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Howard Stutz

MGM Grand remodeling begins after nearly eight-year delay

28 February 2012

LAS VEGAS, Nevada -- So there's no confusion, the temporary hotel room in the lobby of the MGM Grand Las Vegas is not available.

Besides, there isn't a bathroom.

But the mock-up serves a purpose, said MGM Grand President Scott Sibella.

It tells guests the 5,044-room Strip resort's propertywide remodeling is under way after being delayed for almost eight years.

So does the 14-foot replica paint can at the property's main pedestrian entrance off the Strip.

The $160 million room renovation is the most visible and anticipated aspect of the property's remodeling, which will include all 3,570 rooms and 642 suites in the MGM Grand's main tower. Some 1,600 rooms have already received contemporary furnishings and color schemes. The project is expected to be completed by September.

Sibella said convention organizers and frequent guests had long been told the rooms would be redone. Plans for the room remodel were drawn up more than eight years ago, but were put on hold when the economy tanked.

"Having the model room in the lobby is a clear sign to show guests the renovation project is happening," Sibella said.

Revenues from the hotel rooms have become just as important to the bottom line of MGM Grand parent MGM Resorts International as the figures produced by the casino.

In the fourth quarter ended Dec. 31, MGM Resorts officials said revenue per available room -- a nontraditional lodging industry profitability measurement -- for the company's 10 Strip hotel-casinos rose 13 percent.

The average daily room rate was up 10 percent from a year ago. Fresher rooms with new amenities means the company can charge a higher average daily rate.

MGM Resorts Chairman Jim Murren said last week that the company's revenue per occupied room is also increasing. The numbers, Murren said, show visitors are willing to spend more in both gaming and nongaming areas. He said the company is optimistic that visitation to Las Vegas will continue to grow throughout 2012.

"Our forward bookings are up and they are continuing to go up," Murren said.

The MGM Grand's remodeling is being rolled out in pieces.

Last month, the live lion habitat in the casino was closed. It was also announced that Studio 54, the nightclub that had been part of the hotel-casino for 14 years, will be replaced by Hakkasan, an upscale Mandarin Chinese restaurant and nightclub to open by New Year's Eve.

Sibella said the hotel, which turns 20 in 2013, has long needed a makeover.

The Strip may not see another new resort enter the market this decade, but MGM Grand must upgrade to match similar actions at competing resorts.

Sibella said the remodeling allows the property to recapture its magic in time for 20-year celebration.

"This property sees an average of 40,000 to 50,000 people a day," Sibella said. "That's not just our hotel guests. Everyone knows the emerald green building. It's the first building you see on the Strip when you arrive in Las Vegas by airline."

Sibella, who has been president of the MGM Grand for 14 months, said plans for the renovation are to add amenities that focus on entertainment.

New attractions include a 288-seat comedy club operated by comedian Brad Garrett, which is expected to open in March in the hotel's small retail area that connects the parking structure and main lobby. Meanwhile, new restaurants are opening, including the Sugar Factory and a Blizz Frozen Yogurt.

Plans are underway to remodel the MGM Grand's 170,000 square-foot casino, including adding an attraction or entertainment element to replace the closed lion habitat.

In the hotel lobby, MGM Grand created an interactive video wall behind the front desk. The center screen streams a live Twitter feed for guests on or off the property to post feedback or comments using the handle @mgmvideowall.

Sibella took over the MGM Grand after serving as president of The Mirage for five years, where he oversaw the Strip resort's $100 million renovation in time for that property's 20th anniversary.

"Maybe I'm getting a reputation as a guy who spends money," Sibella joked.

A couple of months after transferring to the MGM Grand, Sibella participated in the CBS reality television series "Undercover Boss," where he performed several jobs at the MGM Grand wearing a disguise.

Taking part in the television show helped him learn about the hotel-casino, which employs roughly 9,000 workers. Some 20 percent of those workers, he said, have been at the MGM Grand since Day One.

"We're excited about the changes," Sibella said. "The room remodel is just the start."