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Le Reve Sets Stage for Wynn VS. MGM Mirage Battle in 2005

MGM Mirage now controls 60 percent of the Strip high roller market, up from the 50 percent the company controlled in May 2000 after MGM Grand bought Wynn's former operation, Mirage Resorts,

Wynn Resorts' recent Security and Exchange Commission filing for its planned public offering detailed Le Reve's planned marketing strategy, which aims directly at MGM Mirage's market leading position, experts said.

When Wynn opened The Mirage in 1989, the property supplanted his own Golden Nugget as well as Caesars Palace as the city's home to the biggest bettors.

Bellagio, which Wynn opened in 1998, is now the Strip's big-bettor capital, followed by sister properties MGM Grand and The Mirage.

The 40 percent of the high roller market not controlled by MGM Mirage is split between a host of other properties, including Caesars Palace, Mandalay Bay and The Venetian.

Wynn's strategy to capture a significant share of the high roller market is spelled out in the commission filing.

The property will "showcase the Wynn brand," the filing noted. "We believe that Mr. Wynn is widely viewed as the premier designer, developer and operator of destination casino resorts in Las Vegas.

"We believe that Le Reve will represent a natural extension of the concepts Mr. Wynn has utilized in developing other major destination casino resorts."

Wynn's commission filing compared Le Reve's planned attributes with statistics from his two most notable Las Vegas creations, The Mirage and Bellagio.

The property will be seven years younger than Bellagio and 16 years younger than The Mirage when it opens.

"We believe that, at the time of Le Reve's planned opening in March 2005, it will have been almost five years since a major new hotel casino resort opened on the Las Vegas Strip," the filing noted. "As a result, we expect that there will be a high level of customer anticipation for Le Reve."

But MGM Mirage isn't ready to concede part of their market share to Wynn. MGM Mirage President and Chief Financial Officer Jim Murren said Thursday that his company is ready for the challenge, citing MGM Mirage's mix of properties, entertainment and restaurants as powerful weapons in its figurative quiver.

"Clearly Steve will build a tremendous property," Murren said. "We're excited and encouraged about his ability to put his creative juices to work. He'll help Las Vegas, and if it helps Las Vegas, it helps us."

Murren noted that the company already thrives against tough competition - Caesars Palace and The Venetian "aren't pussycats," he said, adding that MGM Mirage looks forward to the future competition with Wynn.

"To prepare, you put together a battle plan," Murren said. "We're constantly trying to fortify our properties, our relationships with customers and our employees."

Murren said MGM Mirage will likely maintain its current high roller market share after Le Reve opens, predicting that Wynn will take business from other competitors.

"We're adding more attractions, restaurants and shows and we'll likely add a hotel tower to Bellagio," he said. "We have a great marketing staff and 30 offices around the world. If you have the greatest product and the best sales force, shame on you if you don't do well. Steve Wynn will put his gunsights on Bellagio and the luxury market, but it's surprising if anyone thinks he's going to hurt our business."

MGM Mirage is a tough operator and will be difficult to compete against for top customers, said Larry Klatzkin, a Jefferies & Co. casino industry analyst.

"They know the business," Klatzkin said. "The Mansion (the MGM Grand's high roller villas) and Bellagio are phenomenal products. It's amazing what they've done."

Klatzkin said MGM Mirage's strength isn't merely the quality of its premier offerings.

"They have the top hotels and most of the top restaurants and shows," he said. "Steve's got his work cut out for him."

Wynn's employees said Wednesday that he was unable to discuss Le Reve's marketing approach, citing a federally mandated quiet time connected with his planned public offering.

"Le Reve is fundamentally a new project," Wynn said earlier this year. "When we built The Mirage, Treasure Island and Bellagio, they were all essentially the same building - The Mirage with three different budgets.

"These three hotels were designed from the outside looking in, creating a picture to be viewed from outside. With Le Reve, it will be designed from the inside out. Everything will revolve around the guest and what he'll see and experience."

Wynn said bigger hotel rooms and shorter hotel corridors are important distinctions for his planned megaresort.

"The Mirage and Bellagio forces people to make a lot of long walks through big spaces. My challenge has been to figure out how to make a big place cozy," Wynn said. "Bellagio's public areas are about 2 million square feet. Can you make 2 million square feet seem small? That's what we've been doing."

One casino industry analyst who spoke on condition of anonymity said Wynn has two big things going for him as Le Reve's opening date nears.

Most important is Wynn's track record, the analyst said.

"Everyone wants to work for him, because everyone who has worked in Las Vegas knows Wynn will succeed," the analyst said.

But Wynn Resorts' deal to open at least one casino in Macau will also be a major plus, he said.

"He's going to be able to cross-market from Macau, which will be a tremendous advantage," the analyst said, noting the semiautonomous Chinese enclave's proximity to many of the world's top high rollers in Hong Kong and China.

The analyst cited Wynn's employment of Linda Chen as an executive vice president as a coup. Chen, the former MGM Grand executive vice president of Far East marketing, is one of the Strip's top marketing professionals.

"Signing Chen was a coup," the analyst said. The marketing expertise plus a Wynn property in Macau would make the Wynn name pretty tough too beat."

MGM Mirage's Murren admitted that hiring Chen from the MGM Grand was a plus for Le Reve.

"You always know you're going to lose good people," he said. "She's a very smart young woman, and we're proud of her success

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