Encore Las Vegas Opens Tonight, Economic Downturn or Not

(MoneyWatch)  Encore Las Vegas, Wynn Resorts Ltd.'s latest $2.3 billion development, opens 8 p.m. tonight in one of the biggest economic slumps the Las Vegas Strip has seen. That hasn't stopped chief executive Steve Wynn's enthusiasm for the project, including being featured in its national commercials, sitting atop the resort.

"I've always opened up hotels in boom periods -- it is a fascinating moment to open a hotel in a market that's extremely tough," Wynn told Reuters.

In October, Las Vegas Strip casinos won 26 percent less money than a year earlier, the biggest drop ever. Air passenger traffic was also down 13 percent in October and room prices fell 25 to 35 percent. With Encore opening when gaming profits are down and consumers are staying home, some in the industry are watching the resort's performance with anticipatory schadenfreude. Wynn seems to have taken this into account.

"I don't owe a dime personally and the company's solid as a rock," Wynn, 66, told AFP. "That's why we were just named to the S&P 500. We're not at risk here. We're very lucky."

Even with stock prices halved, Wynn is still doing better than competitors MGM Mirage and Las Vegas Sands Corp. who have halted and shelved projects until they can find/found financing.

Wynn began his work in Las Vegas hotels in the 1960s with the Frontier Hotel. Through decades of investment and acquisition, he created Mirage Resorts which was bought by MGM Grand in 2000. Wynn Las Vegas was opened in 2005.

Although Encore is attached to the Wynn Las Vegas and will share back-of-house operations, it's a different property with 2,034 suites, floor-to-ceiling windows, five restaurants, shops, a theater and a Victor Drai nightclub.

"We weren't going to replicate Wynn [Las Vegas,] which was designed to have its own voice and interior design," Wynn told the Las Vegas Review-Journal. "We were going up-market, but we wanted more intimacy. The question was how to make a 2,000-room hotel look and feel like a boutique."

Visitors will decide tonight whether Wynn succeeded in creating an "over-the-top" St. Tropez in the hotel and if it will be enough to keep them coming back. Perhaps they will decide a dinner at Sinatra's, an Italian restaurant blessed by the Sinatra family and featuring Old Blue Eyes memorabilia, adds to the intimate boutique hotel experience.

Despite all the hype, Wynn's opening is a milestone for both its CEO and the company. Steve Wynn has shown he's not afraid to take risks, has enough cash to weather the worst Las Vegas has to give and maintain the high standards he has created.

And Wynn is a genius with the details. How do you have a hotel opening full of guests? By dropping room rates to $149 for a night at the Wynn and $179 at Encore, with a $50 dining certificate thrown in as added incentive. Wynn said in a recent interview with the Las Vegas Sun that when he cut rates, the hotels received more than 10,000 reservations in 24 hours.

David Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas, told the Las Vegas Review-Journal that Wynn's opening will rise to a different level. "He's been doing it more and doing it better than anyone else in the market."