Business Travel News - February 9, 2009 - (Page 22)

DESTINATIONS Vegas’ CityCenter Trims Plans Construction problems and the ongoing U.S. recession last month prompted MGM Mirage and Infinity World Development Corp. to postpone the opening of The Harmon Hotel & Spa, a key feature of its massive Las Vegas CityCenter project, for one year until the end of 2010. The Harmon still is scheduled to feature 400 guest rooms, but plans to include 200 residential condominium units have been canceled, reducing CityCenter costs by $600 million. The remaining CityCenter components—the 4,000-room Aria Resort & Casino, the 400-room Mandarin Oriental Hotel & Residences and the all-condo Veer Towers—remain on track to open in December. “By cancelling The Harmon condominium component, we will be able to avoid the need for substantial redesign of The Harmon resulting from contractor construction errors,” said Robert Baldwin, president and CEO of CityCenter. CityCenter, a joint venture between MGM Mirage and Dubai World subsidiary Infinity World Development, is slated to occupy 67 acres between the Bellagio and Monte Carlo resorts on the Strip. ■ PLANNED HOTEL ROOM DEVELOPMENT DECLINES THE VEGAS STRIP Illustrating the impact of the ongoing financial crisis and the difficulties in securing credit for long term projects on the lodging industry, Smith Travel Research last month showed a marked decline in the number of hotel rooms in the Las Vegas development pipeline. That figure was at 21,447 rooms in December 2008, more than 50 percent fewer than the 43,218 that were so listed in December 2007. Of those rooms in the current pipeline, 11,845 are categorized as in construction, down more than 47 percent from the previous year. Those figures represent some of the largest drops in any U.S. location in the Smith Travel Research/Torto Wheaton Research/Dodge Construction Pipeline Report. WYNN’S 2,000-SUITE ENCORE OPENS ITS DOORS Not every large Las Vegas project is imperiled, however. Wynn Resorts in December opened Encore, a $2.3 billion, 2,034-suite hotel and casino connected to the company’s flagship 2,716-room Wynn Las Vegas hotel. Encore features five restaurants, 11 retail outlets, seven bars and lounges, a nightclub and a spa and salon, but not the same emphasis on meeting space as its sister: Encore offers about 60,000 square feet of configurable event space, inWYNN’S TWIN cluding boardrooms and a ballroom, compared with the 223,000 square feet of meeting space offered in the Wynn Las Vegas. Opening a major new property at the height of a recession has its risks, as chairman and CEO Steve Wynn acknowledged in an October Wynn Resorts conference call. “We have got a very, very dynamic program to open Encore, but in good times, you might project 95 percent occupancy. That is what we always have had for the last 40 years: 95 percent to 100 percent occupancy whenever we open a new hotel,” Wynn said. “Let’s say now, I’m not sure we are going to be able to beat past 90 percent. We might be in the 80s. Maybe mid-week you could be in the high 70s and low 80s in the worst-case scenario in 2009.” VEGAS OCCUPANCY, RATES ENDURE TOUGH 2008 Occupancy January 2008 February March April May June July August September October November January-November 84.9% 89.4% 92.2% 90.0% 89.7% 89.4% 87.2% 88.3% 84.3% 83.8% 79.2% 87.1% Annual change -0.5% -0.9% -1.7% -3.8% -2.4% -2.5% -4.8% -2.9% -7.0% -8.5% -7.7% -3.9% Average daily rate $130.96 $128.80 $135.11 $135.67 $135.17 $113.48 $105.97 $107.01 $112.58 $115.68 $108.80 $121.01 Annual change -2.5% -5.1% -0.8% -7.4% -5.5% -16.0% -10.0% -15.3% -21.0% -14.3% -8.1% -9.5% Source: Las Vegas Convention & Visitors Authority —Chris Davis BTNonline.com Highlights ON-DEMAND WEBCAST FREE NEWSLETTERS Buyers can subscribe at no charge to get BTN's e-mailed newsletters. FRESH BTN RESEARCH >> Virtual Corporate Travel World: Business Travel Management 2009 BTN's online education, networking and trade show featuring forecasts and future issues in corporate travel aviation, lodging, meetings and technology. >> BTN WHITE PAPER Benchmarking savings >> Euro BTN Weekly: Get breaking business travel news and the latest developments in managed travel for companies based or doing business in Europe by subscribing to BTN's new weekly news product. >>THE 2008 CORPORATE TRAVELER Measuring policy compliance, service expectations and technology use. Sponsored in part by American Express Business Travel and Travelport. 22 Monday, February 9, 2009 www.BTNonline.com Business Travel News http://www.BTNonline.com http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - February 9, 2009

Business Travel News - February 9, 2009
Contents
Inside Track
Profiles In Travel Mgmt
Forum
Aviation
Lodging
Car & Ground Transportation
Travel Management
Destinations
Washington Wire

Business Travel News - February 9, 2009