LAS VEGAS – Wynn Resorts Ltd. CEO Steve Wynn says his swanky $2.3 billion Encore casino — which he opened Monday amid a market that's battering casino, travel and other consumer companies — is about perfecting the basics.
"Better service, nicer rooms, better lighting," Wynn told The Associated Press. "Themes that are corny get old quickly, but real and wonderful environments with great service are timeless."
Even if visitors think the Encore delivers on that promise, however, Wynn will have to keep prices low to keep people booking its 2,034 suites. That's because, while Wynn is doing well, Las Vegas is not.
MGM Mirage Inc., which owns 10 casinos on the Las Vegas Strip, has laid off about 3,200 workers here since October 2007. Harrah's Entertainment has cut 1,800 workers since January. And Deutsche Bank analyst Bill Lerner told investors in a note on Monday that he is tracking more delayed projects in Las Vegas than ever before.
The 5,000 new jobs at the resort, while 300 short of the number announced in July, were eagerly awaited, even though locals have seen many swings in their city's economy before.
Some 100,000 people applied for the positions, company officials have said.
Hit hard by foreclosures and the mortgage crisis, Las Vegas reported an unemployment rate of 7.9 percent in November, up from 7.6 percent in October and above the November national average of 6.7 percent.
And Encore's opening is likely to be the only bright spot for a while.
Directly across the street is the former site of New Frontier hotel-casino, an empty lot where a stalled project modeled after The Plaza hotel in New York has yet to rise. Next to that sits Boyd Gaming Corp.'s stalled $4.8 billion Echelon project.
But Encore's opening is sending unwelcome ripples through the gambling market in Las Vegas. Wynn, known for shaking up Sin City one casino at a time, is doing it this time by lowering rates so he can keep visitors coming in the short term.
He said he's booked 60,000 room-nights since dropping rates last week at Encore and Wynn Las Vegas next door. Those guests, most of whom signed up for visits next month, would have probably gone to properties down the street instead, he said.
"I want Encore filled and Wynn, and I'm sorry to everybody," Wynn said.
He said he would raise rates as the rooms fill, to get as close to 95 percent as possible. Five percent of rooms, he said, are usually saved for high rollers.
Weeknights, a standard 700-square-foot suite at Encore is going for $159 in January, according to Encore's Web site, with higher prices on weekends. That's down from rates easily $200 or more.
Natural light flows onto the 72,000-square-foot casino floor from a large glass-covered atrium and windows overlooking the pool. One restaurant's wall is decorated with a large Asian dragon made from 90,000 Swarovski crystals, while another displays Frank Sinatra's 1953 Oscar at its entrance. The nightclub, XS, opens with large glass doors to an outdoor pool with its own bar, blackjack tables and cabanas.
But all year, Vegas visitors have been spending less money, no matter how tempting the offerings. Analysts who study the industry say the gambling market may not have hit bottom yet.
"It has taken time for the full impact of the financial crisis to become apparent due to pre-planned travel," Celeste Brown of Morgan Stanley Research wrote in a note Friday to investors.
Casinos are typically more willing to sacrifice room rates than non-gambling hotels in order to get people in the door, figuring they'll still make money from customers gambling, eating and entertaining themselves inside.
But Wynn says the company's room rates are a big part of his profits, and lowering them hurts. Brown said the rate cuts could pressure other casinos to follow suit and further depress the whole market's profitability. Another risk is that customers who got a good bargain once may hold out for a good deal even after the market improves.
Wynn's fortunes are strongly tied to Las Vegas, despite its investment in a $700 million Encore now being built in the Chinese gambling enclave of Macau, analyst Robert LaFleur wrote in a recent note to investors.