What Are Starwood’s Plans in Las Vegas?

Andrew Calvo | November 26, 2007 | 0 Comments

In May 2006, while the W Las Vegas was still a viable project (it was canceled in May of this year when Starwood Hotels & Resorts pulled out, uncomfortable with the prospect of selling 3,000 condos in a declining real estate market) Starwood Hotels & Resorts purchased 63 acres of land known as Weststate in the South West corner of the Las Vegas Strip with Edge Resorts (their partner at the time for the W Las Vegas) and TriStar Capital/RFR Holdings, each partnership owns 1/3 interest in the property which was purchased for an estimated $203 million.

Graphic of the Weststate land parcel

At the time the purchase came to light, very little was said about the property – what was going there, when it was going to be built, except a few small bits of information.

Plans would not be announced for another “1 to 3 years”
It would most likely not be a convention center property due to its close proximity to Mandalay Bay Convention Center
It would probably contain 2 or 3 Starwood branded hotels
It most likely would be a destination resort and be very noticeable – since it would be one of the first major casinos to be seen by those driving up I-15 from California.

What makes this project so intriguing is its size, thus the potential of what can be done on the site – for example, its 9 acres smaller than MGM’s City Center project which is currently one of the largest construction projects in the nation, and 24 acres smaller than Boyd Gaming’s Echelon project, potentially making the Weststate property the 3rd largest resort in Las Vegas based on building square footage. Weststate can easily hold multiple hotels, casinos, retail buildings, as well as condos and vacation ownership/timeshare units, and also contribute to the growth of the Las Vegas strip on the West Side of I-15. (Currently the Rio & The Palms are the only other major resorts on the west side of I-15 – but Weststate can easily herald in a new development era.) Since Starwood is no longer in the casino business (it sold Caesars World in 1998), its obvious that Starwood’s interest in the property is purely the hotel development – and the type of hotel Starwood would be building is a tad bigger than their new concepts aloft or element (both of which are being built in other locations in Las Vegas as we speak).

Aerial Image of Weststate land parcel

I’m predicting a number of large hotels (totaling 4,000 rooms or more) to be built on the property. But which ones? W Hotels definitely needs a presence in Las Vegas, the Las Vegas market and the W Hotel’s target market are practically one and the same, and since the initial W Las Vegas fell through – its a great opportunity for W Las Vegas Take II to be built. In addition, I think Starwood will build a very high end hotel as well as a mid-market hotel. Perhaps a St Regis or LeMeridien, and then a Sheraton or Westin?

Currently Starwood does manage two hotels in Las Vegas – the Planet Hollywood (of which Starwood is a 50% partner) where the lodging component is a Sheraton Resort, and the Westin Cesuarina, which is primarily a hotel, but has a small gaming floor.

The question still remains: How should the property be branded?

I think except for the W or the St Regis brand Starwood will not brand the hotel by it’s name, it would most likely be branded similar to how Planet Hollywood is branded, or how the Swan & Dolphin in Disney World is branded (the Swan is a Westin, and the Dolphin is a Sheraton) – the hotel brand will not be advertised as much as the primary casino resort is, yet Starwood will be able to receive revenue and utilize their Preferred Guest program as though it’s a regular hotel..

Even though Starwood is a 1/3 partner in the project – Starwood is still a lodging company and I do not see them getting into the project for anything more than a hotel component – and probably a timeshare/fractional ownership component as well.

No matter what, in the next few years I expect to hear some major news from that piece of land – while its not directly on the strip, its close enough to play a major part in the further development of Las Vegas and possibly promote development west of I-15, plus the with the cancellation of the W Las Vegas, I know Starwood is more eager than ever to make their mark in Sin City.

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