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Rod Smith
 

Ritz-Carlton Pursuing Vegas Property

27 April 2004

LAS VEGAS -- Millions of visitors go on shopping sprees in Las Vegas, but not many of them with the style or on the scale of Simon Cooper.

Cooper, president of the five-diamond Ritz-Carlton hotel company, has been shopping for a site on the Strip to develop a second Las Vegas area five-star, luxury hotel. The project would include a residential development.

He said Ritz-Carlton's plans for a midsize Strip hotel, which he declined to discuss further, is something company customers are demanding.

Cooper said customers will be lost to competitors if it is not available and they are willing to pay room rates that would make it profitable.

"Las Vegas, out of all the megaentertainment areas, probably has the best draw for all ages. Other areas are good draws, but not for all ages," he said.

The breadth of the demand, the certainty of the climate and the easy, value-priced transportation in and out of Las Vegas all add to the company's interest in developing a Strip hotel, he said.

"Access is critical. It's very easy to fly to Vegas. All around, it's a huge magnet and a very successful one," Cooper said.

Billy Vassiliadis, chief executive officer for Las Vegas-based R&R Partners, which represents the the Las Vegas Convention and Visitors Authority, said the Ritz-Carlton's interest in Las Vegas represents a worldwide mood shift toward the city as a destination.

"It's a tremendous endorsement for the transformation the destination has had in the last five or six years," he said.

Cooper said that transformation started more than 20 years ago when competition started to arise, first with Atlantic City.

"Nobody has done a better job of redefining themselves as an entertainment capital. And the ("What happens here, stays here") ad campaign makes it a little edgier, more risque. Add the new shows and it makes it more European and more appealing to Europeans," Cooper said.

Vassiliadis also said the Ritz-Carlton's endorsement is a signal Las Vegas can stand increased competition in the gaming and lodging industries.

Bill Thompson, University of Nevada, Las Vegas professor and casino industry expert, agreed Ritz-Carlton's interest shows Las Vegas can compete as a destination with any destination.

"What this shows is there are luxury tourist opportunities for Las Vegas that put us in a class where other jurisdictions around the country can't shake the growth potential of the Strip," he said.

Joe Greff, gaming analyst at Fulcrum Global Partners, an independent Wall Street investment research firm, also speculated that business travelers who accumulate frequent flier miles and come to Las Vegas for conventions are looking for first-class opportunities to come back on vacations.

Cooper expects Ritz-Carlton to open a hotel on the Strip in 2008 or 2009.

He said the Strip Ritz-Carlton will be a stand-alone hotel, unlike the five-diamond Four Seasons in the Mandalay Bay Resort complex, but will have a major residential component.

"We've seen the growth of residential offerings like Turnberry (Place) and many resorts we've developed have a residential or a Ritz-Carlton Club associated with them," Cooper said.

He said he expects the new Strip hotel will have about 300 rooms, depending on the area available once a site is selected and the number of residential units that will be developed is decided.

He said the hotel will offer gaming as an amenity, but will not challenge the megaresorts in terms of size.

"No one does megaresorts better than the developers in Las Vegas so I wouldn't want to compete with them," Cooper said.

Cooper contrasted his interest in the Strip with the company's year-old, 349-room Lake Las Vegas property, which was developed because Ritz-Carlton customers were demanding a desert get-away.

It's proximity to the Strip was incidental to its development and the success it has achieved, running at occupancy rates of more than 80 percent.

Other than developing a new Strip property, Cooper said he expects most of his company's foreseeable expansion to be overseas, especially in Asia, to round out its international portfolio.

Headquartered in Chevy Chase, Md., the Ritz-Carlton hotel company was founded in 1983 with the acquisition of The Ritz-Carlton hotel in Boston and the name "Ritz-Carlton."