Sands Arena Opening Late 2018 or Early 2019

Las Vegas Sands reported their second quarter 2016 earnings earlier this afternoon.

As usual most of the earnings conference call centered on the company's primary casino operations in Macau and Singapore, but there was one tidbit about Las Vegas:

The Sands music arena which will be built with Madison Square Garden will begin construction in early 2017.

The arena located behind Venetian and Palazzo will take 18 to 24 months to build, which means the opening date will be Late 2018 or early 2019.

I suppose that timeline is perfectly reasonable for a new arena to be constructed, but 2019 seems like a long way off. I was looking forward to the Sands arena and T-Mobile Arena squaring off and competing for top musical acts, but I guess we'll have to wait a few years.

Sands Arena behind Venetian and Palazzo Announced

Las Vegas Sands and The Madison Square Garden Company have announced plans to build a new 17,500 seat arena behind Sands properties The Venetian and Palazzo.



The partnership was announced in a press release earlier today and will also involve Azoff MSG Entertainment, Live Nation, and Oak View Group.

At first glance this seems like a direct competitor to MGM's new T-Mobile Arena, however this venue will be slightly different as it will be designed for music concerts first and foremost. The arena won't be hosting an NBA or NHL team, but UFC and boxing might be a possibility.

The first question is whether Las Vegas really needs another arena like this. Along with the new T-Mobile Arena many other large music venues scatter the Strip including MGM Grand Garden Arena, Mandalay Bay Events Center, Axis at Planet Hollywood, The Colosseum at Caesars, and the upcoming new Monte Carlo Theater.

I'm guessing Sands and MSG have done their homework and determined the demand will be there. MSG has apparently had great success in the Los Angeles area by remodeling the Forum to a similar music centered arena.

It will also be interesting to see what kind of amenities will surround the arena. Sands will be building a walkway back, but it's not really clear if there will be any dining and shopping similar to The Linq Promenade and The Park.

Another angle is the arena's close proximity to the upcoming Wynn Paradise Park development. I suppose there could be some synergies if Wynn and Sands were willing to work together to create some kind of pedestrian access between the two.

Encore Player's Club

One of the narratives in Las Vegas news lately has been the premise that young people don't gamble. This has led to casinos trying different things to try to get young people interested in gambling.

Skill based slot machines are going to be hitting the floor in 2016. I think skill based machines are exciting and have lots of potential, but only time will tell if they actually catch on.

Another thing casinos are doing is to combine the casino with the nightclub. Last year The Palazzo introduced the Lavo Casino Club which essentially added a few table games to the restaurant and nightclub.

More recently Encore has introduced the Player's Club. This area off the casino floor is essentially a lounge with casino games alongside non-casino games such as pool and bar shuffleboard. Vital Vegas has posted a few photos of the Player's Club.

I think it's a good idea. If young people won't go to the casino, why not bring the casino to them. Someone might not want to seek out a casino gaming experience, but might play if a game is presented to them in a more relaxed environment.

Las Vegas Sands Reports Third Quarter 2015 Results

Las Vegas Sands reported third quarter 2015 earnings results earlier today. The weak Macau market caused gaming revenue to decline significantly, but that softness was offset by a strong performance at Marina Bay Sands in Singapore and at Bethlehem Sands in Pennsylvania.

In Las Vegas at the company's Venetian and Palazzo properties gaming revenue was down 22.5%. Non-gaming on the other hand was very strong with rooms up 19.4% and food and beverage up 33.9%.

Perhaps the most surprising thing about today's results was the Sands' decision to raise the quarterly dividend by 10.8% from 65 to 72 cents per share starting in 2016. With the weakness in Macau I was thinking the company might have to keep the dividend steady, or even cut the dividend similar to what Wynn Resorts did recently.

Speaking of Wynn, Steve Wynn's comments about the Macau government and the government's response were bound to be asked about on the Las Vegas Sands earnings conference call.

As expected Sheldon Adelson was overtly respectful to the government saying, "We're in China, let the Chinese decide what they want to do with the concessionaires. Again it's our privilege, it's not our right. So we'll do everything we can to justify getting the blessings from the Macau government. It's their government, it's their right and we'll do whatever they ask us to do."

Update on Stalled Construction Projects

Four years ago I wrote a blog post about stalled and abandoned Las Vegas construction projects. I thought it would be fun to go back and see what has happened to those projects:

- Fontainebleau - sold to Carl Icahn and is essentially abandoned.

- Echelon - sold to Genting Group and will be built into Resorts World.

- St. Regis tower at Palazzo - Still unfinished. A building wrap was installed to hide the construction. Las Vegas Sands has talked about doing something with it, but that hasn't happened yet.

- Harmon Hotel at CityCenter - The tower was deconstructed. The Crystals mall will likely expand into that space.

- The Shops at Summerlin - Developed by the Howard Hughes Corporation it was re-branded as Downtown Summerlin and is open with a multitude of retail and dining establishments.

- Wyndham Desert Blue timeshare across from Rio - Work resumed in 2013 and the project was finished. It's a nice looking building.

- ManhattanWest - The project was purchased for pennies on the dollar and construction resumed in 2013. It was renamed The Gramercy and is now open with upscale residential, retail, and office space.

- Vantage Lofts - opened in spring 2014 as Vantage Luxury Flats and Loft Living.

- Mercer - The project was purchased by a developer who plans to open it in the first quarter of 2017. They kept the name Mercer.

I couldn't find any updates on Parkline Lofts, Spanish View Towers, or Uptown. I'm assuming they're still stalled and/or abandoned.

Lawsuit against Resort Fees

A California man has filed a lawsuit against The Venetian and The Palazzo alleging that the $28 a night resort fee was not disclosed at the time of booking.

While I don't think this particular lawsuit will go very far in eliminating resort fees, it's nice to see some mainstream media attention pointing out what loyal Las Vegas fans have known for a while - that resort fees are a nuisance with the potential to put a serious damper on a vacation.

Many people compare resort fees to airline baggage fees - but at least with the airlines you could theoretically choose to avoid the fee by not checking (or even carrying) a bag. With the hotel fees you are pretty much stuck with the fee no matter what.

Since resort fees are very profitable for hotels, they are probably here to stay. I just hope that actions like this lawsuit will at least make the public aware of the fees so they aren't totally blindsided when they check in to their hotel stay.

Chris Paul Celebrates All Star MVP in Vegas

Right after being named MVP at the NBA All Star game in Houston, Chris Paul and his entourage hopped on a plane and headed to Las Vegas. He celebrated at Lavo along with his brother CJ, who was celebrating his 30th birthday.

The most impressive thing about this story is the timing. I think the game ended at around 10:30 central time, and he was able to be in Vegas at the club by 1:00 am pacific. It must be pretty sweet to jet off to Vegas on a moment's notice (although he was probably planning on going even if he didn't win the MVP).

Venetian Palazzo Open Bar Package

A new open bar package is now available at Venetian and Palazzo.

The Bar Hop package is $75 per day from noon to midnight, or $150 for a weekend package that runs from Friday at noon to Sunday at 6 pm.

"Enjoy unlimited drinks, house wine, and domestic beer at Salute Lounge, Laguna Champagne Bar, La Scena Lounge, Fusion Latin Mixology Bar, and Oculus, plus complimentary admission to both V Bar and AzureTM Luxury Pool."

The $75 price tag seems a little steep, especially since the drink offerings are limited. I think I would rather just pay as I go and have the freedom to leave the property if I wanted to.

On the other hand getting the whole weekend for $150 could be a good deal if you are planning on using Venetian and Palazzo as your base of operations.

No telling how long this package will be offered, so be sure to check directly with Venetian / Palazzo before making any plans.

Stalled and Abandoned Las Vegas Construction Projects

Vegas Inc. had a story on Friday profiling stalled and abandoned construction projects in Las Vegas.

I was thinking about writing about stalled construction projects a few weeks ago, and these six immediately came to mind:

- Fontainebleau
- Echelon
- St. Regis tower at Palazzo
- Harmon Hotel at CityCenter
- The Shops at Summerlin
- Wyndham Blue across from Rio

The Vegas Inc. story also profiled some lesser known projects:

- ManhattanWest
- Mercer
- Parkline Lofts
- Spanish View Towers
- Uptown
- Vantage Lofts

We didn't really need any more evidence that the Las Vegas real estate market is struggling, but 12 stalled projects really hammers home the point.

UPDATE: August 21, 2015 - I wrote a blog post updating the status of these projects.

Cosmopolitan gets Sportsbook

Just in time for March Madness, Cosmopolitan has opened a sportsbook. Cosmo has partnered with Cantor Gaming to open the book on the second floor of the hotel next to Holstein's restaurant and Marquee Nightclub. The sportsbook is small by Strip standards, but with Cantor's mobile gaming devices customers won't need to actually be at the sportsbook to place wagers.

Cantor has some interesting new concepts for sports betting, including live betting throughout the game. They just opened a new book at Tropicana, and also have locations at M Resort, Venetian and Palazzo.

When Cosmopolitan opened in December it did not have a "traditional" sportsbook. Instead the Book & Stage lounge served as a place where you could place wagers. The betting terminals at Book & Stage will remain open.

I know Cosmo caught some flack for not having a real sportsbook. I wonder if this is a direct response to that, or if it was planned all along. It seems like sports weekends are a huge part of Las Vegas with the Super Bowl and March Madness. Having a legit sportsbook would almost seem like a requirement for any casino resort.



For more information, see the Press Release and Cantor Gaming.

Las Vegas Sands cuts Comps

In a conference call on Thursday, Las Vegas Sands CEO Sheldon Adelson stated that the company has cut comps at Venetian and Palazzo, instead charging full price for hotel rooms:

"We've essentially cut all of our comps except our most highly-rated players. No more comped rooms. No food and beverage. No showroom credits. We're selling rooms. We see it's resulting in a substantial increase in cash income."

Las Vegas Sands focuses heavily on convention bookings. Bookings have evidently been strong lately, so they apparently don't feel the need to lure in average customers with free rooms.

It's an interesting strategy. While I'm not sure I would have made such a bold statement to the public about cutting comps, if they can fill their rooms and still charge full price, why wouldn't they?

If MGM or Caesars had done this I think it probably would have been a bad move, but LVS only has 2 hotels in Las Vegas and they're making more money overseas anyway, so I think they can get away with it.

Las Vegas Chinese New Year Decorations

Chinese New Year is a big deal in Las Vegas. Many high rollers come from the far east to celebrate the new year, which begins on February 3rd this year. The upcoming year will be the year of the rabbit.

Check out how some of the major hotels decorate for Chinese New Year (photos are from each hotel's twitter and facebook pages):

Caesars Palace:



MGM Grand:


Aria:


Bellagio:


Palazzo:


Wynn Las Vegas:


Mirage:

i♥burgers Opening Soon

Another new premium gourmet burger restaurant will be opening on the Las Vegas Strip. i♥burgers will be located in The Shoppes at the Palazzo. The burgers will hit the grill this winter.

The concept seems fairly similar to the other burger joints in Vegas. Customers can choose from specialty burgers or can create their own. A mixologist will stir up some tasty beverages and shakes, and i♥burgers will even have its own "fry menu".

When KGB was opening a few months ago at Harrah's I had wondered if the Las Vegas gourmet burger market was becoming a little too saturated. It looks like the answer is no, at least not yet. After all, almost everyone ♥'s a good burger.



Source: i♥burgers Press Release.

LVS is on a Roll

Las Vegas Sands (owner of the Venetian and Palazzo) reported strong third quarter results today, including a 67% year over year increase in revenue that totaled $1.91 billion. Most of the success can be attributed to the company's Macau and Singapore operations, although Las Vegas seems to be doing marginally better as well.

In March 2009 LVS stock was trading at under $2 a share. Today it closed over $41 a share, and in after hours trading it was as high as $45.

Source: Las Vegas Sands - Press Release.

St. Regis at Palazzo Capped at 5 Floors?

A recent Reuters article announced that the Venetian and Palazzo will join the portfolio of InterContinental Hotels Group. The group is best known for their Holiday Inn and Crowne Plaza brands. By joining forces with InterContinental Venetian and Palazzo will become part of the Priority Club program, which has 52 million members.

While this is a nice development for the Las Vegas Sands properties, there was another item in the article that caught my eye.

It appears that the Sands agreement to build St. Regis-branded condos in front of the Palazzo is close to expiring. Given the state of the Las Vegas condo market it's clear that LVS won't be building any condos if they don't have to. COO Michael Leven revealed that the building might be capped at the current five stories. "We might finish it off there to get rid of the eyesore."

If the building is completed at five stories I wonder what they will use that space for. There is already a Walgreens on the ground level, and five floors probably isn't enough to be a separate hotel tower. Perhaps they will just complete the outside until they figure out what they want to do, similar to the Octavius tower at Caesars.

Story: Reuters.

ESPN Zone Closing

The majority of the ESPN Zone restaurants are closing, including the one in Las Vegas at New York New York.

It will be interesting to see what will now occupy the ESPN Zone space. I think it would be a good opportunity for NYNY to expand their sports book. Lagasse's Stadium over at Palazzo seems to be pretty successful as a restaurant / sports book hybrid, so perhaps they will try something like that. The ESPN Zone space is prime property right on the strip, so there are a ton of options.

Source: WSJ.

Harmon Ave Walgreens Coming to Strip

The 2.16 acre parcel of land on Harmon Ave. south of Planet Hollywood and across from Cosmopolitan and CityCenter is being developed. A 3 story, one hundred thousand square foot retail building will break ground in the next few months. Walgreens will be the "anchor" of the building.

It's definitely nice to see something done with this land. If you have walked past it lately you might have noticed that it is pretty barren and often trash laden. A Walgreens might not be what people expected, but this is a high traffic area, and Walgreens will no doubt do a lot of business. This will be the third Walgreens on the strip. There is one in front of Palazzo and another one just south of this proposed location near MGM Grand.

I always think it's an interesting decision to not include a casino in a new project on the strip. It seems like it would be ideal to develop this land into a small walk in casino similar to that of Casino Royale, O'Sheas or Bill's. You could incorporate a Walgreens into that type of project and still print money from the casino. Obviously there would need to be significantly more investment and planning involved for that type of project though, and perhaps the economy can't handle it yet.

Source: Las Vegas Sun.