This is pretty interesting because it’s the first time that a hotel is being based on a “restaurant experience”. In fact, I cant even think of a restaurant within a boutique hotel that considers itself based on the hotel brand – although Jose Andres’ Bazaar at the SLS Hotel in LA seems to be pretty close.

This is a different approach for the Caesars brand and Caesars Entertainment as well since I cannot think of another instance where they have a different hotel brand within one of their properties other than the casino branded hotel. On the other end of the spectrum is MGM Resorts, Caesars Entertainment’s biggest competitor which has been building these sub-brands within their properties for years.

As an example, look at the Mandalay Bay which has both a Four Seasons Hotel and “THE hotel” in addition to a more basic Mandalay Bay hotel stay.. MGM Grand has “The Mansion” (a super exclusive hotel brand connected to the property, but deeply hidden, it isn’t bookable by the general public either – you need to be a high roller and invited to stay there), SkyLofts and a much, much smaller sub-brand – Signature by MGM Grand.

Anyone who is familiar with Caesars will applaud this decision because the Centurion Tower has been underwhelming for years, rightly so as it was the first tower to open in 1970 and has started to show its age. What’s interesting is how it was decided to renovate the Centurion Tower vs completing the Octavis Tower which was left unfinished after the recent recession. (The building looks finished from the outside, but is empty on the inside.)

The plan is to create a completely separate experience for the Nobu Hotel, with its own entrance and check-in desk instead of combining it with the rest of the Caesars property as is done now. Overall, this is a great idea and probably a win-win for both parties – Caesars & Nobu Hospitality, as encourages a new crowd to come to the Caesars Resort in Vegas, launches a new hotel brand without requiring as large of a capital outlay and lastly allows Caesars Entertainment to dip its waters in a new concept which can easily be replicated in their Atlantic City Casinos such as Bally’s and Caesars.

andrew@alconic-inc.com

Morgan Stanley — after failing to raise money for Revel last month — is launching a new $1.15 billion debt offering so Revel can finish construction, sources said, confirming a Standard & Poor’s LCD report.

The bank, which has hired JPMorgan to sell the loans, meets potential investors today.

Christie’s motivation seems to be based on the need for more jobs in NJ. What Christie seems to be ignoring is the fact that Atlantic City is losing a lot of visitors to Philadelphia and other out-of-state casinos.

One thing that will help projects like Revel and the Borgata is it’s focus on more than just gambling.. Atlantic City’s “Super casinos” such as Borgata, Revel and even Harrah’s and the Tropicana are able to tap not just the gambling public by having restaurants branded by celebrity chefs, popular nightclub venues, and headlining acts that cater more toward the younger set vs the platinum set.

No matter what, the finishing of Revel will give Atlantic City a big morale boost, and when its finished – bring in more visitors eager to see this new casino who will trickle out to the other casinos in town.

andrew@alconic-inc.com

I have to say, it’s hard to believe that this day actually came – almost a year later than it was originally supposed to open under the original developer Bruce Eichner, and 5 years after the project had its groundbreaking. In fact, a lot of people thought it would never open at all. It’s interesting to note that the Cosmopolitans neighbor – MGM’s CityCenter – took less time and is much, much much bigger.

I wanted to share some sidenotes about the Cosmopolitan and it’s development that seem to have been lost in the shuffle of it’s grand opening today..

-Unlike the original plans, condos will only be in the West Tower (the West Tower is the one not on the Las Vegas Strip), originally the condos were to be split between the two towers and intermixed with hotel rooms.

-There are about 2,000 condos available for sale still, only 214 are under contract – possibly to close on Jan 1st. (via LV Review Journal)

-Bruce Eichner, the original developer of the Cosmopolitan, is already off onto another project – just like he said he would be in the WSJ article I posted to in my first Cosmopolitan Las Vegas post. He is looking to finish the troubled One Madison Park highrise right on NYC’s Madison Square Park, an absolutely beautiful building which is going through the same troubles that the Cosmopolitan once went through – at least this time he’s trying to be the savior instead of looking for one.

-The interiors of the Cosmopolitan were designed by David Rockwell and the Rockwell Group – he’s the same person who created Starwood’s aLoft interiors, and a favorite restaurant of mine which is a little closer to home – Bobbys Burger Palace. Apparently Bruce’s original interior elements contained 20-ft high dancing robots, which to me would be just ridiculous.

-The Cosmopolitan project is still owned by Deutsche Bank, and Deutsche intends to make the project a long term investment and play an active role in its management. Out of all the other major Vegas/Atlantic City casino projects, Deutsche is the only one who actually stuck to it’s guns and finished the project in this economy. They get kudos in my book for that. Recently, Morgan Stanley let it be known via an SEC filing that they would let their Revel Atlantic City project essentially sit vacant and unfinished for years until the economy bounces back since they have been unable to find a buyer. That’s even after Morgan Stanley was willing to take no money for the project until the investor made a 20% return on their investment of at least $1.2 billion to finish and open the development.  The Fountainebleu in Vegas, which is over 70% finished – a lot of rooms were completely furnished – was purchased for only $150 million by Carl Icahn, leaving the lenders with almost a $1 billion loss.. Wow.. I think that in 5 to 10 years Deutsche Bank is going to look great by finishing this project and not selling it for a song. This economy is tough though, and if you don’t have the capital, well – you’re hands are tied. Deutsche Bank is a large, worldwide company, but they are still almost have the size of JP Morgan Chase & Bank of America by assets.

-Ok, I have to make one mention of the interior of the hotel which has been bugging me until today.. You know those 8 pillars in the lobby (if you’ve seen pictures or video of the lobby, you’ll know what I mean) are full video walls on all four sides, floor to ceiling, no projection screens, no 3D images, no LED walls, they are full motion video screens. Wow.

Best of luck to the Cosmopolitan! Only 40 more minutes until the first bet is placed.

andrew@alconic-inc.com

Not much has been said about the property or the project – in fact the former Renaissance has been closed and deserted since 2007 leading to speculation as to what will go there.

Last week, with Hyatt Hotels, Starwood Capital announced that they will be starting a joint venture to open an Andaz Resort & Residences on the property, it’s due to open in the fourth quarter of 2012.

The Former Renaissance Wailea

Starwood Capital already has a number of Hyatt Hotels in their portfolio, off the top of my head I know they own the Hyatt Regency New Orleans, and one in Chicago as well, so dealing with Global Hyatt isn’t exactly something new to them (I’m sure some will find that hard to believe!) In fact, this joint venture is a very good deal for Starwood Capital.

According to their press release, Hyatt will be contributing around $90 million for the renovation and improvements for the property, and the press release didn’t mention it, but Starwood’s biggest expense will most likely just be the land and it’s existing buildings. That’s a HUGE discount from the initial capital expense Starwood would have had to incur for the construction of the Baccarat hotel; not only would they have to tear down the existing buildings, but Baccarat required a completely different site plan and appearance than exists on the current site. Plus, even though Andaz isn’t a W or Baccarat or other Barry Sternlicht creation – the Andaz brand does have the design and architecture ethos that is typical for a Sternlicht creation.

I’ll be interested to see how the property ends up looking – all the Andaz’s so far have not disappointed in appearance and unique style, I’m sure this one won’t disappoint either.

andrew@alconic-inc.com

Today at Wyndham Worldwide’s first global brand conference, it was announced that Wyndham has licensed the Planet Hollywood name and likeness, enabling it to begin franchising hotels using the brand throughout the world.

This is a great coup for Robert Earl who will finally be able to rapidly expand its presence with almost no capital and begin collecting licensing and franchising fees. Currently the only Planet Hollywood Hotel is located in Las Vegas and it was recently purchased by Harrah’s Resorts, Earl was previously a part owner in it along with Starwood Hotels & Resorts who used to operate the hotel portion of the resort.

I consider the Hard Rock & Planet Hollywood brands very similar, playing on the consumers desire to expose themselves to celebrities, Hollywood, movies, music, etc.

With that said, I’m not so convinced that there will be a very big market for the Planet Hollywood brand (similar to the Hard Rock Hotels brand really) – I can’t see Planet Hollywood Hotels becoming as ubiquitous Sheraton, or Hilton – I envision them located in large areas that can sustain a resort/convention center hotel – Orlando, LA, etc. The Planet Hollywood name evokes fun, craziness and over the top/big; which may be a bit more than most people want.

It will be interesting to see how the brand comes about.

andrew@alconic-inc.com

Supposedly the deal that Trump is looking for would swap the land under the property and the partner to put up the money for renovations and an addition adding about 600 more rooms to the property.

The type of partners Trump Entertainment Resorts is looking for: Planet Hollywood or Hard Rock Hotel

Both are popular brands that have wanted to open a Atlantic City Casino outpost for awhile now (both have restaurants in AC, but not an hotel resort based on the brands)

This could be a good sign that Trump is finally getting serious about Atlantic City and putting his money where is mouth is; you know he’s trying to really make something work if hes willing to share the name of his property (or even possibly replace it) with another brand name.

Bravo to Donald Trump finally toning down his ego.

andrew@alconic-inc.com

My friends over at VegasChatter seem to think this could be the first Barry Sternlicht-ing of Vegas since the days he used to operate CaesarsWorld in the 90s. I’m not so convinced.

Sure, Sternlicht and Starwood have been involved with trying to take over the Riveria for years now.. Just do a Google search for Rig Acquisitions Sternlicht and you’ll see what I mean. But there is something else that Sternlicht sees in the property – it can’t be the building, its small compared to the rest of the Vegas casinos, its not in the ‘heart’ of the Strip – in fact its almost in no-man’s land compared to CityCenter and other ‘it’ casinos; its surrounded by the unfinished shells of Echelon Place & the Fontainebleau and casinos of yesteryear like the Las Vegas Hilton & Circus Circus.

It could very well be that Sternlicht sees the potential in the site come, 10 – 20 years when projects like Echelons Place or The Plaza ever get off the ground (if they ever do that is!)

Or.

Sternlicht could just see a good deal.. after all, the Riveria has been on its last legs for a few years now – before any economic downturn even started, and buying a mortgage for 50 cents on the dollar, well.. that’s just a good investment, and that’s really what Starwood Capital is all about.

andrew@alconic-inc.com

To amend and restate the Certificate of Incorporation of the Company to change the name of the Company from “MGM MIRAGE” to “MGM Resorts International” 

This change, if approved (and it most likely will) will take effect immediately – in fact MGM Mirage already has the new domain name up and running – just redirecting to their current site. (http://www.mgmresortsinternational.com) 

As companies grow and evolve over the years – its sometimes necessary for them to change their name to better reflect the direction they are heading in. Some examples which come to mind are Apple Computer changing to Apple, Inc. in January 2007, or who could forget Radio Shack’s corporate name from 1963 until May 2000 - Tandy Corporation. 

There has been some speculation that the reason MGM is dropping the Mirage name is to distance itself from Steve Wynn, who sold Mirage Resorts to MGM Grand, but that sounds too much like a conspiracy theory when it looks like all MGM is trying to do is better reflect their growing stable of businesses and international footprint. 

When MGM Grand, Inc and Mirage Resorts, Inc first merged, each property contained gambling, and was located within the Continental US. Now, MGM-MIRAGE now has a number of non-gambling properties in the planning stages, and they’ve also started to franchise some of their brands through MGM-MIRAGE Hospitality. Plus their footprint now reaches beyond the shores of America from Dubai, to Vietnam and Macau. 

An example of the MGM brands being franchised can be found in the Dubai Pearl development, where they are constructing Bellagio Residences and Hotel, MGM Grand Hote and a Skyloft Hotel (based upon the Skylofts at MGM Grand in Las Vegas.) Two brands that MGM-MIRAGE Hospitality has not really provided details on is their mx and emblem brands which were mentioned in a profile done by Hotels Magazine back in 2008, but that magazine has since shut down their website. 

While I’m sure the brand recognition will help fill these hotel-only resort properties, I think it will be interesting to see how people will respond to going into an MGM Grand w/o being able to gamble. 

andrew@alconic-inc.com 

The new resort will be built using almost the same footprint as the Pop Century Phase II was going to use, although obviously its going to be focused on Disney’s Animation Properties.

Aerial Shot of Pop Century Resort and Unfinished Art of Animation Resort

Rear of Main Bldg with Unfinished Building Outlines

Front of Main Unfinished Building

 One major difference between the Pop Century Layout and the Art of Animation Layout will be the room count and type – there will be a total of almost 2,000 rooms, but only 864 of them will be traditional hotel rooms – the other 1,120 rooms will be suites which can hold up to 6 people.

Disney’s Pop Century resort has a greater number of rooms but with the addition of the suites at the Art of Animation, both resorts will be able to hold approximately the same amount of guests – 2,800 total.

This holds promise for the return of the travel industry as Disney finally has enough faith to begin building (finishing) a resort project that was on hold since 2003. Although it is worth mentioning that this is one of the Disney Value Resorts – so it seems as though tourists are becoming more price conscious in their lodging choices when they go on vacation.

andrew@alconic-inc.com

Another day, another casino in the sights of the Starwood Capital Group.

What’s going on here?

It’s interesting to watch how Starwood Capital has shown so much interest in Las Vegas casinos over the past month or so – the past few years even if you consider their initial bid for the Riveria on the strip.

Although its all rumors at this point, Bloomberg Business Week has a story about Starwood Capital’s (and Colony Capital’s) interest in purchasing the Rio casino from Harrahs. Harrahs has been looking to divest the property since they purchased the Planet Hollywood and is looking for interested bidders. Harrahs purcahsed the Rio in 1998 for $888 million, and according to the Business Week article – the property is only worth $500 million now.  

So why are all these private equity firms looking to get into the casino business? Its interesting to watch Carl Icahn place a bid on almost every project in Atlantic City & Las Vegas that is having financial difficulty, Starwood Capital’s interest in the Riveria and now apparently the Rio, along with Colony Capital’s current ownership of the Hilton Las Vegas and Atlantic City. Why?

I’d think that it would be too much trouble to go through the gambling licensing procedures for a private equity firm to even consider dabbling in this, but if you look at the history of these three firms – they have gambling in their blood.

Colony Capital has owned the Hilton in Las Vegas since 2004, the Atlantic City Hilton since 2005 and Resorts International since 2000.

Carl Icahn purchased the Sands casino in Atlantic City in the early 2000′s but quickly sold it to Pinnacle Gaming, but now he owns the unfinished Fontainebleau and the Tropicana in Atlantic City

Barry Sternlicht, from the Starwood Capital Group was probably the first out of these three to get into the casino business with his purchase of ITT-Sheraton which included Caesars World in I believe 1998.

Its interesting to see what everyones intention will be – its known that casinos are great for their free cash flow – something a Private Equity firm loves, but its obvious that some people look at the purchase of a casino as just a passing investment – similar to how Carl Icahn has looked at his investment in the Sands in Atlantic City and possibly how he will look at the Fontainebleau once the economy picks up.

andrew@alconic-inc.com