but some certainly don't. Fewer people are coming with gambling on the mind, and resorts like the Majestic are thinking about what else gets them in the door."

Conversely, Oyo is jumping wholeheartedly into the Vegas gambling space, with the Oyo Hotel & Casino set to be the brand's first gaming venue. But although the move might seem unexpected, Green views Oyo's Vegas foray as very much in line with current development trends.

"If you think about the big Las Vegas resort corporations, whether it's Wynn or MGM, going into Macau and other jurisdictions, why wouldn't we have more entrants like Resorts World coming in from the other direction? It's increasingly a multinational and transnational environment, so this makes sense."

And while Oyo's U.S. presence is still relatively small, with just over 112 of its more than 23,000 hotels located stateside, Pandit is confident that the flag won't be short on brand awareness.

"More than 40 million people visit Las Vegas each year, and they come from all over the world, not just the U.S.," Pandit said. "And Oyo is everywhere too. The customer that stays there is going to be very familiar with Oyo."

Meanwhile, the Oyo and Majestic projects come into play as Vegas sees a flurry of development activity. Among the more notable Vegas projects under construction are the 4,000-room Drew Las Vegas and the 3,000-room Resorts World Las Vegas at the northern end of the Strip as well as the 777-room Circa in downtown Las Vegas.

With those properties appearing to skew toward the more upscale end of the spectrum, however, Green pointed out that Oyo could be targeting a demographic that's been somewhat underserved in recent years.

"After the recession hit, the Strip became much more interested in that luxury-oriented clientele," Green said. "There are perhaps more luxury possibilities around the Strip right now than there are middle-class possibilities. So Oyo may be smart in reaching for [that latter] market."

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