Las Vegas is forever re-inventing itself
January 02, 2018 3:48 PM
by Phil Hevener
What’s the best response to assumptions based on what appears to be solid evidence aimed at tourists and prospective investors?
The question is well suited to the thinking of resorts executives considering expansion or new projects that will require a billion dollars or more. Yes, we are light years beyond the time when it cost $25 million to build Caesars Palace and $200 million to open Excalibur.
Maybe the estimated $640 million cost of The Mirage and its explosive success caused some designers and analysts to relax their guard because industry followers were convinced the casino entertainment business was on a roll. Too big to fail. Something like that.
That was before industry leaders stumbled over their reaction to what has become known as the Great Recession. It drove the biggest companies in the business toward disaster because the “weather men” in the business failed to see it coming; either that or they failed to anticipate its impact.
Everything looked good. There was no sign of the perfect storm and its potential for bringing expansion on the Strip to a screeching halt as big money sources were turning up their noses at the prospect of lending anything to a Las Vegas business. I’ll bet Steve Wynn, Jim Murren and other senior leaders throughout gaming still have clear memories of President Barack Obama warning companies not to take their bailout money and head to Las Vegas with it.
The President’s warning may have slipped out of his mouth as an attempt at humor, which may have obscured the fact that although the bulk of Las Vegas marketing messages may stress the potential for fun and games, the process of putting it all together to create a destination that hums like a well-oiled machine requires discipline and an understanding of what is attractive to people with money to spend on a good time.
Assumptions are as changeable as the weather report.
“We’ve always got to be thinking about next year’s approach to fun and games; something they won’t find down the street,” said the late Bob Stupak, the creator of Vegas World and the day dreamer who began work on the Stratosphere Tower before turning it over to another company.
So anyway, here we are back at this business of prejudging assumptions about finding the right time and place for the next billion-dollar project.
The $2 billion stadium project that will become home to the Oakland Raiders, has area-wide support and looks like a can’t-miss project, but I should point out this is another of those assumptions that awaits an outcome. Also, we’ve got to give credit to the partnership involving MGM and the big thinkers who combined to create the T-Mobile Arena that has already boosted Southern Nevada into a position among travel destinations with a reputation for big projects.
Steve Wynn says his company would probably not have built his second hotel, the Encore, when he did if the signs of a collapsing economy been more visible. The assumptions have changed as buyer confidence improved and activity increased.
The plan is to have “Paradise Park” up and running in time lure some of the visitors who will be passing his front door. Yes, that is another assumption. Let’s see if it survives the realities that shape competition on the Strip.
Las Vegas is forever re-inventing itself, just like the competitive fast food outlets that keep trying out new products because hamburgers and fries are, well… last year’s news.