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Rod Smith

Aladdin Going Hollywood

22 August 2005

These Planet Hollywood slots and some interior signs mark the start of the Aladdin's transition to the Planet Hollywood Resort & Casino.

A year after a Robert Earl-led investor group bought the Aladdin, the re-branding of the property is under way and the renovation work is about to start.

Earl, chief executive officer of Planet Hollywood International and cochairman of Aladdin owner OpBiz, said construction will begin in October and take a year. OpBiz is a partnership of Earl, Bay Harbour Management and Starwood Hotels and Resorts Worldwide.

Billboards saying "Planet Hollywood Resort & Casino Coming 2006" stretch around the casino's upper levels. Gradually, interior signs are changing.

A new Planet Hollywood logo has evolved and is showing up throughout the property, from four new Cadillac Escalades to drive VIPs around town to table game tops and slot machines.

The property will soon begin advertising in the Planet Hollywood name.

Spokeswoman Amy Sadowsky said the name transition has been confusing for some guests, but it will be worth the wait for the new owners.

"It's very complicated to do a major, wholesale remodeling while keeping the casino open. We wanted not to disrupt the guests, and that takes a lot of planning," she said.

The original $90 million construction budget has been increased to match escalating costs and more comprehensive plans, but Earl declined to say by how much. Las Vegas-based M.J. Dean Construction Co. is general contractor.

Also, Earl completed negotiations Friday with Boulevard Invest, owner of the Desert Passage, to integrate the Aladdin retail area with the casino as part of the rebranding and expansion project. The new agreement paves the way to expand the casino and retail areas, enhancing access points on the north and south ends of the property and rebuilding its Strip frontage, where P.F. Chang's is, to create a major entrance corridor.

One criticism of the current casino is that visitors walk past without seeing any clear entryways into Desert Passage or the casino. Earl said the essential element of the redesign is to correct that shortcoming and ease access.

"The reconstruction will completely, 100 percent address the Strip. It'll make a massive entrance in the middle, converting the whole front into one, huge plaza," he said.

The renovated Aladdin will feature a series of new restaurants and bars that will be announced this fall, Earl said.

It will also include a more visible entry on Harmon Avenue, which Earl said is important because every inch of the street from the Strip to Paradise Road is being redeveloped with condo projects.

"The Harmon entrance works quite well now, but it's just not visible," he said.

Redevelopment of the hotel-casino will be done in three phases to minimize customer disruptions and to ensure two-thirds of the casino and retail areas are always open, Earl said.

A part of the plan for luring customers involves walkways over the Strip connecting the Aladdin with the CityCenter and Cosmopolitan projects that will be built across the street by MGM Mirage and 3700 Associates, a partnership of former Venetian executive David Friedman, David Eichner and other investors.

As part of the Aladdin redevelopment, a partnership of Earl and Westgate Resorts, the world's largest privately held time share company, is developing a 52-story, $400 million time share project on the backside of the property, bringing the total number of on-site rooms to 4,000.

Earl expressed confidence that with the renovation, a large number of the guests will spend at least part of their time in its casino, restaurants, bars, nightclubs and shopping areas.

Whatever its long-term fate, Earl said it's been a successful year for the new owners.

"We had a lot to learn about the market, but we've done very well with the property. Starwood's been with us for a year and it's made a big difference in room rates," he said.

Occupancy has registered in the upper 90 percent range and the property has been full on weekends.

So far, the Aladdin and its new owners have been lucky, local gaming industry experts said Friday, but they wondered whether the new owners' plans equate to success for a long-troubled property.

"When Planet Hollywood bought the Aladdin, they acquired a property in free fall," University of Nevada, Las Vegas history professor Hal Rothman, who has studied the property, said. "They have been the beneficiaries of an incredibly fortuitous change in circumstances. Nowhere in United States, possibly even in the world, has the market been hotter than in Las Vegas for the last 18 months."

University of Nevada, Las Vegas professor Bill Thompson, who specializes in gaming studies, said the biggest problem for any owner is location.

"No other single location has failed as often or repeatedly as the Aladdin has," he said.

Still, Thompson said the longer they wait, the more they miss out on the boom going on in the Las Vegas market.

Jim Medick, chief executive officer of the MRC Group, Nevada's largest market research firm, took a wait-and-see attitude on how long Planet Hollywood will wait to start delivering on its public relations announcements.

"However, the longer they wait, the 'behinder' they get as construction costs continue to climb and the competition locks in their market shares," Medick said.

Rothman was skeptical of the Planet Hollywood brand.

"As for Planet Hollywood, its purchase of the Aladdin is one declining brand buying another," Rothman said. "As a brand, Planet Hollywood has seen much better days, roughly about 10 years ago."

But Earl expressed confidence the Planet Hollywood brand will enhance the property's long-term success.

"It will bring a lot more people who are not sleeping with us to see what Planet Hollywood means in a gaming area. The average (Las Vegas) visitor visits six casinos and gambles at four and a half casinos. Curiosity will bring a lot of them to Planet Hollywood," he said.

And in the end, Thompson said that's all they need.

"They want gamblers and tourists who are going to spend money, not just look at showcases. The Hollywood celebrity thing has been done to death, but the new name will create the curiosity they need to bring in customers," he said.