Embassy Suites hopes Las Vegas project will pay off

Friday, Sept. 12, 1997 | 11:02 a.m.

Developers of a new nongaming hotel are hoping its proximity to the successful Hard Rock hotel-casino will spell success for the 220-suite, $22 million project.

Construction is expected to begin by the end of the year on the Embassy Suites, to be located between Paradise Road and Swenson Street, a few blocks north of Harmon Avenue.

Demolition is under way on an old apartment complex to make room for the hotel.

The Dallas-based Remington Development Corp. is managing partner of an investment group that is building several Embassy Suites properties around the country.

Remington buys franchises from different hotel corporations, paying a royalty for the name brand and reservation system access. The company enjoys the benefit of national marketing campaigns.

The property will be the first Embassy Suites franchise in Southern Nevada and one of the first built by the recently expanded Promus Hotel Corp.

Promus, which has 1,136 hotels worldwide, merged with the Doubletree Corp. to form the nation's third-largest chain behind Holiday Inn and Marriott. The joined companies are expected to have annual revenues of $5 billion. Promus spun off its casino interests and operate them under the Harrah's name in 1995.

"We looked at many tracts of land before deciding on this one because of its proximity to the high-end Hard Rock casino and to the airport," said Archie Bennett Jr., president of Remington Development.

Bennett said Embassy properties traditionally have competed better in areas away from convention centers. He said the property acquisition, which closed in July, gives the company a site that is centrally located between the Las Vegas Convention Center, the Strip and McCarran International Airport, which Embassy identified as three leading traffic generators.

The Las Vegas property initially will have 220 suites, but the building is being structurally reinforced to accommodate 300. Bennett said additional floors would be added when the building is expanded.

The hotel also will include about 10,000 square feet of meeting space with a restaurant, bar, exercise room and a gift shop. It also will have a 10,000-square-foot atrium and a 20,000-square-foot landscaped pool and cabana area, Bennett said.

Financing has been secured through Nomura Asset Capital Corp. and the architect for the project is Humphreys & Associates of Dallas, which has designed office buildings and apartment properties in Las Vegas.

"When we selected the site, we considered the three major traffic generators, but we also wanted a place where guests could get in and out of town without getting tied up in traffic," said Bennett, who said Embassy fills a luxury hotel niche that doesn't exist in the immediate vicinity.

A night at most Embassy properties nationwide runs $110 and includes a free breakfast and special cocktail hour deals built into the rate. The company's national average occupancy rate is 75 percent -- low by Las Vegas standards, but high within the industry.

Jason Ader, who analyzes the gaming and lodging industries for Bear Stearns & Co. Inc. in New York, gives a neutral rating to Promus as an investment because the company is already in an upswing. In a research report on the company, Ader said Embassy is a well-regarded brand that outperforms rivals. Promus has more than doubled the number of hotels in its portfolio since 1991.

Those strengths, Ader said, are mitigated by the industry's vulnerability to economic downturn and the highly competitive nature of the lodging industry.

Although the luxury niche may not be covered, several properties, some in the all-suite format, are springing up around Paradise and Flamingo roads. Within a mile of the Embassy property are the Crowne Plaza, La Quinta and Ramada Vacation Suites and an AmeriSuites property also is under construction.