Caesars empire goes modern with latest hotel expansion

By Liz Benston (contact)

Thursday, Oct. 23, 2008 | 2 a.m.

Steve Marcus

The $1 billion, 665-room Octavius Tower at Caesars Palace was topped off this week. When it opens next summer, it will have 665 modern hotel rooms. After the expansion, Caesars Palace will have more than 4,000 hotel rooms and 300,000 square feet of convention space.

These days, Caesars Palace is looking a lot less Roman Empire and more Empire State.

When it opens its sixth hotel tower, Octavius, next summer the flagship property of the world’s largest casino company will be another step closer to the look and feel of luxury hotels found in other major cities.

At a time when casinos are forced to work harder to attract business, Caesars Palace is trying its best to bridge old and new Vegas by luring new, more discriminating tourists and younger hipsters as well as regulars who appreciate the property’s legacy.

The under-construction tower features the same white-walled Romanesque look of the adjacent Augustus tower and, like Augustus, sits apart from the casino and across the themed pool and garden complex known as the Garden of the Gods. Roman statues abound, and guests can grab snacks at a bar appropriately named Snackus Maximus.

Yet inside, the tower’s 665 rooms will feature a bold, modern look by Wilson Associates, which created the muted, urbane look of the Augustus rooms, with nary a Roman column or statue in sight. That firm has no kitsch on its resume, which includes suites for the Palms and the Mansion, MGM Grand’s high-roller oasis.

The sophisticated appearance has spread to other areas at Caesars, which has recently remodeled rooms in its Palace and Forum towers. Until a few months ago, the Forum Tower featured mirrors above beds and couples tubs a carpeted step away. The 21st century makeover includes Anichini linens, iPod docking stations, wireless Internet and dual rain showerheads.

General Manager John Unwin can take some of the credit. Before joining Caesars in 2004, Unwin worked for boutique hotelier Ian Schrager, the New Yorker who created the uber-hip Mondrian and Delano hotels, among others.

The $1 billion hotel addition set to open next year will include an outdoor cafe, an expanded wedding venue and 240,000 square feet of convention space. All told, the finished property will have 300,000 square feet of convention space and more than 4,000 rooms.

A drawback of Caesars, in the eyes of some experts, was that it grew over the years by adding new buildings. Executives say the property has made the best of a tricky situation. The Forum tower couldn’t be imploded, Unwin said, because the implosion would have taken down neighboring towers. So the building was gutted and rebuilt from the inside.

Like a cluster of smaller hotels on one site, each tower has its own look, attracting its own set of fans.

Critics also say Caesars can’t regain the luster lost to upscale competitors by adding another hotel tower to the 42-year-old resort’s cobbled-together layout.

Those critics should consider a few recent developments.

Executives say the property has been doing better than simply keeping pace with the competition, despite the downturn.

During these lean months, Caesars has grabbed gambling market share from competitors on the Strip, in part because of the Total Rewards gambler loyalty program of parent company Harrah’s Entertainment, Caesars President Gary Selesner said.

Caesars Palace is the most requested destination for Total Rewards members redeeming points they’ve accumulated while gambling at other Harrah’s properties, typically outside of Las Vegas. Harrah’s database of 10 million active Total Rewards gamblers remains the envy of the casino industry.

That has propped up gambling revenue at Caesars, which is performing better than the declining Strip averages published by the state, he said.

More surprising is the property’s convention business, which is tracking higher than any year in Caesars history.

Most casinos are reporting declines in convention business as groups cancel or fewer attend. Caesars is also seeing a decline in convention attendance, but more money is coming in the door from an increase in events and bookings for future years, executives say.

The property’s convention center is too small to host the giant trade shows held at the Las Vegas Convention Center, Sands Expo Center or Mandalay Bay Convention Center. Caesars attracts smaller groups, of fewer than 2,000 people, for self-contained events in which attendees spend money at the hotel.

“Our sweet spot is about 800 rooms per night,” Unwin said.

With the American consumer under pressure, casino properties are trying to boost their marketing efforts to foreign tourists, including Europeans and Asians. Although Harrah’s lacks a key weapon in this effort — competitors MGM Mirage, Wynn Resorts and Las Vegas Sands have casinos in Macau, China — Caesars executives also are pounding the pavement in China for customers.

By the end of this year, the property will add two restaurants offering authentic Chinese cuisine, a noodle bar named Beijing Noodle No. 9 and Sea Harbor, which is part of a chain of restaurants in China.

These venues are part of a seemingly constant parade of new attractions at the property over the past several years.

“This is a difficult economy,” Selesner said. “But we’re building this for the future. This building is going to be around another 30 to 50 years.”