Las Vegas Sun

July 20, 2019

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Public eyes new $1 billion resort; Wall Street watches for the numbers

LAS VEGAS - The public got its first look at the $1 billion Mandalay Bay hotel-casino Tuesday while Wall Street waited to see the numbers before judging the latest in a string of megaresorts in this gambling capital.

Some 4,000 VIPs roamed through the flashy resort early in the evening, with Gov. Kenny Guinn calling it a "beautiful facility."

"It adds one more very classy entertainment center on the Strip," Guinn said.

The day's festivities began with The Blues Brothers - actors Jim Belushi, Dan Aykroyd and John Goodman - leading a procession of some 200 motorcyclists up to the front of the South Seas-themed resort prior to an engagement at the House of Blues inside the hotel.

More than two dozen celebrities attending the opening, including Drew Barrymore, Quincy Jones, Chuck Norris, David Cassidy, Fran Drescher, John Landis, George Lucas, Penny Marshall and Quentin Tarantino.

Jack Leone, vice president of marketing for the resort, said the turnout exceeded expectations.

"We're looking forward to bringing something new and unique and unusual to Las Vegas," Leone said.

The 3,700-room hotel opened to the general public late Tuesday night.

Mandalay Bay is the first of four new resorts scheduled to open here in 1999, generating a feast of new attractions for visitors and concerns of overbuilding for the industry.

Guinn said he was not concerned about overbuilding in Las Vegas although he expected resort owners to be "a little more cautious" until it is determined how the public accepts the surge of new rooms. But he said he had heard the concerns about overbuilding before and they proved to be unfounded.

"I remember when they said the MGM Grand (built in 1993) would be the last megaresort we'll see," the governor said.

The new resort features a host of attractions, including an 11-acre lake and beach with a machine that generates 6-foot waves, the popular House of Blues, a Four Seasons hotel within the hotel, and a South Seas environment.

Wall Street analysts will be waiting to see if Mandalay Bay generates new traffic as other new hotels have in the past, or just cannibalizes existing properties.

Glenn Schaeffer, president of Mandalay Bay's parent Circus Circus Enterprises Inc., was asked the question during a media preview Monday.

"The early going has been quite positive," Schaeffer said, when asked about Mandalay Bay's impact on the company's neighboring Luxor hotel-casino. "Luxor's (reservation) calls are ahead of last year."

Mandalay Bay's average room rate will run about $110 a night, compared to the pyramid-shaped Luxor's average of $85-$90.

The string of new properties started with the opening of the $1.6 billion Bellagio in October.

Jason Ader, gambling analyst for Bear, Stearns & Co., Inc. noted in a recent industry survey that Las Vegas posted a 4.9 percent increase in visitors in October, 1.7 percent in November and 6.7 percent in December, the largest monthly increase three years. The 1998 visitor count was 30.6 million.

The number of airline passengers arriving and departing Las Vegas increased 5.6 percent in December, 9.1 percent in January.

Gambling company stocks have taken a beating the past two years, with concerns about overbuilding in Las Vegas, the spread of gambling nationwide and the possible spread of casino gambling in California with voter approval of Proposition 5.

That trend is beginning to change, with the Chicago Board Options Exchange index of 11 gaming stocks up 14 percent the past month. Bellagio's parent Mirage Resorts Inc. was up 32 percent, MGM Grand Inc. up 22 percent and Harrah's Entertainment Inc. up 12 percent.

Casino companies are hoping the new resorts, combined with a myriad of new attractions developed here in recent years, will be enough to keep pushing the tourism numbers upward.

Mandalay Bay offers a South Seas theme, complete with an 11-acre lake and a beach where surfing competition is planned.

The 1,700-seat Mandalay Bay Theatre features the Tony-award-winning musical "Chicago," which opened to a VIP audience Tuesday night and opens to the general public on Wednesday.

Affiliated with the resort, the upscale Four Seasons has a separate two-story structure that includes its own lobby, restaurants, pool and health club, plus three private elevators that whisk guests to the hotel's 424 guest rooms on the 35th through 39th floors of Mandalay Bay.