The piecemeal opening of MGM MIRAGE’s CityCenter complex is off to a solid start, an analyst said Tuesday, but he continued to be concerned about the Las Vegas Strip’s prospects for next year.
While the recession is not the ideal time to open a gambling resort, plans for the $8.5 billion CityCenter — a joint project between MGM MIRAGE (MGM) and Dubai World — had long been established. The 67-acre, six-tower complex of hotels, restaurants, retail shops and a casino began with the roll out of the Vdara Hotel & Spa, a condo-hotel property, earlier this month. The Crystals retail shopping mall and Mandarin Oriental hotel also recently opened.
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Brian McGill of Janney Capital Markets said in a client note that the Vdara had a fairly smooth opening, with Crystals seeing steady traffic even though it had a limited number of stores open.
Las Vegas came under hard times during the economic downturn as gamblers decided to spend less and frequent local casinos in an effort to curtail their spending.
Consequently, many experts worry about the opening of the Aria Resort & Casino, set for next week (Wednesday), as some fear the property’s 4,004 hotel rooms will saturate the Las Vegas market.
McGill said his talks with those in the industry indicate that the Las Vegas Strip is likely to remain challenged next year on the new supply of hotel rooms ramping up, as well as ongoing soft group and convention bookings in early 2010.
But the analyst said the forecast appears brighter for 2011, as bookings – especially convention bookings – seem to be stronger.
McGill reiterated a "Sell" rating on MGM MIRAGE.
The casino operator’s stock shed 15 cents to $10.22 in morning trading.
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