2 Huge Projects May Help Speed Recovery of Las Vegas
However, two recently announced, large-scale renovation efforts on choice pieces of real estate -- along with other key projects soon coming onstream -- should help juice the economy of this glitziest of American cities.
Caesars Entertainment (CZR) announced in July it would spend nearly $250 million to spruce up The Quad, a 2,256-room hotel on the Strip (the stretch of South Las Vegas Boulevard home to most of the city's famous casinos and resorts) and north of Flamingo Road.
The facility will also get a name change come Oct. 30 of this year, to LINQ Hotel & Casino. This ties the hotel more strongly with the adjacent property Caesars owns, simply known as The LINQ. The oddly spelled complex is a popular shopping, dining and entertainment plaza, so it's probably a good marketing strategy for Caesars to rechristen the hotel after it.
The renovation should help breathe some life into The Quad and bring it up to the standards of some of its neighbors on The Strip. Or, in the words of Caesars' chief marketing officer, make it the venue of "a complete lifestyle experience at one of the best locations in Las Vegas."
Stay With the Ghost of Elvis
Renovations are also on the way at another massive Vegas property, the nearly 3,000-room hotel now known as the Westgate Las Vegas, on Paradise Road. It's named after its new owner, the privately owned timeshare operator Westgate Resorts.
The complex has a long and storied history. When opened in 1969 as The International Hotel, it was the largest hotel in the world. No less a personage than Elvis Presley resided in one of the International's penthouses; he also performed in the hotel's theater.
Since then, the structure has gone through several ownership changes. The record for longest tenure belongs to the company now known as Hilton Worldwide (HLT), which purchased the property in 1970 and held it for nearly 30 years.
Westgate Resorts bought the building from investment bank Goldman Sachs (GS) in a deal announced at the end of June. The price was not disclosed. Westgate promises to "renovate every square inch" of its new asset, spending around $250 million to do so. Some accommodations, unsurprisingly, will become time shares.
These aren't the only projects that'll change the character of the Strip and its environs.
Later this month, a newcomer to the Vegas resort scene, privately held restaurant and nightclub concern SBE Entertainment, will open the doors of its sparkling 1,620-room SLS Las Vegas. This is a $415 million refurbishment of what was once the Sahara Hotel & Casino located just north of Westgate Las Vegas.
Just down the Strip, fists will pump and lighters will be waved at City of Rock. The 33-acre campus, which will have capacity for 80,000 or so people, is to be home to the U.S. version of the durable Rock in Rio festival. The initial extravaganza is scheduled for 2015, and the campus will be repurposed for other events when Rio's not in town.
A consortium of investors, including longtime Vegas high roller MGM Resorts International (MGM), is behind the $20 million project.
That isn't the only asset the company's paying for. September will see the official opening of its 1,100-room Delano Las Vegas, an $80 million repurposing of its existing THEhotel in the company's sprawling Mandalay Bay complex.
Rolling for Prosperity
Vegas needs an economic lift. Although the city has improved certain key financial metrics over the past few years, its annual gross domestic product (as of 2012) was hovering slightly below its pre-recession peak. Meanwhile, in terms of unemployment, Vegas' most recent monthly rate is 7.9 percent, well above the national rate of 6.1 percent.
On the plus side, more visitors are flowing in. In the first six months of the year, nearly 20.7 million of them arrived, an improvement of over 4 percent on a year-over-year basis.
Collectively, Vegas hopes for this momentum to keep rolling, like a hot pair of dice.
Motley Fool contributor Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends Goldman Sachs. Try any Motley Fool newsletter service free for 30 days.