Caesars upscale tower premieres

By Liz Benston

Friday, Aug. 12, 2005 | 11 a.m.

For nearly five years, Caesars Palace has operated amid construction walls inside and out as projects aimed at transforming the tired theme property into a premier, upscale resort took shape.

At 5 a.m. this morning, the last of those walls came down as Harrah's Entertainment Inc. opened the Palace's 949-room Augustus hotel tower at the corner of Flamingo Road and Las Vegas Boulevard.

The tower, which also includes a 24-hour cafe, two retail stores, a VIP lounge and three wedding chapels to replace a single indoor chapel, caps off a process that began in 2003 when previous owner Caesars Entertainment opened the 4,100-seat Colosseum Theater.

Since then the property has added a new convention area, two celebrity-chef restaurants and additional casino space with a bar, retail store and nightclub. A poker room and the addition of other table games are under way in the casino while a hotel spa and Guy Savoy restaurant -- named for a three-star Michelin chef with a namesake eatery in Paris -- will open several months from now in the Augustus tower.

Harrah's has hired 600 people to staff the new tower.

The rooms are designed to compete with the best suites in Las Vegas rather than just the best Caesars has to offer. It's a bold step for a property whose stature has been undermined by newer resorts such as Bellagio, Venetian, and most recently, Wynn Las Vegas.

"I think these will compete very well with the new wave of hotel rooms that have come to Las Vegas," said Gary Selesner, who was recently appointed president of Caesars Palace. "I think the size and spaciousness are very competitive and yet I think that the new, striking, contemporary decor -- the use of a designer ... with a new take on what it is to be Caesars Palace -- gives us a very competitive room product."

The $289 million tower gives Caesars about 40 percent more rooms -- a long-needed expansion given Las Vegas' rapid tourism growth in recent years and competition from major resorts with more rooms to offer, Caesars executives have said.

The upgrade comes amid continued speculation that Harrah's, which purchased Caesars Entertainment in June, will eventually scale back the high-roller business at its flagship property in favor of middle-income business for which the company is known.

Rather than maintaining Caesars' high-roller business, Selesner said the resort's high-end customer base has grown under Harrah's. The company has already begun the process of upgrading existing high-roller suites across the property. Rooms in the Palace Tower, the most recent tower to open before Augustus, also will be upgraded to match the newest basic suites over the next several months, Selesner said.

Rooms in the new tower consist of 874 suites from 650 square feet to 760 square feet, 23 suites at 1,060 square feet, six suites at 1,470 square feet and 23 suites at 2,470 square feet.

The rooms have an ultramodern look and feature dark woods, cream-colored carpets and eclectic art. There are a few nods to Caesars' Roman-themed past, including silken robes embroidered with busts of Caesar and framed art of Roman statues. All the suites feature plasma screen televisions in bathrooms, bedrooms and sitting rooms. Voice-over-Internet service is available for worldwide phone calls as well as high-speed Internet service.

Some of the largest suites overlook the recently built Roman Plaza and outdoor ampitheater, where Caesars has held boxing matches and other sporting events. Others overlook the Garden of the Gods, the name for Caesars' four Roman-style pools.

The Augustus Tower lobby will become the resort's main entrance, replacing a small, temporary lobby that has served to check in hordes of visitors since July 2004 while the tower was under construction.

The new lobby just about doubles the resort's original entrance area and features giant mosaics on the walls and an oversize marble fountain in the center.

The lobby, featuring a VIP valet entrance from Flamingo Road, is designed to create a "sense of arrival" for guests, Selesner said. With the 24-hour cafe and retail store opening into the lobby, the space also was intended to serve as a place for guests to congregate rather than just check in, Caesars spokeswoman Debbie Munch said.

Stock analyst Matthew Jacob of Majestic Research said the tower should drive both gambling and hotel revenue because visitors "often gamble where they are staying."

In the year following Caesars' previous hotel tower expansion in 1997, gambling volume grew 2 percent from the previous year, Jacob said in a research note to investors last month. Still, the property's share of the Strip gaming market fell after the December 1998 opening of Bellagio, the most expensive and luxurious resort in Las Vegas at the time.