After slow summer start, Summerlin resort says momentum is building

Brian McMullan was feeling down in the dumps until a customer brightened his day.

It had been a tough summer for the Resort at Summerlin president. Cost overruns, a grueling work schedule, a late and piecemeal opening and lower-than-expected customer counts had taken their toll on the normally upbeat McMullan.

But recently, he was walking through the parking lot after another 16-hour day when a local woman approached him.

"I just want to thank you for building this," she said, gesturing at the $300 million hotel-casino at the corner of Rampart Boulevard and Summerlin Parkway. "It's a beautiful addition to our neighborhood."

"That meant a lot to me," McMullan recalled recently. "When we first said what we wanted to do on this site, there were skeptics and some opposition.

"What pleases me is that we said we'd build a resort the community could be proud of, and we did that."

While acknowledging the upscale golf-and-gambling resort faces an uphill struggle, McMullan remains confident its underlying strategy is still sound. And he's quick to scotch a persistent rumor making the rounds on Wall Street -- that parent companies Swiss Casinos of American Inc. and Swiss Casino Holdings AG are seeking a buyer for the property.

"It's simply not for sale," he said. "Despite the fact we haven't opened everything yet, we believe this will be a world-class resort."

"Everything" in the resort complex -- separate 255- and 286-room hotels, eight restaurants, an upscale shopping mall and a spa -- was to have been open by late April.

But construction delays, weather problems and a dispute with its general contractor led to the resort's "soft" opening on July 15 with just one hotel tower and two restaurants available.

"Having one hotel still not open is a big problem," McMullan said. "It's one of my tools."

Fine-dining establishments are additional tools for Las Vegas hotel-casinos, and the Resort at Summerlin was hampered by delays in completion of its restaurants.

"We were counting on a significant amount of business from nearby residents," McMullan said, referring to the affluent Summerlin community. "But when you're a local, you don't come to a property just to gamble. You come to eat and gamble or be entertained and gamble.

"We started with just a buffet and Ceres" -- a fine-dining health-food restaurant -- "and they don't appeal to everyone."

For several weeks after opening, the resort drew few customers, especially midweek. Business began to improve after four more restaurants opened eight weeks later, and increased even more with two more restaurants debuting in the past week. The second hotel tower and an Aquae Sulis spa are expected to open this month, completing construction.

"We couldn't fully market the place because we didn't have anything to market," McMullan said. "That's changing now. We're full on weekends and midweeks are getting along toward being full.

"It was quite difficult without doing any advertising, but we will have a high average daily room rate this month."

McMullan said group bookings, which will make up 30 percent of total room sales, are doing well.

"We've nearly reached our total allocation of group bookings for the next six months at a very good average daily rate," he said. "This is a place that's very well suited to groups of up to 200 persons who want to do some work in the morning, play some golf in the afternoon and eat well and maybe gamble at night, and be treated well while they're doing that."

Personal service is a hallmark of the resort, whose rooms are managed under a contract with Regent International, the Carlson companies Inc. unit that boasts some of the world's most famous luxury hotels.

The Resort at Summerlin hasn't aggressively marketed to Carlson's or Regent's customer bases yet because the facility is still a work in progress, McMullan said.

That is changing now, and he's confident increased marketing will boost customer counts from outside Las Vegas, enabling the resort to hit its projected financial results by spring.

That won't be any too soon, as the Resort at Summerlin will be facing a tough competitor several months later when Coast Resorts opens its Suncoast hotel-casino a quarter mile to the south.

That $175 million, Mediterranean-themed resort will have 216 rooms, a 78,000-square-foot casino, five restaurants, a 64-lane bowling alley, a 600-seat showroom and a 16-screen movie complex, all designed to attract repeat business from Summerlin-area residents seeking affordable dining and entertainment to go along with their gambling.

"We knew the competition would be fierce, particularly in the locals market," McMullan said. "Coast is brilliant in serving locals, and we don't underestimate what they can do in that respect.

"But we'll try to compete in three ways -- with service, service and service -- hoping to breed loyalty. And we will have slot machines that have as low a hold percentage as anyone in this market."

McMullan and executives from the Swiss Casinos parent companies opted to build in the Summerlin area because it could offer upscale clientele a sense of peace and tranquility amid a bevy of golf courses. Yet it's close enough to the Strip to make an evening's excursion there a matter of a short limousine ride.

The locale and affluent surroundings, they believed, would enable the resort to command room prices above $200 a night. While not quite there yet, McMullan said he is still confident in those projections.

"I don't think I'm blindly believing this, but I do see things improving," he said.

archive