When the Bellagio and Venetian gambled Vegas’s future

When the Bellagio and Venetian gambled Vegas’s future

The Bellagio casino and hotel, Las Vegas
Las Vegas is currently in the middle of an unprecedented $30 billion building boom, with another $50 billion set to follow that, with few analysts worrying over whether Las Vegas can support the tens of thousands of new hotel rooms that are being created.

But it wasn’t always like that. Ten years ago, the Venetian and the Bellagio were both under construction as their owners, Sheldon Adelson and Steve Wynn, went head to head in their own personal mini building-boom. Back then, though, analysts were predicting a bloodbath, as the thought of Vegas supporting just two more mega-casinos seemed destined to render one of the casino billionaires bankrupt.

Read on for more details of the Bellagio vs the Venetian in the first of our new History of Las Vegas series.

In 1997, Las Vegas was a very different place. For many years, no new hotels had been built on the strip. The 1990s changed all that, with first the Mirage, and then a succession of themed hotels, starting with the Excalibur and Luxor, adding to an explosion of new projects that helped create the Vegas of today.

By 1997, though, many analysts thought that Las Vegas had reached saturation point, and that any more new hotels would lead to thousands of empty rooms.

It was this point that Steve Wynn decided to build the Belalgio, while his arch-rival Sheldon Adelson thought the Venetian would be a good idea.

Wynn vs Adelson – round 1

By 1997, Steve Wynn had seen his $624 million Mirage hotel turn from a huge gamble into a roaring success. Featuring 3,000 rooms, it had paid for itself twice over, and helped Wynn not only amass a fortune ready for his next big venture, but also given him the credibility he needed to gain financial backers for his next grand project – the Bellagio.

In contrast, Adelson was losing a fortune on the old Sands hotel that he’d bought in 1988 for $128 million (today, $128 million would buy you just 5 acres of land on the strip!). In five years, it lost money, and Adelson had tried four different management teams to turn it around, all without success. The only hope he had was ot blow it up and build another hotel in its place – the Venetian.

The Belalgio vs the Venetian

The Venenetian hotel, Las Vegas
And so it was that two of the Strip’s now-iconic hotels were born. The Bellagio would cost Wynn $1.5 billion, while the Venetian would cost Adelson $1.3 billion. Analysts thought that both were a gamble too far, that Las Vegas simply could not support the 7,000 extra room these two mega-hotels would add to the Strip.

Erick Lucera, an analyst at Boston-based Independence Investment Associates, claimed that “Nineteen ninety-nine [the year that the two hotels would open] is shaping up to be a bloodbath,” while Forbes went on to ask:

“Whats going on here? Do these guys really believe that the gambling market is infinite? Las Vegas is already saturated with rooms — 104,000 at present count — with 12,800 more hotel rooms in the building stage.”

Of course, both hotels went on to become spectacular successes, and were swiftly followed by other multi-billion dollar projects, such as Paris, Mandalay Bay and the Aladdin.

1997 – 2007: compare and contrast

Both the Bellagio and the Venetian were seen as huge gambles back when Las Vegas was much smaller than it is now. Today, we have $30 billion dollars of new hotels being built, and yet no-one is questioning whether the Strip can support such extra capacity.

But it’s not just the extra hotel rooms that are being built. Millions of square feet of extra retail space and convention space are also being built, and still no-one’s questioning whether Las Vegas can support this extra capacity.

Times have certainly changed, and it’s almost comical to look back and see the concerns people had over the building of what turned out to be two runaway successes that helped turned Las Vegas into what it is today.

Let’s just hope we’ll be saying the same thing in another ten years’ time, when $60 billion of new hotels stand proud, each hoping that it’s not a gamble too far.

[Source: Forbes]

No reviews yet.

Leave a Reply