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Resort at Summerlin to Open Second Tower Next Month

The upscale Resort at Summerlin announced Monday it will open its second hotel tower after the New Year's holiday, paving the way for the property to launch a full-scale marketing effort that executives hope will boost business.

The $300 million hotel-casino has been plagued by construction cost overruns and meager customer counts since its "soft" opening in July, despite its scenic locale and proximity to the affluent and populous Summerlin community.

The resort posted an $18.9 million operating loss in the quarter ended Sept. 30, due partly to its inability to offer a full range of services to tourists seeking a luxurious golf and gambling getaway.

Effective Jan. 10, however, the Resort at Summerlin will open its 255-room Regent Grand Palms hotel tower, the Parian restaurant, the Tazzas lounge and other amenities.

The new facilities will complement the 286-room Regent Grand Spa and other restaurants, retail shops and spa that are already open. They'll also enable the resort to begin a more aggressive advertising campaign aimed at both tourists and local residents.

No additional employees are being hired to staff the new tower, a spokesperson said, adding that recent layoffs that trimmed the employee count to about 1,300 workers had contemplated the pending opening.

Darrell Luery, the resort's new president, has hired R&R Partners to help develop a revamped marketing approach. R&R, one of the state's top advertising agencies, has wide experience in hotel-casino marketing and lists major Strip resorts and the Las Vegas Convention & Visitors Authority among its clients.

The new ad campaign won't be aimed only at attracting tourists, however. The property's executives have acknowledged that drawing customers from the Summerlin area is a critical part of the long-term business strategy.

There's a relatively short window of opportunity for the Resort at Summerlin to build a loyal locals customer base. Michael Gaughan's Coast Hotels & Casinos Inc., second only to Station Casinos Inc. in revenues derived from the Las Vegas locals market, is opening a new property next year just a quarter mile away. Called Suncoast, it will be a formidable competitor to the Resort at Summerlin.

Executives of the Resort at Summerlin's parent company, Swiss Casinos of America Inc. -- itself a subsidiary of Swiss Casino Holdings AG of Zurich -- disclosed a month ago they are trying to restructure the property's debt and bring in new equity investors.

The Resort at Summerlin has $100 million of floating-rate first-mortgage notes and $120 million of 13 percent senior subordinated notes outstanding.

Moody's Investors Service cut its ratings on the resort's debt a month ago, citing concerns about the company's liquidity and its weak operating results. The resort's cash flow has fallen far short of its debt-service requirements, though parent company executives remain confident that with the full range of amenities now open, results will improve quickly.

Meanwhile, Swiss Casino Holdings has quietly put up additional equity in recent weeks, enabling the resort to make a $10 million payment due Dec. 15 on the property's subordinated notes.

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