Staff & Wire Reports | Although the worldwide economic slowdown and credit crunch has stymied new casino construction on the Las Vegas Strip and beyond, Caesars Palace continues its expansion with the topping off of its new 23-story tower.
Owned by Harrah’s Entertainment Inc., Caesars Palace topped off its 665-room Octavius Tower on Tuesday as part of a $1 billion expansion at the company’s flagship Las Vegas Strip resort.
The Octavius Tower is the sixth at Caesars and is part of an expansion the company hopes will help the hotel-casino compete with planned neighboring luxury resorts.
Gary Selesner, president of Caesars Palace, said expansion plans haven’t changed, despite difficult economic conditions.
"This is all about the future," Selesner said. "We’re building our capacity for the turnaround that will come, whether it’s one, two or three years down the road."
Average Las Vegas hotel room rates for August were $107 per night, down 15.3 percent from August 2007. Occupancy was down, too, with 88.3 percent of rooms filled in August, down 2.9 percent compared with August 2007.
At the same time, some competitors are adding capacity on the Strip even as other projects are delayed or canceled. The largest being built is CityCenter, a six-tower complex being developed by MGM Mirage Inc. in partnership with Dubai World that calls for 4,800 hotel rooms and 2,650 condo-hotel units.
The privately held Harrah’s reported losses of $285.4 million for the first six months of 2008, compared with profits of $422.8 million in the first half of 2007.
Harrah’s chief executive Gary Loveman addressed the company’s plans amid current economic conditions at a private town hall-style meeting at Caesars last week, which a spokesman described as one in a series of regular meetings the company holds quarterly with employees in different cities.
"Mr. Loveman stated in that meeting that while we would be watching our capital as a company, the expansion of the flagship property, Caesars Palace, would go forward," Selesner said. "(Caesars General Manager John Unwin) and I are dealing with the same game plan that we started with, finishing this tower and this convention center at the highest standards in this city."
The rest of the expansion calls for an extra 250,000 square feet of convention space and new pools with a waterfall, pool-side gambling and dining.
Harrah’s, the world’s largest gambling company by revenue, owns or manages 50 casinos.