Apparently, Dubai World’s debt trouble hasn’t stalled the opening of Las Vegas’s new CityCenter, which is owned by Dubai World and MGM Mirage.
CityCenter opens on Tuesday, and some fear it could destroy Vegas hotel room rates given that it adds a 4,004 room Aria hotel and casino to the market.
This amounts to a 4% increase in Vegas’s room supply, all in one go.
This new facility is oddly a huge bet on a weak market, given that it cost $8.5 billion. Yet given that it is already built, Dubai World and MGM Mirage probably have no other choice.
Thus everyone’s just hoping for a Vegas rebound.
AP: “We’re in a 12-round fight. The first six rounds, you guys got beat up,” Tony Alamo of the Nevada Gaming Commission told CityCenter owners MGM Mirage and Dubai World when Aria’s licence was approved.
“We’re putting all our eggs in the ‘grow-the-market’ basket. I would be lying to you if I wasn’t concerned — that’s a reality,” he said. “This is not just the company, it’s the state.”
When The Mirage opened in 1989, it launched two decades of expansion that more than doubled the number of rooms in Las Vegas to some 141,000 today. A record 39.2 million visitors came to Sin City in 2007, but that dropped to 37.5 million last year as the recession kept many people away.
This better be one heck of a Vegas rebound. In addition to CityCenter’s 4,004 new rooms, another three competing hotels are under construction and will add another 9,390. Basically, we’ll get a ~15% jump in room supply within about two years. For the sake of existing hotels, hopefully these projects go bankrupt before completion. Read the full article here.