Rumor has it that several Las Vegas hotels are on the chopping block amid revenue decline.
Travel is down globally and Las Vegas has seen a staggering decline in visitors and gambling revenue. Reduced guest capacity, zero conventions and a more than 50% decline in gaming profits has some operators rethinking opening casino hotels.
MGM previously announced that they would be demolishing the Luxor Casino sometime this year, but sources have told me that MGM will now wait until the pandemic is resolved to demolish it, since there is just no interest at this point for a new strip casino. In addition, MGM is hoping to sell it to another casino company, as MGM looks to divest itself of Vegas holdings. While the Luxor has reopened with extremely cheap hotel rates since closing in March, the casino as a viable going concern just isn’t realistic given its age, dilapidated conditions and using a theme that few seem to care about these days.
The Luxor isn’t the only casino that is set to be demolished or sold
I spoke to a Las Vegas real estate agent with strong connections to the gambling industry who said that at least 6 casino hotels are being considered for sale or possible demolition for a different use. This includes four Station casinos and two Caesars casinos. The agent said that he has heard talk that Park MGM may also not reopen, although he feels this isn’t true and MGM is just waiting for tourism to increase before they reopen the hotel. The Park was set to be a host hotel for the NHL playoffs when Vegas was favored to be a host city, but after the league chose two Canadian cities for its bubbles, MGM chose to keep the Park closed. Instead MGM reopened its newer and more popular hotels which allowed for more distancing and had better ventilation such as The Bellagio, MGM signature and City Centre. The Mirage remained closed until last week after MGM was able to make some major renovations.
The real estate agent added that he has it on “good authority” that Caesars is looking seriously at the viability of The Linq hotel (formerly Imperial Palace) and The Cromwell (formerly known as The Barbary Coast and Bill’s Gambling Hall and Saloon).
Caesars spent over $200 million upgrading the Imperial Palace between 2012 and 2014, including improving hotel rooms, upgrading the casino floor and putting in a promenade and shopping center with the world’s largest Ferris wheel. But for all the expenditure many visitors claim it still has an old feel compared to the more recent hotels and room vacancy rates were still quite high compared to similar hotels, in spite of the cheaper rental rates. Consequently, Caesars has chosen to reopen the casino and promenade, but has not reopened the hotel, although they are accepting reservations should the hotel reopen any time soon.
The Cromwell was obtained by Caesars in 2007 from Boyd Gaming in exchange for the land The Westward Ho was located on to allow for the Echelon project, and in 2014 Caesars revamped the hotel spending almost $200 million to upgrade the hotel rooms and amenities, including putting in some of the strip’s most innovative pools and nightclubs. The hope was that the boutique hotel would appeal to millennials who wanted something more than just gambling options when going to Vegas. The hotel has not reopened since March apparently because being such a small hotel social distancing is difficult and right now Vegas has not authorized the opening of bars and nightclubs. Both casinos are located on prime strip property, but the real estate agent said that Caesars is seriously deciding if they still want the Linq or if they want to unload it on another casino owner like Las Vegas Sands, possibly to upgrade as a 3rd hotel for Sheldon Adelson, given its proximity to the Venetian and Palazzo. The agent said that Caesars likely will not do anything with The Cromwell at this point, but if COVID remains a concern for years to come, they may have to reconsider their options given the company’s financial woes. While the Rio and Planet Hollywood haven’t reopened either, the agent is certain Caesars has no plans to demolish or sell them.
That brings us to the three Las Vegas Station Casinos, including The Palms casino just off the strip, which Station bought in 2016, as well as the Fiesta Rancho and Texas Station located in North Las Vegas. It has been well reported that the three casinos, along with Fiesta Henderson located in Henderson, will not reopen before the summer of 2021 at the earliest, but the agent said he is confident they will never reopen.
Station has said that they are not looking to sell or demolish the casinos, but the agent said it isn’t true. He claims to have it on good authority that Station is eagerly shopping the Palms and won’t turn down any reasonable offer, since the casino has underperformed since it was purchased. He added that the company is just not prepared to pour any more money for needed upgrades, as they believe it will never appeal to younger generations, even after COVID is no longer a concern. And as for Texas Station and the Fiesta Rancho the agent said “they are gone.” He claims that the smallish hotels attract very few people and he is convinced they will either be demolished for retail stores or condominiums or possibly sold to the city to use as hostels or housing for college students. “Those casinos were on shaky ground before March and Covid was the straw that broke the camel’s back.”
While the agent said those were the casinos he was currently aware of, he said he wouldn’t be surprised to see more casinos sold or repurposed once the pandemic is over.
“I hate to say it,” the agent sadly said , “but Vegas as we knew it is probably gone for good.”1 comment