Wynn hoping to make megaresort feel smaller

By Jeff Simpson

Tuesday, Feb. 15, 2005 | 10:45 a.m.

Steve Wynn's almost ready to show off his $2.7 billion Wynn Las Vegas, and the developer thinks it's the little things that will distinguish his property from the competition.

Shorter walks, intimate public spaces, and tucked-away surprises will please Wynn Las Vegas guests, the developer said in a two-and-a-half-hour Monday afternoon interview with the Las Vegas Sun.

"Don't look for grandstand maneuvers -- the only way to compete isn't to create a big move but to refine the small ones," he said. "Joints keep getting bigger, but this place has nooks and crannies and hideaways. We have beautiful gardens and vistas."

A primary goal of the property's design was to minimize walking distances, which can be substantial in many of the biggest resorts. A related challenge was to make the property's space -- 5.6 million square-feet -- seem more intimate.

"Can we keep it cozy?" Wynn asked. "Can we keep the choices and shrink the space? We're about the same size as Bellagio, and have the same stuff as Bellagio. But I wanted the place to feel smaller, more crowded."

Efficient placement of elevators, the graceful arc of the hotel tower and a willingness to break with casino-business convention aided the design effort, he said.

Design elements

Wynn noted that Wynn Las Vegas' restaurant doors won't open to the casino floor, but will instead have entry environments isolated from the din of the slots and table-game pits.

"People know how to find the casino," he said. "They don't want to walk out the restaurant door and bump into a slot machine."

The developer said he's spending much of his time during the last weeks before opening checking the discreet elements he's counting on to wow his guests.

"My job is to make perfect the environment for our guests," he said, describing his work tinkering with software packages the resort will use to control lighting, the movement of water and special effects.

One surprising fact Wynn disclosed is the 50-story hotel tower's odd floor-numbering system.

To avoid troubling Chinese gamblers who believe numbers in the 40s are unlucky, the hotel's floor numbers will skip those numbers, with the 39th floor immediately below the 50th.

The property is on pace to open April 28, with Wynn Las Vegas executives slated to take over the property from its builder at the end of March.

Work is now being finished on the hotel's top two floors, and the rooms in the bottom 48 floors are completed.

How's it look? Wynn won't say.

"I've lost my objectivity. I'm too close."

But the feedback he craves -- and gets -- suggests that the hotel will blow his guests away. Eight Wall Street analysts recently toured the property, and their unanimous praise for the look of the property prompted some to raise the company's targeted share price and others to rate the stock a "buy."

"I'll tell you when I'll get happy," Wynn said. "I'm filled with anxiety now, but two weeks before opening, when everything fancy is finally exposed and all the new employees are looking with their eyes wide at design decisions we made four years ago. That's when I'll be happy. For the first time you see the baby without the bandages."

Marketing

After airing the new television commercial featuring Wynn on the roof of the property in Nevada on Super Bowl Sunday, the spots aired outside the state for the first time Sunday evening on local television news programs in Phoenix, San Diego and Los Angeles.

Beginning Wednesday, the same markets will see the ads during "The Apprentice," "West Wing" and "Desperate Housewives," Wynn said.

"We picked the best shows and spent a lot of money."

Wynn marketers are testing the spot's effectiveness, monitoring Web site and call-center response from the markets the ads run in to help them decide whether to keep or change the commercial or air it on different shows.

"In the old days we made the commercial and ran it in 150 markets. It cost a couple of million, and we weren't scientific in measuring its effectiveness. So much has changed, with TiVo and digital cable. People don't like to watch commercials."

Wynn said he plans to advertise on the two highest-profile events between now and the property's opening: the Academy Awards and the Monday-night championship game of the men's college basketball Final Four.

He doesn't plan to allow photographs from inside the new property for at least two months, honoring an agreement to allow Vanity Fair to run the first shots of the hotel.

Las Vegas

Wynn couldn't help but smile when discussing how different the Las Vegas hotel business is from its condition when he struggled to raise cash to build his resort in the aftermath of the Sept. 11, 2001, terrorist attacks.

Many analysts, and even some investors who'd made millions investing in Golden Nugget/Mirage Resorts thought they'd be able to buy Wynn's stock for a lot less than the $13 it sold for in its initial public offering.

The stock now sells for more than $70 per share.

And Wynn thinks the city's boom can be sustained, at least for the largst properties, such as his.

"You have to look at the hotels individually," Wynn said. "Can Bellagio make more money, year-over-year? You have to believe the answer is yes. Bellagio is solidly one of the best hotels in the world. I think it's possible for a fine hotel like Bellagio to improve its performance. Can Mirage? Yes. Treasure Island? Yes. Mandalay Bay, Venetian and MGM Grand? Yes.

"But maybe not Excalibur. Tropicana probably should be sold. The Sahara? I don't know. Riviera? I don't know. But if the little places make a little less, it's more than offset when the big ones make a little more."

Wynn explained that a 5 percent jump from $300 million in income at a top hotel is a $15 million boost, an amount that dwarfs the $2 million decline resulting from a 5 percent drop at a small $40 million property.

"The market looks good because of the power of the city's expensive units."

Food and beverage

Wynn said his property's restaurants won't capitalize on absentee celebrity chefs. Instead, he's lured chefs willing to make Wynn Las Vegas their home.

"When these chefs spread their wings to fly to a new city they think they can maintain their quality," Wynn said. "That's not necessarily true. Wolfgang Puck has been able to do it. Wolfgang's managed to keep his reputation in both Los Angeles and Las Vegas. Nobu Matsuhisa has been able to do it. Emeril (Lagasse) has been able to do it. But they have to work like hell. We're going to try something different. We're going to bring 'em here, pay 'em a helluva lot of money."

Strip consolidation

Wynn said the pending purchases of Mandalay Resort Group by MGM Mirage and Caesars Entertainment by Harrah's Entertainment haven't slowed growth on the Strip.

"MGM, Caesars, Mandalay, even Harrah's were developing every bit of land they had. No land is being left untouched. These companies were building like wild where they could. MGM Mirage must have spent a half-a-billion on MGM Grand. Bobby (Baldwin, Mirage Resorts chief executive and Bellagio president, Wynn's No. 2 when he ran Mirage Resorts) built a new tower at Bellagio. Mirage and Treasure Island have no more land to build. Caesars was already building like wild at Caesars Palace and Mandalay has been forward moving all along, with (Vice Chairman) Bill Richardson and (Chairman) Mike Ensign building as fast as anyone."

Wynn does not plan to object to the acquisitions when they are considered by Nevada gaming regulators.

Overseas markets

Wynn and chief architect DeRuyter Butler have been busy working on Encore, the Wynn Las Vegas all-suite expansion, on which construction is expected to begin soon, and on a planned expansion of Wynn Macau.

The company is finishing work on its proposal to build a casino in Singapore, and Wynn expects the nation's government to decide to proceed with plans for casino gambling.

"We're going to submit (our proposal) by the 28th (of February)."

Deutsche Bank Securities stock analyst Marc Falcone said Wynn could spend from $1 billion to $1.5 billion to develop a casino resort in Singapore.

In a research report today, Falcone said Wynn "has established his proficiency developing new casino resorts" and by securing one of only three licenses in the lucrative market of Macau, "does not need to rely on a local company to support its design plans for a Singapore casino."

"Based on Wynn's track record and outstanding design capabilities, we believe the company is a leading contender for a Singapore project," Falcone said.

Wynn would be competing with MGM Mirage, Harrah's Entertainment Inc. and Las Vegas Sands Corp. to build a casino in Singapore. MGM Mirage recently announced a partnership with Singapore developer CapitaLand.

Las Vegas-based analyst Jonathan Galaviz, founder of the Singapore Association of Nevada, declined to comment directly on Wynn's plans but said local partners can provide "strategic value" to foreign investors in Singapore and a "more robust proposal" than going solo.

Wynn said he wasn't surprised U.S. casino operators appear to be losing interest in the near-term potential of the United Kingdom's casino market.

He's long been cautious on the country's prospects.

"U.S. style casinos were too much of a switch. It was schizophrenic."

Venetian dispute

Wynn was unapologetic about his aggressive effort to make sure the Venetian builds enough parking spaces before it begins above-ground work on a new resort.

The Venetian's 4,400 parking spots aren't nearly enough, and way below what the property had committed to build, he said. The shortage will prompt Venetian customers, particularly Sands Expo attendees, to park at neighboring properties such as Wynn's, he said.

Venetian owner Sheldon Adelson's stubbornness is the reason for the battle, which has played out in a number of County Commission meetings, Wynn said.

"We have a serious disagreement. I have become his enemy.

"He has to have 11,000 spots and he only has 4,400. I cannot allow him to do this. He must provide parking for his guests and employees."

Car sales

Along with the Ferrari/Maserati dealership Roger Penske is building at the property, there will be a 60-vehicle used car showroom.