Features

High stakes

22 Feb 2010 by BusinessTraveller

Las Vegas is fighting back from the recession with its most ambitious project yet. Michelle Mannion reports.

Early last year, when US president Barack Obama laid out how he expected financial firms to behave after being bailed out by the government – “You can’t get corporate jets; you can’t take a trip to Las Vegas on the taxpayers’ dime” – he probably didn’t foresee the impact it would have on the Nevada city. Conscious of negative press, many companies relocated their meetings away from North America’s convention capital, at a time when its huge leisure market was already reeling from the recession.

“From a perception standpoint that was devastating,” says Gail Fitzgerald, vice-president of hotel sales and marketing for Aria, part of Vegas’s new City Center complex. “It wasn’t that some of these firms couldn’t afford to come here – they were afraid to show they could. It was very, very difficult.”

Still, a year is a long time in Las Vegas, and as you’d expect from a city built in the middle of the desert, it came out fighting. Cue a concerted effort to tempt people back, with slashed hotel rates and, reportedly, improved odds on the casino floors.

As John Bischoff, vice-president for international brand strategy at the Las Vegas Convention and Visitors Authority (LVCVA), explains, bringing back the business traveller has been a key focus. “With the government’s support we’ve been getting the word out that serious business is done in Vegas – so much so that the president visited and held a conference here and life has returned to normal,” he says. “We are happy there are indications that the ‘Obama effect’ has subsided.”

In this, it has been aided by two major boosts to its profile. The first was the October launch by British Airways of direct flights from London Heathrow, opening up Vegas to major cities across Europe (see online news October 27, 2009, and Route of the Month, December 2009 print edition).

The new route was met rapturously in Vegas, with larger-than-life mayor Oscar Goodman proclaiming it “a perfect link between a great city and a great city”.

The hope is that it will kick-start services from many more great cities. First up is XL Airways France, which is set to start direct twice-weekly flights from Paris in May. “It’s kind of like the BA ‘halo effect’ – once it announced it was going to be flying, XL was able to put together a sustainable business model,” Bischoff says. “I think BA will start to validate our plan to have the Vegas brand seep into Europe.”

With this in mind, construction of a new international terminal at McCarran airport is under way. “It’s on schedule and on budget and will come online mid-2012,” he says.

The other big news was the much-anticipated launch of City Center in December. Dubbed “Las Vegas’s biggest gamble”, MGM Mirage’s US$8.5 billion (£5.2 billion) “urban resort destination” is the largest private construction project in US history. It’s located on the Strip and comprises four high-end hotels (totalling about 6,000 rooms), spas, shopping, private residences, meeting space, and even an Elvis show.

So far, so Vegas – but City Center is a new departure. To start with, the complex is packed into “only” 27 hectares – and while that might seem huge, bear in mind that many of the super-hotels here cover that area by themselves. The idea is that it’s a city within a city, with a dense, metropolis feel.

It also boasts contemporary design far removed from some of the gaudy creations found elsewhere on the Strip, with a team of architects including Foster and Partners and Daniel Libeskind. “From day one the decision was that there wouldn’t necessarily be a theme, that the architecture would speak for itself,” says Fitzgerald at Aria. “For example, from the outside Aria is a lot of steel and glass, and then when you come inside it’s very warm – the designers used textures and colours that celebrate nature. It also feels smaller than it is – it’s hard to do that with a 4,000-room hotel but people say there is this feeling inside that it’s not that vast.”

Even more unusual is that only one of the hotels – Aria – has a casino. This reflects how Vegas has been rebranding itself as more than a gambling Mecca, with its world-class dining, shopping and entertainment. “It’s a much less important part of the offering now,” Bischoff says. “The trend started four or five years ago, when non-gaming revenue surpassed gaming revenue. Now 53 cents of every dollar is non-gaming. We’ll happily cede the ‘gaming capital of the world’ title to Macau.”

Perhaps one of the most surprising aspects is that City Center has a Mandarin Oriental, a brand as far from the traditional view of Vegas as you can get. But Rajesh Jhingon, its general manager, says the company had no hesitation about signing up. “Pundits say the city redefines itself every nine to ten years, starting with the Mirage and then the Bellagio about ten years ago, and every time it’s done something like this it’s had a huge social and economic impact,” he says. “So when City Center was coming together, this high-end conglomerate with some of the best architects and designers in the world, it was perfect. We get to retain our Oriental heritage, while being part of this fantastic contemporary design.”

City Centre has certainly attracted controversy, not least regarding its financing problems – last year, MGM Mirage’s partner in the project, the beleaguered Dubai World, tried to sue the US company for breach of contract – and the timing with which so many hotel rooms were released into a struggling market. But Fitzgerald is confident about its chances of success.

“Having been here for more than 30 years, I can’t tell you how many times I’ve heard that Las Vegas is overbuilt. And somehow we manage, whether we open in good times or bad, to keep giving people a reason to visit,” she says. So how’s business so far? While Fitzgerald won’t reveal Aria’s occupancy figures, she says: “We’re doing pretty well – we got tremendous publicity from a PR standpoint and now it’s just a case of making more people aware that we are here and we are open, the restaurants are fabulous, the property is fabulous and that they should definitely come and have a look themselves.”

CITY CENTRE AT A GLANCE

  • Aria resort and casino – 61-storey, 4,004-room property with 28,000 sqm of meeting space, a 14,000 sqm casino, 17 dining options, a spa with 62 treatment rooms, and Cirque du Soleil’s Viva Elvis show.
  • Vdara hotel and spa – 57-storey non-gaming, non-smoking hotel with 1,495 suites. Also has private residences.
  • Mandarin Oriental – 47-storey property with 392 rooms and 227 residences, about 1,100 sqm of meeting space and the brand’s signature spa offering.
  • Crystals – 46,500 sqm of high-end shops, with brands including Prada and Tiffany.
  • Veer Towers – residential development comprising two 37-storey towers inclined at five-degree angles, each housing about 335 apartments.
  • Still to open: the Harmon hotel – construction issues delayed the opening of this 400-room property, with Lord Foster’s 49-storey design being reduced to 28 floors and the private residence element scrapped. It’s now due to open in late 2010.

Visit citycenter.com, lvcva.com, ba.com.

Report by Michelle Mannion

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