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Vegas Hotel Construction Is Booming

July 23, 1989|RUTH RYON | Times Staff Writer

LAS VEGAS — Southern California's favorite gambling town is on a roll.

Spurred by strong increases in tourism and convention business, Las Vegas hotel construction is booming as never before.

Between now and 1992, more than 20,000 hotel rooms will be added to the 61,000 existing rooms, hotel owners and industry analysts say, and about 7,000 of those will be in two hotels.

One is the $630-million Mirage, being built by Golden Nugget Inc., which will have 3,100 rooms when it opens Dec. 1.

The other is the $290-million Excalibur, a project of Circus Circus Enterprises. It will have 4,032 rooms, the most of any hotel in the country when it opens in June.

"Las Vegas is experiencing the greatest growth phase of its history," said Saul F. Leonard, a gaming industries expert with Laventhol & Horwath, Los Angeles.

"The Mirage and Excalibur will be the first new major projects in the city in 15 years, and with their unusual features, they will be must-sees."

The president of The Mirage, Bobby Baldwin, said most of his hotel's features were "a secret of sorts," but earlier reports indicate that it will have a $9-million lagoon, a 49-foot waterfall and a 100-foot-high, sky-lit atrium filled with 70-foot-high banyan trees, coconut palms and tropical orchids.

Excalibur will feature a medieval theme, with a moving walkway that will carry visitors over a moat and through castle gates to a casino, an amphitheater, shops and restaurants.

Both the Mirage and Excalibur are being built on "The Strip." But Fletch Brunelle, research coordinator for the Las Vegas Convention and Visitors Authority, said that there are hotel construction projects under way all over the city.

He estimated that about 11,500 hotel rooms are being built, and 38,000 more are proposed, some of which will be completed after the 20,000 planned to be available by 1992.

Many of the new rooms are being added to existing hotels, which are also expanding their casinos and convention halls, Leonard added.

The construction boom was created, experts say, by an aggressive marketing strategy used in the past few years by the state, the city's Convention Authority and the major hotels to capture conventions, trade shows and group tours.

Strategy Is Working

The strategy is apparently working.

"Las Vegas is the third largest convention city in the United States and probably will be No. 2 within the next two years," Leonard said. (Experts agree that New York is No. 1, but they're split, between Chicago and Atlanta as to which city is No. 2.)

"Nevada, especially Las Vegas, is already one of the top destinations for group tours coming from Asia," said Rich Moreno, state director of tourism.

Since an office to stimulate Japanese travel to Nevada was established in Tokyo three years ago, the number of Japanese tourists visiting the state jumped from 165,000 to 300,000, he added. And he expects the number of all Asian visitors to grow after a Taipei office is opened in a few months.

Tours from Europe

The Las Vegas Convention and Visitors Authority hopes to make the city a top destination for tours from Europe as well. "It's in our budget to help fund an office in London or Frankfurt," said Frank Sain, the bureau's executive director.

The bureau's advertising budget for the next fiscal year is about $10 million, and that will be spent on ads in newspapers, magazines, billboards, and TV and radio.

"Southern California is our primary market," Sain said, estimating that Californians represent up to 42% of all Las Vegas visitors, which jumped from 11.7 million to 17.2 million in the past 10 years.

About two-thirds of the California visitors come from Southern California, said Maurice Robinson, a senior manager with KPMG Peat Marwick, Los Angeles.

The proximity of Southern California to Las Vegas undoubtedly contributes to the fact that the growth in Nevada, in terms of casino revenues and visitors, is "overwhelmingly in Clark County," said Andy Grose, executive director of the state's Economic Development Commission. "(It) is not a statewide phenomenon."

Laughlin a Boom Town

"If you really want to see a boom town, though, you should go to Laughlin," Leonard said.

Laughlin, also in Clark County but a little closer than Las Vegas to Los Angeles, had 430 hotel rooms in 1981 but slightly more than 4,000 at the end of 1988, he noted, and it is expected to have about 13,000 at the end of 1991.

Laughlin drew some business from downtown Las Vegas, he said, but owners of the downtown Las Vegas hotels and casinos have changed their marketing strategy to capture richer customers.

They switched, said Jim Needham of Arthur Young in Seattle, from courting "blue-collar workers and moms and pops carrying around milkshake containers of nickels to younger people looking for a one-stop place for a show, gambling and resort."

Seeking Conventions

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