Resorts World and SLS Las Vegas: 2014 Vegas Strip Casino Projects
Since 2010 when the Cosmopolitan of Las Vegas opened, there has not been a new megaresort built in Sin City. But Malaysia-based Genting Group has announced they will begin construction on Resorts World Las Vegas casino this year, a project that is expected to cost between $2 billion and $7 billion. The 87-acre site where construction will begin has sat dormant for nearly half a decade, but will hopefully see the light of day sometime in the next three to four years when construction is completed and the doors of the 3,400-room megaresort open.
The Genting Group, which has a $38-billion market capitalization, bought the $350-million Echelon property from Boyd Gaming Corp. last March and then announced the project with Governor Brian Sandoval and Senate Majority Leader Harry Reid. But since then, there has been no news from the company, but gaming analysts aren’t concerned.
The industry believes that development plans are in the works, as well as regulatory background checks by the gaming board, site approvals, and other forms of red tape. It is assumed that Genting will announce their plans at their own pace, as reps for the company decline to make comments on the project.
Resorts World Las Vegas: Formerly the Echelon Project
What we do know is that, the planned September 2014 opening has been much anticipated since the 59-year-old Las Vegas landmark, the Sahara, was closed in 2011. The building was gutted in 2012 when SBE Entertainment secured the financing for the project. The new arena will have 1,600 rooms and a casino that spans 60,000 square feet with 800 slots and 80 table games.
The key features of the property will be nightclubs and restaurants operated by SBE. Los Angeles-based SBE operates 60+ culinary locations in Southern California and has hotels in New York, Miami, and Los Angeles. The underlying focus will be to turn nightclub patrons into casino customers. There were also hopes that the Genting Group would be able to bring two pandas from China to have a new home on the Strip, as was mentioned when the project was announced.
Credit Suisse Analyst on Genting Group
Joel Simkins, gaming analyst for Credit Suisse, says, “None of us have really heard much. We know they are pressing forward. We have an analyst in Malaysia who said the company is kind of a black box when it comes to information.”
He also explains, “The beauty of Genting is that they have a lower return-on-investment threshold than most other gaming companies. They are in it for the long haul.”
Another gaming analyst Dennis Farrell, Jr. for Wells Fargo Securities explains, “The Genting folks take a longer-term view of their investments. They are not in any rush.”
But Vegas is really wanting to know what will be next. The market there has been steadily making a comeback since the recession. Gaming revenues have increased 1.5% to $10.86 billion in 2012 and were up 2.4% by the end of October. The city may not reach its goal of 40 million visitors in 2013. Through October, Las Vegas had 33.5 million visitors, which was down 0.3% from the same 10-month report of 2012.
Las Vegas Convention Sector Looks Solid
There are positive trends in the forecast, though. The business of conventions alone shows promise for the first half of next year, as many trade shows and bigger conventions have already been booked, and high-roller Asian baccarat isn’t expected to slow down any time soon.
Simkins says, “Corporate America is sending people to Las Vegas. That end of the business is quite healthy.”
Farrell says that those middle-class travelers who scaled back in 2013 are expected to return in 2014. He adds, “There also continues to be international demand for Las Vegas.”
And whether Resorts World decides to break ground this year or not, Las Vegas will incur a mix of hotel-casino renovations and nongaming amenities are expected to be added, as well as some surprise attractions for the new year.
SLS Las Vegas Projections
Construction is expected to be completed during 2014 for both the SLS Las Vegas (formerly the Sahara), a $425 million project, and the $180-million reopening of Bill’s Gamblin’ Hall, which has yet to be renamed.
Caesars Entertainment Corp. had to overcome quite an obstacle in October when the Massachusetts gaming board found alleged ties between the company and Russian mobsters. The company’s branding partner for the Bill’s Gamblin’ Hall redevelopment project, Gansevoort Hotel Group of New York, was immediately dropped from the project and the company has proceeded to find a new partner; however, they are still deemed unacceptable for Massachusetts. This project is expected to be completed towards the end of 2014.
In addition, there will be two brand new entertainment, retail, and dining centers open up on the Strip. Caesars $550 million Linq will offer a 550-foot High Roller observation wheel and MGM Resorts International’s $100-million outdoor plaza that will sit between the Monte Carlo and New York New York. This area will include Hershey’s Chocolate World, a 150,000-square-foot area.
Bally’s Grand Bazaar Shops
Also expected to open in 2014, Bally’s has also announced update plans with the $50-millionj project, the Grand Bazaar Shops, which will be constructed near the intersection of Flamingo Road and the Strip.
Simkins says that bars, clubs, restaurants, and retail stores will also be added to the Strip’s offering, targeting the non-gaming market. He says, “It’s representative of the trend acknowledged in the gaming industry. Regional gaming markets have matured and Las Vegas needs to find additional ways to capture the consumer.”
Jim Murren, MGM Resorts Chairman, says the company’s project will be a gateway to a $350-million sports and entertainment arena that is expected to open in 2016, creating “an energy that you find in the world’s great cities.”
Murren explains that the trend is that visitors don’t want to be tied to just one establishment; they want to be a part of it all. “That visitor wants to move around and be social,” Murren said.
Expected to open by summer 2014, the observation wheel at the Linq will feature 28-passenger cabins and will stand taller than the Singapore Flyer and the London Eye to be the tallest attraction of its kind in the world.