Two Way Hard Three | Las Vegas Casino & Design Blog

Unfortunately, the hyperlink was not working and since this is a pay site I could not read the article for myself. However, if this guy really said that he thought Wynn bought the land for the golf course then he is too stupid to be employed by the WSJ and should be fired.

I'm a bit leery of quoting the whole article since it is copyrighted, but here's the relevant passage:

"To make room for the Wynn Las Vegas, he bought and blew up the historic Desert Inn, which had opened (with 300 rooms and a third-floor Sky Lounge) in 1950, mainly because it came with the only 18-hole golf course left on the Strip."

The implication being that the main attraction to the site was the golf course.

If the course is still there in 10 years, or even 5, I will be surprised.

Hunter, I tended to blow off the article since his critique mainly focused on the property's architecture and decor, rather than actual services....like you said, he praised the experiences at the restaurants and the show. Although the reviews of Wynn LV that I've seen so far have been mixed, I'm fairly confident that this place is no dump.

Hey Hunter, does WYNN Las Vegas have any Resort Rooms with two beds?

The following is from a post on Yahoo's WYNN message board. When I made reservations for three nights at Wynn starting June 19, I'm sure the standard room rate was well over $200. It is now $199/night which makes my casino rate of $159 look less of a bargain. All three nights are available at $199. Bellagio's site shows availability for only two nights at $159. The third night is available only as a check-in date at a rate of $450/night for the rest of the week.
Venetian's rates are $169/night for three nights.

It is interesting that Bellagio's rates are very strong June 21 and beyond compared to Wynn.


>>07:56 WYNN Wynn Resorts rate survey shows erosion in rate premium vs Bellagio and Venetian - TWP (47.22 )

Thomas Weisel's room rate survey shows erosion in Wynn LV's quoted Q2 rack rates and the resort now appears to be pricing at a discount to Bellagio and Venetian. Despite the excitement of the opening and big crowds, the firm views the room rate trends as a potential concern. Although WYNN has traded down sharply, firm is concerned about rate trends, capacity growth in Macau and the relative multiple is high vs. the group (10.9x vs. 9.3x). Firm derives a $45-$50 asset value, down from a prior $60-$65. <<

I think the eroding room rates at Wynn was pretty predictable and relates back to the idea of saturation in the high-end market. Even if we're being generous and only include Venetian, Bellagio and Wynn in the "high-end" market, we're talking about approximately 9 or 10,000 rooms. To maintain $200+ midweek summer rates would be exceptionally hard. There is a limited number of people who can afford to stay in these hotels and among them an even smaller group that is willing to pay that much. In addition, the mixed reviews of Wynn certainly haven't helped.

Personally, I think building MORE high-end resorts like Palazzo, Encore and Fontainebleau's new property is quite simply a mistake. There is certainly room for expansion in Vegas but developers should focus on the middle/upper-middle market.

Yes, there are resort rooms with 2 queens.

I think Ben has some interesting points. I would add that the development of high end condo's will put additional pressure on the high end market as many wealthy gamblers will buy condo's rather than stay at hotelswith high rates(although the big gamblers get RFB comped anyway). The addition of Turnberry Place and the new Trump building is leading the development down a different path than just the hotel/casino. I think the real question is when will the saturation point be hit. Every time people have believed it was there, some new sets of development bring even more people in. Even the broad increase in gaming in S. Calif and elswhere has not stopped tourists from going to see Las Vegas. As the high end evolves, Resorts such as Venetian will move downscale to fill rooms(Actually I think this hotel gets many of its rooms to conventioneers anyway). In reading the website for McCarran airport there is a capacity issue there at about 53,000,000 passenger/year. They have already acquired a huge parcel of land about 30 mi south to build a new airport. Now lets look ahead 50 years and wonder what could be done with all that McCarran airport land?? And I ask where will they get all the water from? This is the desert after all. I think the growth of Las Vegas will track with the spending patterns of the baby boom. As they reach retirement, they will have to decide what to do with all that money they have saved. After they die off there will be a long period of stagnancy.

Ben said, >>There is certainly room for expansion in Vegas but developers should focus on the middle/upper-middle market.<<

I think MGM Mirage recognizes that and is positioning all their properties to welcome middle/upper-middle and high-end customers. MGM Grand, which was low-middle market when it opened now has been repositioned to cater to all market segments from tour groups to conventions to high-end. Bellagio seems to be the reverse to me. It still caters to high-end, but some of their packages and rates are clearly designed for mid-market. Same with Venetian. Wynn doesn't have this capability. A $3 Billion property has to stick with high-end customers and players to make it. It will be interesting to see how it all shakes out. I'm looking forward to being at Wynn in three weeks or so.

Tom commented on the high-end condos. I just don't get the condo hotels like MGM's Residences. A million bucks for a two bedroom condo which is like three standard hotel rooms put together. It gives MGM added room capacity when these suites are rented out by the owners, and the owners pay to build the additional capacity.
Vegas is fascinating business!

Ben said, >>There is certainly room for expansion in Vegas but developers should focus on the middle/upper-middle market.

Ben,
You obviously don't know Las Vegas. It is in the Top 5 of vacation destinations in the world. It is the top international destination for foreigners coming to the US. The demand for Las Vegas rooms is at over 95%. Compare that to Hawaii, Orlando, or even New York. Las Vegas hotels are cheap compared to anything of their nature in another Metropolitan area. (Chicago, Miami, Los Angeles, NY, DC and more...)

I think that you underestimate the number of business travelers who travel to Las Vegas as well. The room rates in Las Vegas are NOT based on how much the casino cost. They are based on demand. If they were, it would not be the Wynn or Bellagio's rooms that are the most expensive, but Caesar's Palace (when totaled, CP cost more than 8 Billion in it's entirety).

Lastly, due to the removal of numerous lower-end properties (Boardwalk, Stardust, and Westward Ho), the properties that are left will have even less vacancy. Think their rates might climb a bit? It's my hypothesis, that this is why Tropicana, New Frontier, and Imperial Palace have yet to announce anything. Everyone else keeps jumping in front of them, driving their earnings by a few points.

where'd you get 8 billion for the cost of CP??