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Hard Rock Las Vegas Expansion Benefits From Economic Slowdown

Monday, February 23, 2009

LAS VEGAS, Nevada -- The following is not a misprint: A local hotel-casino construction project has benefited from the economic slowdown and plans to open some components ahead of schedule this year.

The
  Hard Rock Hotel's $760 million expansion is capitalizing on the slowing construction industry by hiring some of the best construction workers and tradesmen others have let go.

"There are so few projects that are working right now, there are so many good construction workers and tradesmen out in the field," said Yale Rowe, general manager of operations for the Hard Rock Hotel. "M.J. Dean has been remarkable at putting the best of them on the job. They're flying."

Rowe said the north hotel tower, the 490-room Paradise Tower, has begun taking reservations and will open Aug. 1, nearly two months ahead of schedule.

The 375-room all-suite tower along Harmon Avenue is 30 days ahead of schedule with plans to open in December, along with a new spa and a casino expansion.

A pool expansion will be completed in December but won't open until the spring of 2010.

Las Vegas-based M.J. Dean Construction signed an agreement in February 2008 to be the general contractor on the niche property's expansion.

M.J. Dean's experience includes an earlier Hard Rock Hotel expansion, and work on the Monte Carlo, Mandalay Bay and Panorama Towers. The construction company, founded in 1989, most recently was general contractor on the $250 million Eastside Cannery, which opened in August.

According to Brian Feigenbaum, the executive vice president of development of the Hard Rock Hotel, M.J. Dean said it has not had so many of its top people on one project in a long time, something that was made possible by the slowing construction industry.

Nearly 1,600 construction workers are on the site, but Feigenbaum said the project is not being rushed to be ready for the April opening of the new Joint concert venue and 60,000 square feet of new convention and meeting space.

While the Hard Rock has not suspended any of its renovations like Caesars Palace did with its Octavius Tower, Rowe did admit to having some concerns about adding to the 646 rooms already available at the property.

"I'm kind of torn," Rowe said. "Part of me says I want to give the economy as much time as possible to rebound before I start introducing new rooms."

Rowe said the fourth quarter was the "roughest quarter" of the year for the Hard Rock, although he said the property's vacancy and room rates are looking good considering the economy.

The hotel, which had a 92.4 percent occupancy rate during the third quarter, was offering rooms as low as $99 last night and as high as $299 tonight.

MGM Grand was offering rooms for $139 per night this weekend and Planet Hollywood Resort's room ranged between $169 to $299 per night this weekend, a check of their Web sites show.

The Hard Rock Hotel, which will release year-end earnings in March, saw revenues drop 14.1 percent in the third quarter. The decline, however, was partly blamed on construction disruptions, including building the new concert venue along Paradise Road.

A 1,400-slot parking garage also opens in April along Harmon Avenue.

The expansion will add nearly 1,500 new jobs when completed, according to Rowe.

Hiring of 150 workers for The Joint and meeting space will begin soon, and job applications for the Paradise Tower, which will add 300 jobs, will begin in June.

Also, 250 seasonal workers will be added for the pool season, which includes the relaunch of Rehab pool party April 19.

The Hard Rock Hotel opened in March 1995 with a 340-room hotel and 28,000 square feet of casino space.

The project was a partnership between founder Peter Morton and Reno-based Harveys Casino Resorts. Morton bought Harveys' 40 percent interest two years later. Morton later added 300 rooms.

Morton sold the property, which cost $80 million to build, to New York-based Morgans Hotel Group Co. for $770 million in February 2007.

Morgans now owns 14.1 percent of the property with private-equity firm DLJ Merchant Banking Partners controlling the rest.

 

Hard Rock Hotel & Casino
4455 Paradise Road
Las Vegas, NV 89109
Phone: (702) 693-5000
Toll Free Phone: (800) HRD ROCK
Fax: (702) 693-5010
Email: info@hrhvegas.com
Website: www.hardrockhotel.com
The Hard Rock Hotel & Casino is a popular destination entertainment resort that was built in 1995. It has over 600 rooms and features over 650 slots and 90 table games. In addition to the hotel and casino, the property has a beach club with a swimming pool that was selected by the Travel Channel as one of the top 10 pools in the world, the Body English nightclub, "The Joint" concert hall, five restaurants, including the world famous Nobu, and an 8,000-square-foot spa and fitness center.
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