Wynn defying economic downturn with Encore opening

LAS VEGAS, Nevada -- The $2.3 billion Encore will open Dec. 22 in the middle of what many have called the worst economic crisis ever to hit the Strip and the gaming industry.

But don't expect Wynn Resorts Ltd. to change its style.

Encore, with 2,034 hotel rooms, is attached to Wynn Las Vegas. The resort will open at 8 p.m., three days before Christmas, with 72,000 square feet of casino space, five restaurants, 11 retail outlets, a nightclub and a luxury spa.

On Wednesday, Encore began selling tickets for entertainer Danny Gans, who will perform in the resort's theater beginning Feb. 10.

Deutsche Bank gaming analyst Bill Lerner doesn't think Encore's opening will grow the market in an environment hampered by a slow economy and reduced consumer spending. On the Strip, gaming revenues have declined more than 6 percent in 2008 through September.

Lerner said Encore will probably take some business from Wynn Las Vegas and draw customers from neighboring Strip resorts. But he doubts Wynn Resorts Chairman Steve Wynn will hold back on the property's grand opening extravaganza.

"It's not going to change the way he opens the property," Lerner said. "There won't be discounted rates or reduced price points. If you do that, it's tough to get them back when the market improves."

Brian Gordon, a partner in Las Vegas-based business advisory firm Applied Analysis, said new casino openings have historically boosted visitation. But a resort like Encore has never opened in this type of economic climate.

"In the big picture, Encore is the beginning of the wave of several project openings over the next 12 months," Gordon said. "Only time will tell how the new projects will perform."

Encore is attached to the 2,700-room Wynn Las Vegas, so the properties will share back-of-the-house operations.

"Service levels will still be beyond expectations," Lerner said.

During Wynn Resorts' quarterly earnings conference call Oct. 30, Wynn gave away a few details about Encore, such as large glass windows that allow casino customers to look out onto the resort's grounds.

"It's the prettiest thing we've ever done," Wynn said. "If that sounds like developerspeak, it is."

According to the Encore Web site, hotel room rates start at roughly $320 a night for midweek.

The company started a national advertising campaign for the resort. A television commercial features Wynn sitting atop Encore and is airing on CNBC, Fox News, CNN and Bloomberg Television, as well as locally on Fox stations in San Diego, Phoenix, Los Angeles, San Francisco and Las Vegas.

The commercial is similar to the television spot that aired in April 2005 for the opening of Wynn Las Vegas.

In addition, Wynn Resorts released a nearly minute-and-a-half long spot on YouTube.com that shows the making of the Encore commercial.