Second tower set for Bellagio

Tuesday, Aug. 27, 2002 | 11:10 a.m.

MGM MIRAGE said today it will follow through on a much-anticipated plan to add a second hotel tower to its Bellagio casino resort on the Las Vegas Strip.

The "spa tower" will add 925 suites, giving the property 3,930 rooms and suites.

The tower, like other luxury attractions in recent years, may attract more new customers who want to escape the transient crowds that are typically drawn to Las Vegas casinos, one travel expert said.

The Four Seasons Hotel, which is part of the Mandalay Bay resort, has successfully marketed itself as an "oasis of tranquility" on the Strip, said Priscilla Alexander, president of Protravel International, a nationwide network of upscale travel agencies based in New York City.

"It's a strong marketing idea right now," Alexander said.

Work on the $375 million expansion will begin in mid-2003 and is expected to be complete by December 2004, the company said. The project also will include an expansion of the Bellagio spa and salon, 60,000 square feet of meeting space, 5,000 square feet of retail and a restaurant.

Plans for a second tower at Bellagio have been on hold since Kirk Kerkorian's MGM Grand Inc. proposed to buy Bellagio creator Steve Wynn's Mirage Resorts Inc. in 2000. That merger created what is now MGM MIRAGE.

The Bellagio, the most expensive property for MGM MIRAGE in Las Vegas and the company's largest cash flow generator, fetches some of the highest hotel rates on the Strip.

The Bellagio, with its 90-plus percent occupancy rate and high room rates, presents "the perfect expansion opportunity" for MGM MIRAGE, McDonald Investments casino industry analyst Dennis Forst said.

"Any time a company adds rooms to an existing ... space is the best use of capital," Forst said.

The tower will be located south of Bellagio's main pool and courtyard and have direct access to its spa and salon. Guests will pass through a classical garden, enter into a conservatory and follow a 50-foot glass corridor to their spa tower rooms, accessed by private elevators.

The rooms will be wired with fiber optic cables for high speed Internet access.

"This project adds to our exciting world of firsts," Mirage Resorts President and Chief Executive Officer Robert Baldwin said in a statement. "Guests will enjoy an unrivaled level of privacy, service and business connectivity right in the heart of the world's greatest playground."

The Bellagio is competing against other upscale projects aimed at capturing a growing market of convention-goers, spa visitors and other customers seeking world class accommodations.

The Venetian hotel-casino, which offers some of the most expensive rooms on the Strip, has begun construction on a 1,000-room hotel tower atop its parking garage. The expansion also includes 150,000 square feet of meeting and conference space.

And Mandalay Bay is jumping into the convention business by constructing a 1.8 million square foot convention center along with a 1,125-room hotel tower. Both hotel towers feature suites that are larger than typical hotel rooms and preferred by business customers, who often spend multiple days in town and combine meetings with social activities.