Hooray for Hollywood!

Nov 20, 2007 6:17 AM

Although it’s been over two years since Aladdin’s lamp went up in smoke, Planet Hollywood — which was transformed out of the former Aladdin hotel/casino — finally got around to having its "official" grand opening last weekend.

But it’s taken more than two years for Planet Hollywood founder Robert Earl to get the Strip casino on track. The 56-year-old British entrepreneur put together a group in 2004 to buy the Aladdin out of bankruptcy.

Since then, the renovation’s been a slow but steady process, ensuring everything kept within the property’s Hooray for Hollywood theme.

Ahead of last weekend’s grand opening, the re-branded Planet Hollywood casino-hotel got rid of most vestiges of the Middle Eastern-themed property where business collapsed after the Sept. 11 attacks.

Plastic jewel-encrusted pillars were replaced by textured glass. There’s no more 20-foot-long Aladdin’s lamp in the casino.

And each room now features a unique piece of Planet Hollywood memorabilia, like the leather jacket John Travolta wore in "Pulp Fiction," generating licensing revenue for Planet Hollywood International Inc., of which Earl is still the CEO.

As of June, the casino property was still losing money following its soft launch in April, about $15 million in the quarter, according to a filing with the Securities and Exchange Commission.

Earl says despite the construction-impaired earnings, he and his partners have likely already doubled an $800 million investment — thanks to rising land values helped largely by MGM Mirage Inc.’s $7.8 billion CityCenter going up across the street.

"We’re sitting on a very large profit even before we perform," he said. "We bought it inexpensively just at the right time. Everyone else in the industry says we stole it."

Earl’s dream of opening a Planet Hollywood casino on the Strip dates back to at least 1996, when he tried to team up with ITT Corp., then owner of Caesars Palace, to rebuild the Desert Inn.

By the time ITT was bought out by Starwood Hotels & Resorts Worldwide Inc. two years later, plans for a Planet Hollywood casino had been dropped. Wynn Las Vegas now stands where the Desert Inn had been located.

But a series of design flaws and marketing gaps at the rebuilt Aladdin — such as not having a players’ club to track gambling action, poor parking and access from the Strip — helped speed its bankruptcy in 2003 and gave Earl another chance.

Earl now owns roughly 35 percent of the property, with Planet Hollywood International investor Bay Harbour Management LC owning another 35 percent, Starwood with 15 percent and outside investors the rest.

Not only does the property have a players club, it is tapping into the marketing network of Starwood’s Preferred Guest program, which awards deals to travelers who have frequently stayed at its Westin and Sheraton hotels.

Having bought the 35-acre property for $500 million, plus $300 million in renovations, the owners are also in the desirable position of having gotten in cheaply before real estate prices jumped in the past couple years, Deutsche Bank analyst Bill Lerner said.

"If you own land at half of the value of Strip land today, you’re in a unique position to develop something that’s more mid-market," Lerner said. "It’s relatively attractive."

Weekend Planet Hollywood rooms could be found for late November for an average of $184 a night, compared with $329 at Bellagio across the street and $220 at Paris Las Vegas next door.

Futuristic design changes to the sandstone facade of the Aladdin have improved its chance at attracting walk-in traffic. Entrances from the attached mall also stand out more with bright facades and prominently placed slot machines.

Interior designer Terry Dougall, who redesigned the casino to be more modern and chic, said the entrances from the mall had gotten lost in the artificial sky and former Middle Eastern architecture.

"You could literally walk through the mall and not find the casino," Dougall said. "It’s sort of sacrilegious in Las Vegas, isn’t it?"

Also expected to contribute to the hotel’s future is a series of timeshare towers with 2,700 units being developed by Westgate Resorts Ltd. on four acres. The first phase is to be completed by 2009.

Despite a flashy grand opening weekend, the new Planet Hollywood casino still bears traces of the old Aladdin, a property that first opened in 1966 to replace the non-gambling motel, the Tally Ho.

The 7,000-seat Theater for the Performing Arts, a relic that survived the implosion and rebuilding of the property in 1998, remains an obstacle and guarantees visitors using the parking garage a half-mile walk through the mall to get to the casino.

For now Earl is taking one change at a time. He said he’s learned from the mistakes he made at Planet Hollywood International, which he said expanded too quickly. Still, he has plans for the next Planet Hollywood casino in Atlantic City, N.J., and another in Macau. He said plans are in the process and wouldn’t give details.

"We see four or five big casinos, we don’t see 50," he said. "We’re totally focused on this one first, but I’m always looking to the future."