M Resort chief reflects on first six months

By Amanda Finnegan

Tuesday, Aug. 18, 2009 | 10:24 a.m.

The Las Vegas Valley’s newest casino owner, Anthony Marnell III, said business has been better than expected since opening M Resort nearly six months ago. But he’s noticed a summer slowdown.

“We started off the first 90 days with a roar and then June 1 hit. The market just shut off,” Marnell told Sun columnist Jon Ralston on Monday on his “Face to Face With Jon Ralston” program. “We had to regroup and do a lot of things gaming operators are doing today to stay alive for the greater good of the property and the employees. July got better. My outlook for August was glum but August has been better than expected.”

Marnell discussed the future of his resort, the Las Vegas gaming industry and the city’s slump in convention and meeting business during the television interview.

Marnell opened his $1 billion resort March 1 amid one of the toughest times the gaming industry has seen. Like most casinos making their debut, M Resort drew a crowd at first. The crowds have been smaller during the traditionally slow summer months as the newness has worn off.

M Resort’s occupancy rate has averaged about 88 percent since its March opening with an average daily room rate of $95, Marnell said. According to the latest numbers from the Las Vegas Convention and Visitors Authority, occupancy rates across the valley in June were at 82.2 percent, down 7.2 percentage points from June last year.

“We are happy with that,” Marnell said of the numbers at his property. “I think that’s really good in the market, comparatively speaking to what I hear going on around town.”

M Resort sits at St. Rose Parkway and Interstate 15, a key location to grab Southern California visitors, Marnell said. The hotel-casino is the first property out-of-state drivers see when entering the Las Vegas Valley. Marnell said M Resort is bringing in 1,500 to 2,000 out-of-town visitors a day.

“I knew that we would have a good location. I knew that we would be able to attract people off Interstate 15 but not at the level we have,” Marnell said.

Marnell told Ralston his resort is piquing the curiosity of Strip visitors. His name also has helped to draw visitors, Marnell said. His father, Anthony Marnell II, opened the Rio in 1990 and has helped to build casinos on the Strip, including the Bellagio and Wynn Las Vegas.

“A lot of people are coming back for the Marnell name. They remember the Rio — the days when it was the little off-the-Strip property,” Marnell said. “It’s shocking how many letters I get that refer the M to the Rio.”

Marnell referred to his casino as “a cozy, local hotel-casino” focused on service rather than branding itself as flashier than other properties in town. He said M Resort’s opening has helped to lure more customers to other resorts in the south part of the valley.

“From all indications of my conversations with my colleagues in the gaming industry, we grew the south end of that market,” Marnell said.

The Sun reported earlier this month that competition for M could be on the horizon from one of its own investors.

A minority investor in the M Resort has asked the city of Henderson to annex 33 acres across the street from M Resort and zone it for a future casino-resort.

The site, located on the northeast corner of Las Vegas Boulevard and St. Rose Parkway, is held by four entities, three of which are private companies that list Raymond Shapiro, a developer who invested in the M Resort, as managing officer. Shapiro’s portion of the land is zoned tourist commercial, which allows for casino development.

Earlier this month Marnell told the Sun, “I don’t have any objection to it. I think it would be good for (Shapiro) and good for the city.” On Monday, Marnell added that Shapiro said he won’t soon be opening a casino on the land.

Marnell also told Ralston he agreed with casino owners who have said President Obama’s remarks earlier this year about Las Vegas have hurt business.

“I know factually that customers that did receive TARP (Troubled Asset Relief Program) money called and said we can’t come now. I also know that the day after Harry Reid got Rahm Emanuel to put out that general letter we had TARP recipients calling to come back to the hotel,” Marnell said. “But the overall economy is crushed. Companies are crushed, spending is getting cut.”

Marnell blamed lower room rates on a drop in convention business. When convention business picks up, he said, room rates will follow.

“We need the convention business back in this town. When the convention business comes back in this town, then the room rates will come back,” Marnell said. “Until then, I think this town is in for a long, hard discounted war on rooms.”