[BBMW]

True, but Hard Rock actually has done this elsewhere. They may be trying to use it as a trademark.

Originally Posted by Willy702

And Resorts World LV was supposed to have pandas, a slide for adults, and a Great Wall of China look alike.

These things are "proposed" and could happen, but there are no guarantees.

[Willy702]

Originally Posted by BBMW

True, but Hard Rock actually has done this elsewhere. They may be trying to use it as a trademark.

Certainly it could happen, but I think about the logic of such an investment. Mirage probably has about as many rooms as they will ever need. They can spend a relatively minimal amount on refurbishing those compared to the cost of building a new one and have "almost new" rooms to sell.

To build a new hotel structure these days on the Strip is ridiculously expensive, they have little hope of getting a good return on investment there. Building an iconic hotel at a casino generating $500 million a year in revenue with a small effective "tax" and little competition around is one thing, building it in the midst of the most competitive market around is another. The only way they decide to make this big investment is if they decide they have to have much bigger standard rooms like what you get at Venetian or Wynn. That you can't remodel into, you have to accept the size of the rooms as is.

That's really the decision they have to make, are we competing against a room that most of the Strip offers or are we going after the big boys at the top of the market? My guess is 90% likely they decide they are mass market and just put some good money into redoing the property without a significant new build budget.

[longviewJoe]

Originally Posted by Willy702

To build a new hotel structure these days on the Strip is ridiculously expensive, they have little hope of getting a good return on investment there.

Oh wow! Someone better tell these guys they should probably do some research before they buy this place and build their guitar hotel!

[BBMW]

If we're talking about offering room product, you're correct. But lots of casinos, especially in Vegas, have gone way out of their way to create artificial landmarks that don't directly add to revenue in any appreciable way (two Grand Canals, anyone?).

Originally Posted by Willy702

Certainly it could happen, but I think about the logic of such an investment. Mirage probably has about as many rooms as they will ever need. They can spend a relatively minimal amount on refurbishing those compared to the cost of building a new one and have "almost new" rooms to sell.

To build a new hotel structure these days on the Strip is ridiculously expensive, they have little hope of getting a good return on investment there. Building an iconic hotel at a casino generating $500 million a year in revenue with a small effective "tax" and little competition around is one thing, building it in the midst of the most competitive market around is another. The only way they decide to make this big investment is if they decide they have to have much bigger standard rooms like what you get at Venetian or Wynn. That you can't remodel into, you have to accept the size of the rooms as is.

That's really the decision they have to make, are we competing against a room that most of the Strip offers or are we going after the big boys at the top of the market? My guess is 90% likely they decide they are mass market and just put some good money into redoing the property without a significant new build budget.

[Willy702]

Originally Posted by BBMW

If we're talking about offering room product, you're correct. But lots of casinos, especially in Vegas, have gone way out of their way to create artificial landmarks that don't directly add to revenue in any appreciable way (two Grand Canals, anyone?).

That worked out great for LVS, they sold the mall for a huge profit and benefitted from the traffic it still generates.

[robr2]

Originally Posted by BBMW

If we're talking about offering room product, you're correct. But lots of casinos, especially in Vegas, have gone way out of their way to create artificial landmarks that don't directly add to revenue in any appreciable way (two Grand Canals, anyone?).

And there are a mymarid of tax laws and corporate cross ownership that blurs the profitability/loss and tax situation of all involved.

[BBMW]

That's the inside one. What about the outside one?

But that's exactly my point. They added an iconic themed piece of architecture with drove traffic to the property. The canal itself didn't make so much money (they get a little revenue from the gondola rides.) and was a major PITA to build (gigantic pool hanging like a sword of Damocles over the casino floor.) But it ended up well for them.

Whether or not HR really needs more rooms, the will be able get them rented. And people will come to stay in the guitar. I'm seeing commercials for their guitar hotel in FL on TV in NYC. This is DEFINITELY a branding thing for them.

They need to change the name of the tribe to Hard Rock Indians.

Originally Posted by Willy702

That worked out great for LVS, they sold the mall for a huge profit and benefitted from the traffic it still generates.

[Willy702]

Originally Posted by BBMW

That's the inside one. What about the outside one?

But that's exactly my point. They added an iconic themed piece of architecture with drove traffic to the property. The canal itself didn't make so much money (they get a little revenue from the gondola rides.) and was a major PITA to build (gigantic pool hanging like a sword of Damocles over the casino floor.) But it ended up well for them.

Whether or not HR really needs more rooms, the will be able get them rented. And people will come to stay in the guitar. I'm seeing commercials for their guitar hotel in FL on TV in NYC. This is DEFINITELY a branding thing for them.

They need to change the name of the tribe to Hard Rock Indians.

Hah, that's not happening.

Look I have done work with Hard Rock Intl and many others in this industry, I know exactly how they think about these things and make future decisions about something as significant as billion dollar investments. The playbook is to announce a lot of sizzle and then slowly pull back on that once people have stopped paying attention. Its just like politics, you promise the world but then once you get voted in reality sets in and you pursue different sustainable or achievable paths. Casinos around the world do this, telling the community and politicians they will invest $xxx millions of dollars with a casino license. And when its all done, who is there to confirm they really did that? If you look at a building could you really say if it cost $200 million or $400 million? These are the games casinos play.

I have little doubt they will put their stamp on the Mirage and that COULD include a guitar hotel, but what they built in Hollywood is really over the top and to be honest I doubt they will get much of a return on it. That casino was incredibly successful before it, advertising a showcase guitar hotel probably didn't change the visitation patterns of the customers they care most about. It was corporate/tribal ego. They will come into Las Vegas with the same ego, but in the end they have a duty to not take tribal money and set it on fire.

[Willy702]

Originally Posted by robr2

And there are a mymarid of tax laws and corporate cross ownership that blurs the profitability/loss and tax situation of all involved.

Here's the simplified version of what happened.

The Venetian Las Vegas, completed in 1999 for $1.5 billion, sold the Grand Canal Shoppes for $1.4 billion to General Growth Properties (NYSE:GGP) in 2004, providing the model for how to use a mall to fund a resort and casino.