June 01, 2002
> Meetings & Conventions - Market Value - June 2002 Current Issue
June 2002

New Games in Town

The latest developments in gaming cities nationwide

By Terence Baker

  Economic indicators notwithstanding, prospects for the gaming industry look surprisingly game. An impressive $14.4 billion of casino development is going ahead or is in the advanced stages of planning, according to Hospitality Real Estate Counselors Inc., an Englewood, Colo.-based consultancy. And while this represents a 7.2 percent decrease in capital expenditure compared with 2001, investors are betting their confidence will pay off.

Coming soon: Mandalay Bay in Las Vegas is building a convention center.

Las Vegas hosted more than four million delegates in 2001, and meetings-related revenue in the city reached $4.8 billion, a 12.8 percent rise over 2000. This year, the city anticipates a 5.1 percent increase in convention business over 2001.

Meanwhile, casino towns across the country are continuing to invest in renovations and new development. Following is a roundup of the latest news.

Atlantic City
After a relatively stagnant decade, Atlantic City is poised for a resurgence. In the works are two new mega-resorts and the expansion of the Boardwalk Hall entertainment complex. Citywide, between 4,700 and 6,000 new hotel rooms will be added before the end of 2005.

To open first is MGM/Boyd’s 2,010-room Borgata, a $1 billion collaboration between MGM Mirage and Boyd Gaming Corp. The 43-story resort is due to debut next spring in the city’s Renaissance Pointe section, complete with 70,000 square feet of function space and a 35,000-square-foot spa. Plans also call for 120,000 square feet of casino space, 5,000 parking spaces and 11 restaurants.

Scheduled to open in 2005 is the MGM Mirage Atlantic City, a $1 billion-plus resort adjacent to the Borgata. MGM officials are waiting to see how the Borgata fares before finalizing the size of the property. In the event of overwhelming success, the 170-acre parcel of MGM-owned land has space for a third property, so future construction is possible.

The city’s 1929 Boardwalk Hall just finished a $90 million renovation. The revamped East Hall now contains 14,000 seats for concerts and almost 10,000 seats for ice hockey. A new 300,000-square-foot shopping mall will soon link the hall with the Atlantic City Convention Center, which has 500,000 square feet of exhibit space.

On the expansion front: The 1,600-room Tropicana Casino & Resort is building a 502-room, $225 million hotel tower, to open in March 2004. Within the tower will be 25 meeting rooms offering a total of 20,000 square feet and a Latin-themed mall called The Quarter.

Gleaming gem: The renovated Boardwalk Hall in Atlantic City

Harrah’s Entertainment Inc. has two expansions under way: The 1,174-room Harrah’s Atlantic City is constructing a 452-room hotel tower and 50,000 extra square feet of casino space at a cost of more than $110 million. Work is scheduled to be completed by year-end. The hotel’s sister property, the 755-room Showboat Casino-Hotel, began work on a $90 million, 544-room hotel tower due to welcome guests in June 2003.

The 644-room Resorts Atlantic City is going ahead with a 30-story, 459-room expansion after having abandoned the project following Sept. 11. With a price tag of $115 million, the expansion will replace the resort’s North Tower and rebuild adjacent Steeplechase Pier. Completion is targeted for spring 2003.

The 511-room Sands Casino Hotel, which has almost 15,000 square feet of meeting and function space, is incorporating the attached Madison House Hotel as a 135-suite addition. Work should be finished this month.

The big news here is the debut of the $1 billion Project Sunburst expansion at Mohegan Sun in Uncasville. The highlight is a 34-story, 1,200-room hotel that opened in mid-April with 100,000 square feet of meeting space, which includes a 40,000-square-foot ballroom.

Last September saw the opening of the Casino of the Sky, which has 115,000 square feet of gaming space and a 55-foot-high indoor waterfall. The property complements the 6-year-old Casino of the Earth. Also new are a 300-seat cabaret lounge, a 10,000-seat arena and a two-story, 130,000-square-foot shopping and restaurant area. Soon to come: a 20,000-square-foot spa.

Bright addition: Mohegan Sun’s new Project Sunburst

In Mashantucket, the 1,426-room Foxwoods Resort Casino has renovated its 1,400-seat Fox Theater, which opened with a performance by Frank Sinatra back in 1993. Also new are two nightclubs, the 8,084-square-foot B.B. King Dance Club and the 5,000-square-foot B.B. King Nite Club.

Las Vegas
The city announced several mega-projects before Sept. 11; today, most are going forward. The Las Vegas Convention Center opened its South Hall (918,000 square feet of meeting space and 51 meeting rooms) earlier this year and now offers 2 million square feet of exhibit space and 170 meeting rooms. The 3,309-room Mandalay Bay Resort & Casino is moving ahead with its own 1.8 million-square-foot convention center. The $235 million facility was due to open this August but has been rescheduled for January 2003.

Other news comes from Steve Wynn, the creative force behind such Las Vegas behemoths as the Bellagio and Mirage hotels. Wynn’s new $1.2 billion project, to be called La Reve (French for “The Dream”), will be a 2,455-room, 45-story property on the site of the former Desert Inn. Work should be completed by late 2004 or early 2005. La Reve will include a 132,000-square-foot convention center, a 120,000-square-foot casino and 1,500- and 2,000-seat entertainment venues. The hotel also is likely to showcase part of Wynn’s extensive art collection, including the Pablo Picasso painting for which the property is named.

Just outside the city in Lake Las Vegas, the $170 million Ritz-Carlton, Lake Las Vegas Resort & Spa is set to open in November. The 350-room resort features a re-creation of the Pontevecchio Bridge (the original is in Florence, Italy) spanning a faux lake. In the works are four restaurants, an 18-hole golf course designed by Tom Weiskopf, a 30,000-square-foot spa, 40,000 square feet of casino space and 25,200 square feet of meeting and function space.

In a related European vein, a London-themed resort hotel might soon come to the Strip. Plans are for Turnberry Associates to develop a 2,050-room property with a 90,000-square-foot casino and a 500-foot-high Ferris wheel reminiscent of the London Eye. In the true tradition of New York, New York, expect re-creations of Big Ben, and Buckingham Palace. So far, no groundbreaking date has been announced.

Preferring a Miami Beach theme, developer Marvin Lipshultz is set to turn the 150-room Howard Johnson’s Plaza into a 420-room art deco hotel called South Beach, with 27,000 square feet of casino space. A groundbreaking date is yet to be announced.

In other Las Vegas news:
" The 2,767-room Mirage completed a $32 million renovation of all its guest rooms in March; decorators found their inspiration in the South Seas.

" The 716-suite Tuscany Hotel, which opened last December, is debuting a new casino this fall and adding 36,000 square feet of meeting space for a total of 42,686.

" At the 4,411-room Luxor Hotel and Casino, all 2,777 guest rooms in the property’s pyramid have been freshened up. The $40 million project has left the Egyptian decor intact.

" The 1,444-room Stratosphere Casino Hotel & Tower opened an outdoor events center in March. The venue has 3,606 grandstand seats and 6,318 bleacher seats; 1,500 chairs can be set up on the playing field. The hotel also plans to build a new 510-foot-high thrill ride that will whisk guests down its signature tower overlooking Las Vegas Boulevard.

" The 840-room Orleans Hotel & Casino is adding a 9,000-seat arena. The $140 million expansion also will add 620 rooms, to open this September. All work is scheduled to finish by spring 2003.

" The 1,550-room Stardust Resort & Casino opened the 40,500-square-foot Stardust Pavilion & Exhibit Center last October. The resort now offers more than 65,000 square feet of meeting space.

" Also new are two off-Strip properties: The $265 million Palms Casino Hotel opened last November and features 455 rooms, a 1,200-seat entertainment venue, 9,000 square feet of meeting space, 95,000 square feet of gaming and a nightclub that can host 1,500 people.

The other newcomer is the 247-room Green Valley Ranch Resort, which welcomed its first guests last December. The $280 million property includes a spa, a cinema, a casino, seven restaurants and 10,000 square feet of meeting space.

Mississippi magnet: The Palace Casino Resort in Biloxi

Mississippi Gulf Coast/Tunica
The Casino Magic-Bay St. Louis opened a 291-room, 14-story hotel tower at the end of June, giving the property a total of 492 rooms. The tower offers 10,000 square feet of meeting space, for a total of 30,000.

The 236-room Palace Casino Resort in Biloxi opened only two years ago but already has finished its first renovation. The $15 million project wrapped up in June and included remodeling the dining room and adding a 24-berth marina.

The 1927-vintage Gulf Hills Resort in Ocean Springs, which has hosted such legends as Judy Garland, Frank Sinatra and Elvis Presley, was closed for a much-needed renovation and reopened last year. The property features French Provincial decor, 64 guest rooms and 6,000 square feet of meeting space. In January, Copa Casinos moved a 150,000-square-foot barge down to Gulfport from Tunica, Miss., where in the 1990s the vessel served as the Treasure Bay Tunica Casino. The venue will reopen for gaming in September after a multimillion-dollar renovation, and Copa officials plan a hotel at the barge’s dock within five years.

In Tunica, a $4 million expansion to the Tunica Arena & Exposition Center, also known as the Paul Battle Jr. Arena & Exposition Center, will add a 92,000-square-foot, 500-seat arena. Work should be completed this fall. The facility contains approximately 48,000 square feet of exhibit space.

Reno/Lake Tahoe
In January, the 1,572-room Circus Circus Hotel & Casino in Reno opened its Mandalay Convention Center. Accommodating up to 1,500 people, the center has 18,000 square feet of ballroom space and six meeting rooms, supplementing the hotel’s four existing meeting rooms.

The year-old, $70 million Siena Hotel Spa Casino in Reno has 214 rooms and 13,000 square feet of meeting space. Also on-site are a spa, a 23,000-square-foot casino and a restaurant, Enoteca.

Refurbished: Hyatt Regency Lake Tahoe

The Reno-Sparks Convention Center is being enlarged in a $105 million project set to wrap up next month. The expanded center will contain a total of 381,000 square feet of exhibit space and 79,000 square feet of meeting space. The existing facility should be fully renovated by October.

The nearby city of South Lake Tahoe, Calif., plans to build a 91,000-square-foot convention center, which should finish in mid-2003. Also new will be a 540-room convention hotel.

The Hyatt Regency Lake Tahoe Resort & Casino, in Incline Village on the north shore of Lake Tahoe, is midway through a $60 million renovation. Completed now are improvements to the casino, lobby, restaurants and 14,000 square feet of ballroom space. The second phase, to finish in summer 2003, will add a 150-room wing and a three-tiered pool complex with swim-in/ swim-out access to a new spa.

In the planning stage: more than $3 billion in new facilities
NameLocationCostNumber of Hotel Rooms Greektown Casino* Detroit $503 million 400 London theme resort Las Vegas N/A 2,050 MGM Grand Detroit Casino* Detroit $718 million 400 MGM Mirage Atlantic City Atlantic City $1 billion TBD Motorcity* Detroit $595 million 400 Pinnacle Lake Charles, La. $220 million TBD South Beach theme resort Las Vegas N/A 420 *Existing casinos adding hotels Source: Hospitality Real Estate Counselors Inc. and M&C

Now under way: $3,345 billion in new or expanded gaming properties
NameLocationCost# of Hotel RoomsCompleteion Date Borgata* Atlantic City $1 billion 2,010 Spring 2003 Harrah’s Atlantic City Atlantic City $110 million 452 Late 2002 Hyatt Regency Lake Tahoe Incline Village, Calif. $60 million 150 Summer 2003 La Reve* Las Vegas $1.2 billion 2,455 Early 2005 Mandalay Bay Resort & Casino Las Vegas $235 million N/A January 2003 Orleans Hotel & Casino Las Vegas $140 million 620 Spring 2003 Resorts Atlantic City Atlantic City $115 million 459 March/April 2003 Ritz-Carlton Lake Las Vegas* Henderson, Nev. $170 million 350 November 2002 Showboat Casino-Hotel Atlantic City $90 million 544 June 2003 Tropicana Casino & Resort Atlantic City $225 million 502 March 2004 * New properties Source: Hospitality Real Estate Counselors Inc. and M&C Game Face
IMAGEHow did gaming destinations weather a rough year, and what’s in store for the future? Frank Fahrenkopf, president and CEO of the Washington, D.C.-based American Gaming Association, recently shared some insights with M&C.

What was the effect of Sept. 11 on the major gaming destinations?

Las Vegas is a fly-in market, with 48 to 51 percent of visitors coming in by air. They were really devastated. Participation in conventions and other tourism was down. But most other major U.S. gaming destinations are drive markets. Places like Atlantic City and Mississippi were negatively impacted, but not like Las Vegas. Their year-end numbers were flat or had a modest increase, but Nevada saw its first decrease since the 1980s.

How is the recovery going now?

They’re getting there. Various destinations had to offer lower room rates to get people back, particularly in the luxury hotels, and they did a good deal of target marketing. In Vegas, they’re doing extremely well on weekends, but weeknights are still soft. Assuming we don’t have another crisis, I think by early summer we’ll be back to normal.

What are some key developments drawing groups to gaming destinations?

The big growth is in the new casino jurisdictions: Mississippi, Louisiana, Missouri, Iowa, Indiana and Illinois. In these riverboat states, major hotels have been built in conjunction with casinos, and that has changed the dynamic in those areas.

You’ve got hotel rooms, golf courses and spas to make those destinations more attractive. That is what Las Vegas has done; people are going to Las Vegas for the complete entertainment package.

In these new jurisdictions, there was a federal study to look at the impact of gambling. Destination-type resort casinos attracted capital investment and spurred tremendous development in those riverboat markets, which makes them more attractive to groups.

How has the relationship between meetings and gaming changed?

The change took place in Las Vegas because of the building of the Venetian; the developer was going after the group and convention market. He competes with the Las Vegas Convention Center, and Mandalay Bay is going to open a new convention center next year.

In most communities the convention bureau is trying to draw groups to the city, and the hotels benefit. Now you have more dynamic competition and just tremendous demand. Do you see Las Vegas reaching a saturation point in the future?

When we were trying to find dates for the AGA’s new trade show, the Global Gaming Expo (G2E), the market was very crowded, even 10 years out. You would think sometime you’d reach a max, but Las Vegas is one of those rare places that reinvents itself every eight or 10 years.

What are other gaming destinations doing to woo the group market?

Mississippi is a dramatic success story. When you look at the facilities that have been built and the construction of golf courses, they seem to be following the approach Las Vegas took they’re developing other attractions.

We’re also seeing changes in Atlantic City. It’s been a drive market for years. They just improved the airport to handle larger airplanes and more volume. I think the opening of Borgata will be a different approach, with the shopping and restaurants. Also, MGM is building. A number of existing hotel casinos are acquiring golf courses to be part of that total entertainment package.

What sort of synergy do you see between the meetings and gaming industries?

There are very close working relationships in most of the communities. You normally will find reps of the gaming industry on CVB boards.

The new dynamic is this prospect of hotel casinos becoming themselves the sites for major conventions. Now, with the construction of some of these, there’s a little healthy competition.

• Martha Cooke

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