Caesars in Vegas betting on non-gaming entertainment attraction

LAS VEGAS - In this town, where "wow" is a prerequisite for anything new, Caesars Entertainment Inc., the company behind the $550 million Linq retail/dining/entertainment venue being built at the heart of the Strip, boasts that it will be the next must-see attraction, luring gamblers and non-gamblers alike.

Caesars Entertainment, of course, also owns Bally's, Showboat, Harrah's Resort and Caesars in Atlantic City, as well as Harrah's Philadelphia Casino and Racetrack in Chester.

And at an event on the terrace at Pure nightclub at Caesars Palace announcing the project's first tenants, Gary Loveman, Caesars Entertainment chairman and CEO, said the Linq is just the type of non-gaming attraction that Atlantic City is focusing on.

"Something of this general sort, I think, could work in Atlantic City as we try to widen the attractions in the city," he said.

The centerpiece of the Vegas development is the High Roller, being billed as one of the world's tallest Ferris wheels. True to its name, at 550 feet it will soar higher than the Singapore Flyer and be 107 feet taller than the London Eye, and will feature 28 enclosed observation cabins that will hold up to 40 passengers each.

There will be nowhere to gamble at the Linq, reflecting what the Strip will see more of, industry observers say.

"We're standing here, overlooking the intersection of Flamingo and Las Vegas Boulevards, which is at the heart of everyone's visit to the Strip, whether you stay with us or not," Loveman said. "What we had hoped to do here is to create a place where everyone in Vegas would have a reason to come and gather, to meet among friends or business associates, and to introduce an experience that was not just gaming."

The three-story complex is called Linq because, when it is completed next year, it will link three Caesars properties: the Flamingo, the Imperial Palace (soon to be renamed the Quad), and Harrah's.

"We recognized that we had the capacity to cater to customers that were visiting our competitors to the north and to the south, and to create a very special experience here at the center of the Las Vegas Strip," Loveman said.

"In the post-2008 period, we recognized that we did not necessarily need more hotel rooms and more casino gaming space. Instead, we needed a 24-hour-a-day, seven-day-a week attraction that would cater and be accessible to a much wider audience and bring people together here to gather. It would be the place that on every visit to Vegas, you would have to come here at least once."

That kind of thing also would give a lift to the five-year, $30 million-a-year effort by the Atlantic City Alliance to tout non-gaming attractions and boost tourism.

Atlantic City "just needs to replace a big element of its business that we've lost with the arrival of casinos in Pennsylvania and Maryland," Loveman said. "And I do think conventions and meetings have to play a role.

"The new nightlife attractions ... and some of the new resort amenities that have come in are helpful, but the one big missing element is conventions and meetings to create demand for our rooms between Sunday and Thursday, and that Atlantic City still needs to address."

Last year, Atlantic City had 28.5 million visitors (day trip and overnight combined), according to the resort's Convention & Visitors Authority.

Convention room nights in 2011 totaled 300,000, according to the New Jersey Division of Gaming and Enforcement, with 348,000 projected by the end of 2012.

Michael Reynolds, senior director of national sales and convention development for the Atlantic City Convention and Visitors Authority, said Wednesday that the agency, which is merging with the Casino Reinvestment Development Authority under a new state-run tourism district, plans to attract new conventions and meetings by participating in more trade shows and improving customer service.

Last year, Las Vegas had just under 39 million total visitors. Of those, 4.9 million were convention delegates, according to the Convention and Visitors Authority here. Business travelers represented about 12.5 percent of Vegas' total visitors in 2011.

With 150,161 total rooms, citywide occupancy was 83.8 percent last year. Midweek occupancy was 80.7 percent, compared with 90.9 percent weekend occupancy, according to the authority.

Non-gaming projects like the Linq, add-ons to existing casinos, "represent lower risk," Rob Heller, managing director and head of gaming and leisure at UBS Investment Bank, said during a panel on casino financing at this week's Global Gaming Expo here.

"There is no way to drive gaming [revenue] right now," Heller said. "The only way to drive growth is through retail and entertainment, and you don't need new rooms here."