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Nongaming Hotels Thrive in Vegas

by Emily Kumler

LAS VEGAS -- The allure of Las Vegas as a hot tourism destination is drawing more InterContinental Hotels Group properties to the area. The company will add three new Las Vegas properties by the end of 2006, increasing its presence in the city to eight nongaming hotels.

"The demand for accommodations is so high," said Robert LaFleur, a lodging and leisure analyst with Susquehanna International Group. "People want to stay on or near the Strip, but they don't want to pay $300 a night."

InterContinental will open two Holiday Inn Express hotels by the end of 2006; construction will start in early 2005. One will be at the intersection of U.S. Highway 95 and Ann Road; the other will be at the intersection of Rainbow Boulevard and Sobb Avenue. Both properties are franchises. Six months after the construction is complete on the Rainbow and Sobb property, the company plans to open a Holiday Inn hotel across the street.

"Las Vegas is the largest hotel market in the United States," said Dave Wilensky, regional director of franchise sales and development for InterContinental. "IHG has always been in the Las Vegas market and we have added the new Express on the south side of the city within the last year. We have not broken ground on the northwest project or the two new deals on the west side."

Cara Roberts, a spokeswoman for the Las Vegas Chamber of Commerce, said InterContinental's expansion is another indication of the city's vibrant economy.

"Las Vegas is truly a magnet for visitors of all economic levels," Roberts said. "We're a well-rounded internationally recognized city."

The company considers its Holiday Inn Express, which was founded in 1991, a midpriced hotel for value-oriented travelers. Intercontinental has 1,500 Express hotels, which have a combined 124,000 rooms worldwide and charge from $60 to $90 per night, depending on the market.

Holiday Inn, which started in 1952, operates or franchises more than 1,500 properties worldwide. Each hotel sets its own room rates.

Wilensky said the company would like to build a full-service Holiday Inn near the Las Vegas Convention Center and Las Vegas Boulevard South, but as of now has no immediate plans to buy or build in those locations. Wilensky said Las Vegas is a significant market for the company.

The company has its largest Candlewood Suites Hotel, designed for guests staying more than one night with rooms equipped with full service kitchens, videocassette recorders and other amenities, on Paradise Road.

LaFleur said exposure is another reason for nongaming hotels to increase their presence with Las Vegas properties.

"There is a strategic view from most major lodging companies that they have to have properties in all major hotel markets," LaFleur said, adding that the more hotels it has in Las Vegas, the more worldwide recognition it will receive.

"They want to have an outpost in all major convention destinations and Las Vegas is a major convention destination. They want to beef up their exposure by offering more units of their brands."

Roberts said there was a phenomenon in Denver where hotel chains opened in suburban areas to accommodate tourists visiting relatives living in the area. As more people move to Las Vegas, more families come to visit those residents, Roberts said, adding that the demand for lodging extends beyond the obvious draw of the casinos.

Likewise, she said, traveling business people may want to stay near the office park they are visiting, which creates a market for hotels in corporate locations.

"I think it's something that growing cities experience," Roberts said. "And it's not just and indication of the cities current economic health but a recognition that national companies are increasingly willing to bet on Las Vegas."

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