A Tale of Two Casinos

December marked the opening of the much anticipated MGM MIRAGE and Dubai World CityCenter project. CEM’s Managing Editor Krista Reiner and I traveled to Las Vegas to cover the opening and for a series of business meetings and client calls. Reiner stayed at the beautiful and lavish Vdara Hotel, which is one of the six towers at CityCenter; I stayed at the nostalgic Golden Gate Casino on Fremont Street.

While Vdara is one of the newest Las Vegas hotels to open, Golden Gate is one of Las Vegas’ oldest casino hotel properties, opening in 1906. The real estate the Golden Gate resides on was purchased through a land auction held on Main and Fremont in 1905, establishing the town site for what we all know now as Las Vegas. The purchase price for the undeveloped property at that time was $1,750. Compare that to the $8.2 billion price tag for the completed CityCenter.

Granted CityCenter has more rooms, restaurants, gaming tables, telephones and paved streets, in its heyday Golden Gate, then known as Hotel Nevada, was considered first class and as comfortable a hotel as could be found anywhere, with spacious 100-square-feet rooms. More than 100 years old, Golden Gate has kept much of its history intact, including a Wells Fargo Stage Lines safe, which sits just outside the elevator in the lobby.

While Reiner was given guided tours of the new CityCenter from the back-end to all the front-end facilities and amenities designed to treat and delight the senses of its patrons, I walked the gaming floors of the Fremont Street properties. During my explorations, I made several observations while visiting with patrons. I caution you that these are personal opinions and haven’t been extrapolated from data taken in through a scientific survey, but here are my thoughts.

The Fremont Street Experience was a novel idea and one needed to address a part of Las Vegas in serious decline. However, it’s just not one enjoyed much by this customer or the ones I spoke with. It’s too loud and seems geared toward a crowd that is really into heavy metal music. Whether you like heavy metal music isn’t the point. It’s about running a business that appeals to affluent customers who like to gamble. This spectacle does not. To some extent, about half the properties on Fremont Street appear to have thrown in the towel. This is a mistake. The Fremont Street area could, with some fine tuning on theme and modest capital investment, become a preferred destination to those who could appreciate what a group of themed boutique properties has to offer. They would capitalize on their history, not fight it. Right now there’s an obvious identity crisis going on.

That being said, the new CityCenter has witnessed its fair share of controversy, intensified with the economic crisis of the last several years. Its December opening added 5,891 hotel rooms to the Strip to total 6,291 when complete. Currently, 19 of the world’s 25 largest hotels by room count are on the Strip, with a total of more than 67,000 rooms. How 73,000 hotel rooms in Las Vegas will affect occupancy and room rates is anyones guess, but it’s worth looking at.

One important fact to understand is that you can only be as healthy as your immediate competition. Like it or not, you’re both in it together. CityCenter must prosper in order for all the other Strip properties to prosper as well. The same holds true for properties on Fremont Street, including Golden Gate. I’d have to give it to the Strip properties on theme continuity, but Fremont Street is holding the opportunity cards.

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