Travel Agent - September 10, 2007 - (Page 34)

Destinations Las Vegas: The New Frontier Private equity and foreign investment reshape and reinvigorate Las Vegas Las Vegas L ady Luck is cozying up to a new line of investors that are betting on Las Vegas to show them the money. In late August, Dubai World, the state-owned investment firm of the Persian Gulf emirate—with diversified holdings such as the Queen Elizabeth 2 and Barneys New York department store—announced a $5 billion investment in MGM Mirage (www.mgmmirage.com), Dubai World is quickly becoming known in North America, snatching up prime real estate and investing heavily in American companies. It announced plans this year to make at least $13.5 billion worth of acquisitions. Meanwhile, another foreign firm with buckets of money to spend, Israeli-based Elad Group, said there would be no slowdown to The Plaza Hotel Las Vegas, which it is funding along with IDB Development Corp., also based in Israel. Elad Group owns the famed Plaza Hotel (www.theplazaresidences.com) in New York and is looking to bring that cachet to Las Vegas. The $5 billion project, which will comprise five towers, 3,500 up and down The Strip? “There is a lot of speculation and activity taking place in Las Vegas,” says Brian Gordon, a principal with Applied Analysis, a Nevada-based economic and real estate research firm. He cites Las Vegas’ healthy fundamentals such as its high average daily rates and occupancy rates that creep well into the 90 percent range as factors. “This is all attractive for international firms and the market will continue to expand as the dollars remain available. Vegas has historically expanded at a reasonable clip, but now it’s being pushed harder.” (About 40,000 rooms are on the books to come online within the next five to seven years.) Private Equity Groups Not only is foreign investment getting in the act, but so are private equity groups here at home. Harrah’s Entertainment (www.harrahs.com), the world’s biggest casino operator, agreed in December to be acquired by Apollo Management and Texas Pacific Group for $17.1 billion; the companies are planning to take Harrah’s private. Apollo also recently purchased a half stake of Norwegian Cruise Line (www. ncl.com) and is the majority owner of Oceania Cruises (www.oceaniacruises.com). “The exposure of Las Vegas,” says Vince Alberta, vice president of public affairs for the Las Vegas Convention and Visitors Authority, “continues to attract investors who see the vision of many great businessmen and the ability of the destination to continually reinvent itself.” Then there’s the case of Station Casinos (www.stationcasinos.com), another Las Vegas-based gaming company, which just this past month approved a $5.4 billion takeover bid from private equity investor group Fertitta Colony Partners LLC, which is led by Station Casino’s chairman and CEO, Frank Fertitta III. “Liquidity has become an issue,” says Gordon. “Private equity provides an alternative.” — David Eisen Multi-million dollar investments are changing the Las Vegas hotel and casino scene which includes a 9.5 percent stake in the company along with half ownership of the 76-acre CityCenter development. Kirk Kerkorian, who controls MGM, said the investment comes as the company shifts its focuses on developing hotels, housing and entertainment complexes and shies away from gaming. rooms, a casino and condo, is slated to open by 2011 and serve the luxury market. It will begin construction late next year after the New Frontier hotel/casino, which currently stands on the lot, is demolished. So, what is there to make of these international investors floating money 34 TravelAgent September 10, 2007 http://www.theplazaresidences.com http://www.mgmmirage.com http://www.harrahs.com http://www.ncl.com http://www.ncl.com http://www.oceaniacruises.com http://www.stationcasinos.com

Table of Contents Feed for the Digital Edition of Travel Agent - September 10, 2007

Contents Editor's Letter News You Can Use Agenda: Fam Trips, Calendar of Events, Deal of the Week South America Rising: COVER STORY EUROPE: Undiscovered Croatia PACIFIC/ASIA: Chiang Mai: Hotspot of Northern Thailand LAS VEGAS: Las Vegas’ Inside Man Las Vegas News & Notes Las Vegas: The New Frontier PACIFIC NORTHWEST: A Gem on Oregon’s Central Coast FLORIDA: Hyatt Regency Miami Spruces Up Ensemble Update Agent Outlook: Cruising Today Nantucket Island Resorts Classified Marketplace Home-Based Travel Expo Update Advertisers’ Information People & Places Thailand Planner

Travel Agent - September 10, 2007

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