Thursday, Sept. 25, 2003 | 10:52 a.m.
When Mandalay Resort Group's new all-suite hotel tower opens next to Mandalay Bay before the end of the year, it will look a lot more like New York than Las Vegas.
With an average room size of 750 square feet -- the highest on the Strip -- "THE hotel at Mandalay Bay" will command higher room rates than Mandalay Bay and most other top-tier properties in town.
It will have a minimalist, contemporary look -- black, white and gray with some splashes of color -- that is largely absent from the city's kaleidoscopic megaresorts.
Though attached to the back end of the Mandalay Bay casino, it will also be marketed as a separate property from the resort, with its own advertising and marketing budget.
"This is not the fourth tower at Mandalay Bay," Chief Financial Officer Glenn Schaeffer said.
The hotel tower will feature two restaurants, a spa and a coffee bar and lounge in the lobby to entertain guests. A separate check-in and VIP area in the lobby means guests never have to venture into Mandalay Bay during their stay -- though that's unlikely, executives say.
"If that's all they do it's a profitable project for us," Schaeffer said.
The hotel will be marketed to convention-goers who desire larger, more upscale digs, he said.
"We realized there was a product offering we were lacking here that was an all-suite product," added Mandalay Resort Group marketing chief John Marz. "There's substantial demand for that on the convention side of the business."
The rooms will fetch more than $220 on average per night compared to the roughly $180 a night for a Mandalay Bay room, Schaeffer said.
That compares to rates of $250 to $260 per night at the Four Seasons Hotel, which typically commands the highest rates on the Strip. Like the hotel tower, the Four Seasons is an integrated hotel property attached to Mandalay Bay.
Rooms will contain a master bedroom and bathroom and a separate, "work-friendly" sitting area with a plasma screen television, workstation, wet bar and half bath.
"What we're finding is that the visitor to the Las Vegas Strip wants even more sophisticated luxury in the resort product," Schaeffer said. "The most expensive rooms (at Mandalay Resort Group properties) sell the first."
Marketing the tower as a separate property isn't just a marketing gimmick, analysts say.
"There's clearly a different strategy and customer they're seeking out with the new hotel," Deutsche Bank Securities analyst Marc Falcone said. "Having a separate advertising and marketing budget makes sense."
Suites are in demand in Las Vegas, he said. The hip design, which appeals to a younger audience, doesn't hurt either, he said.
"It's a new experience at the same general property," said Joe Greff, an analyst with Fulcrum Global Partners. "If you're going to gamble you have to go to (Mandalay Bay) to gamble."
Barring a "shock to the economy" such as terrorist or military action, the tower is expected to boost earnings for the company, he added.
The Venetian recently opened another hotel tower with its own amenities and lobby check-in. But that tower, called "Venezia," is viewed as an offshoot of The Venetian rather than a stand-alone property, analysts said. Bellagio, which is building a second hotel tower to open before the end of next year, also expects to continue the resort's upscale Italian feel into the new tower. That tower will be considered part of the Bellagio, representatives said.