Las Vegas Making Room for Classy Hotels on Its Strip

Article excerpt

LAS VEGAS -- The newest way to make an impression on the garish Las Vegas Strip is through Impressionism itself. The Bellagio, a luxury hotel being built in a city known for its girlie shows, clanging slot machines and the Liberace Museum, will have its hallways graced by about $130 million worth of paintings by the likes of Renoir, Monet and Picasso.

Down the road, Circus Circus Enterprises, known for a flagship hotel that features $29 rooms, $3 all-you-can-eat buffets and trapeze acts high above the blackjack tables, is building a resort that will include a hotel managed by the tony Four Seasons Hotels.

Las Vegas is adding a little elegance to its ebullience, a little class to its crass. The latest mantra here is go upscale: attract upper-middle-income vacationers -- not necessarily avid gamblers -- who might normally head for Palm Springs or La Jolla, Calif.; Scottsdale, Ariz., or Santa Fe, N.M. Behind the move is a change in the economics of Las Vegas. In the past, rooms, food and entertainment were mainly loss leaders, sold cheaply to lure customers into the casino. But as Las Vegas has broadened its appeal, the average visitor is dropping less at the roulette table. At the low-priced Circus Circus hotel, for instance, "A lot of people are sleeping there but not playing the casinos," said Glenn Schaeffer, the president of the parent company. So he and other casino owners are trying something radical: to actually turn a profit on rooms, food, entertainment and shops. In 1996, these nongambling revenues accounted for 47 percent of the Strip's total, up from 42 percent in 1990, according to the Las Vegas Convention and Visitors Authority. Still, the average hotel rate for all of Las Vegas has only crept up to $58, so hotel keepers think there is room to charge even more by making accommodations more luxurious. Higher room rates are also needed to recover the costs of the extravagant theme hotels now under construction, like the $1.5 billion Bellagio, which hopes to charge an average of about $165 a night, a new high for Las Vegas. Risks abound in this strategy, though. Visitors may balk at high room rates if cheap ones are still plentiful, and giant hotels run the danger of becoming impersonal. Most important, though: Can Las Vegas absorb all these new rooms? Las Vegas, of course, has been redefining itself for a decade. In recent years it has shed some of its Sin City reputation and turned itself into a playland for middle-American families by building hotels with theme-park-like attractions -- erupting volcanoes, battling pirates and Greenwich Village street scenes. This attracted mainly low-budget vacationers lured by the inexpensive hotels and meals. But the latest moves, if they succeed, will broaden the market further and help transform this desert hub into a more traditional resort, with golf, tennis, spas, ritzy shopping centers and gourmet restaurants. The Bellagio is far from alone. The Desert Inn is just completing a $200 million renovation aimed at making it Las Vegas' first five- star hotel. While most hotel-casinos require guests to run a gauntlet of slot machines to find the registration desk, the Desert Inn, owned by ITT, features a lobby five stories high, and not a bing or a bong within earshot. Ritz-Carlton Hotel is entering the Las Vegas market, agreeing to manage a 526-room hotel in the new 640-acre Mountain Spa Resort being built on the outskirts of the city by Jack Sommer, owner of the Aladdin Hotel. Ritz-Carlton and Marriott International, which owns 49 percent of Ritz, have also signed letters of intent to manage hotels to be built on the property of the MGM Grand. ITT's Caesars Palace, long considered one of the most upscale hotels, has just added a new, even more luxurious 1,200-room tower. The new establishments are not necessarily aimed at the high rollers who bet up to $200,000 on a single hand of baccarat. …


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