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October 07, 2021

No new Vegas hotels for "at least" 10 years: report

All over Europe, there sits a host of gorgeous, breathtaking cathedrals and churches. Problem is, they’re so old their image is always tainted now by scaffolding and cranes that swallow up the structures.

Take Barcelona’s Sagrada Familia, for example. Construction is so constant on the temple they couldn’t get rid of the cranes even for its promotional shots. The place is always under assembly.

In North America, though, there’s only one real locale where construction is as inescapable: Las Vegas.

Hotels in the desert hotspot have been going up and down like Hugh Hefner between Viagra doses for years. But will it continue?

Not according to the Wall Street Journal, which detailed a major shift in philosophy yesterday that casino moguls plan on adopting in the face of recession.

Many Vegas executives tell the paper they've abandoned current development plans and don’t expect the city to see another blockbuster hotel break ground for “at least 10 years.”

“The old model has been thrown out the window,” MGM Mirage boss Jim Murren said.

Indeed, while construction projects have been stalled all over the world, the downturn has been particularly cruel to Vegas, which is fresh off a six-year building frenzy that saw garish edifices like Encore and the Wynn pop up on the strip.

While pumping billions – 30 of them, the WSJ reports – into new casinos this decade, developers found themselves with a mountain of debt when the economy imploded and investors pulled out their construction cash.

To make matters worse, gambling revenues – once the filet mignon of recession-proof enterprises – tumbled unexpectedly and are down (13% through July based on a year earlier).

So what’s a Terry Benedict to do? According to the WSJ, change the culture of the entire town.

Vegas execs will try to distance the city from the reckless glitz that had a hand in its downfall, eschewing gaudy spending to increase profit margins through “branding, marketing and customer loyalty.”

“The industry is seeking a new equilibrium,” said Gary Loveman, Harrah’s Entertainment Inc. chief executive. “The last period was one where people were drunk on the use of capital and used it to solve every problem. Clearly that can’t continue.”

But, does it need to? People visit Vegas for anything but reality, and that encompasses bejewelled chandeliers and stadium-sized fountain exhibits and every bit of extravagance we’ve come to expect from the desert oasis.

Visitation is already down 6% this year compared to last, and with people watching their wallets now more than ever, the city is going to need to find a way to funnel in cash-wielding tourists in record droves.

In the past, Vegas has relied on the flash of a new hotel opening to churn the hype machine and intrigue people to come and hit the slots.

Now, with that safety valve apparently sidelined, will the strip be able to cope?

By Jason Buckland, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

James HaversJames Havers

James is the senior editor of MSN Money living in Toronto. He has worked for the Nikkei Shimbun (Tokyo),,, Canadian Business and other publications. Havers turned to journalism after teaching overseas.

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...