Business

Las Vegas bets on luxury

LAS VEGAS – In the rarified world of luxury hotels, it’s not only the thread count of the sheets or the sheen of the marble but the sincerity of the staff that separates the best from the rest.

Casino developer Steve Wynn recalls getting the bad news that his Bellagio resort would be getting four stars instead of five from Mobil inspectors more than a year after its opening in 1998.

“It was an unfortunate exchange at the front desk with the anonymous shopper,” said Wynn of the property now owned by MGM Mirage Inc. “And room service trays, after people had eaten breakfast, were left outside the door in the hallway.”

While such minor annoyances might have been acceptable in the land of free drinks, bargain buffets and sequined showgirls, such service no longer passes muster in upscale Sin City.

As budget options like the Stardust and New Frontier have been imploded to make way for more expensive, classier resorts, a battle is being waged for the tourist dollars of the upper crust.

Details such as pronouncing a hotel guest’s name correctly and delivering room service within five minutes of the appointed time are crucial to attaining the top ranks from such agencies as Mobil, AAA and Michelin.

Higher rankings mean higher room rates for operators. Likewise, restaurateurs covet the rankings, which bring headlines and crowds of big-spending customers.

In the case of the Venetian, owner Las Vegas Sands Corp. was able to raise the average daily room rate in the first three quarters of 2007 by $22 from a year earlier – to $259 – after spending $100 million on renovations to achieve five-diamond status from AAA.

For the 4,000-room hotel, which opened in 1999, that means millions of dollars more to the bottom line, said senior vice president Paul Pusateri, who spearheaded the drive to improve its four-star rating.

The property doubled the number of pillows on each bed to four, increased the thread count to 260 on its sheets in standard rooms and installed flat panel TVs and automatic drapes.

It also began running secret shoppers through its property at least every two weeks, testing employees on hundreds of AAA and Mobil rating criteria, such as making eye contact, dealing with communication breakdowns and responding to requests quickly.

When service slips, employees are notified immediately.

“It is as simple as one team member not being able to pronounce the name of the shopper and therefore not using it, for example,” hotel operations vice president Kirsten Dimond said.

At the Wynn Las Vegas, whose Tower Suites hotel-within-a-hotel was awarded Las Vegas’ only Mobil five star resort rating last year, average room rates were a market-leading $282.

“Rich people know what the best hotel is in every city of the world,” Wynn said. “Mobil is a confirmation of that.”

Whatever the standard, more Las Vegas resort developers are getting in on the upscale act with billion-dollar developments.

Las Vegas Sands’ $2.6 billion Palazzo is set to open its doors by the end of the year, while Wynn’s $2.2 billion Encore property opens in early 2009. The $2.8 billion Fontainebleau, along with MGM Mirage’s $7.8 billion CityCenter are to open later that year. Boyd Gaming Corp.’s $4.4 billion complex, Echelon, is scheduled to open in 2010 and developer Elad IDB plans to spend more than $5 billion to open The Plaza hotel and casino on the Strip in 2011.

When Wynn won his coveted Mobil five stars last year, he said he spent millions advertising it, not only to flaunt the distinction, but to egg on his competitors.

“Since I made a fuss about our five stars, that will inspire other people in town to be jealous and to upgrade,” Wynn said. “The more that Las Vegas is perceived to be a really high-class destination, the bigger the market gets. That’s a good thing for all of us.”



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