Vegas Defies Gravity

An insatiable demand for hotel rooms and condos:

LAS VEGAS — Stephen A. Wynn, the hotel and gambling impresario, still remembers the first time he was asked if he and other developers had lost their minds building so many casino hotels here. It was the mid-1970s, when Las Vegas had about 35,000 rooms.

He was asked that same question in the 1980s, while building the 3,000-room Mirage, and again in the early 1990s. By that time Las Vegas was home to more hotel rooms — 106,000 — than any other city in the country.

And so now, with Las Vegas in the midst of another big building boom, Mr. Wynn only shrugs when people suggest that the nation’s premier gambling center, with 151,000 rooms and counting, simply cannot absorb any more new hotels.

...But even Las Vegas has never witnessed anything quite like what is going on today. “This is the most outrageous, over-the-top expansion” ever, Mr. Wynn said.

Americans — and an increasing number of foreigners — can’t seem to get enough of Las Vegas. The current construction craze is driven by a 95 percent weekend occupancy rate — and rates that approach 100 percent at the city’s newer properties. Last year, even the weekday rate fell just shy of 90 percent, partly because of the city’s success in positioning itself as an attractive convention destination.

Fueling the current boom as well are the enticing riches to be made catering to a new kind of guest: aging boomers entering the empty-nest phase of their free-spending lives.

And contrary to some predictions, the opening of American Indian casinos and other gambling outposts in more than 30 states has not hurt Las Vegas.

Far from it. The smaller, more prosaic gambling halls stretched across the country have actually helped the boom, casino executives say, serving as a kind of a feeder system for Las Vegas as people gain a taste for gambling and then aspire to a touch of the big time. The soaring popularity of poker has also helped drive growth as the game has drawn a younger crowd to the city.

“I suppose one day Las Vegas will reach its limit,” said Anthony Curtis, president of LasVegasAdvisor.com, a local travel site. “But that day is nowhere in sight.”

...Even competitors marvel at the scope of the CityCenter project, which MGM calls the most expensive privately financed project in American history. This minicity bordering the Las Vegas Strip will feature six towering buildings that reach as high as 61 stories. Covering 67 acres, it will include a 4,000-room hotel, a sprawling convention center, a half million square feet of retail space and 2,700 condominium units.

The changing demographics have led the designers of the new Vegas to push a sleek and modern aesthetic, along with amenities like luxurious spas, in place of the gilt and gaudy properties that reigned in the 1980s and 1990s. But their owners’ ambitions are greater than ever.

...Even more than hotel construction, a boom in condominium development has increased the number of construction cranes crowding the skies.

...The Vegas Strip But MGM and other developers see themselves as competing for buyers far beyond the Las Vegas market. “We see these as third homes,” said Alan M. Feldman, a spokesman for MGM.

...In a perverse way, though, the city’s current boom helped developers here avoid the kind of frantic overbuilding that plagues condominium developers and condo owners in cities like Miami and Washington. John Restrepo of the Restrepo Consulting Group, a real estate firm based here, said that a “gold rush fever” had swept through the Las Vegas condo market, with more than 100 luxury condo projects, totaling 72,000 units, announced since 2005.

But escalating land prices and a steep rise in construction costs, Mr. Restrepo said, “caused most of these guys, who were never much more than a Web site and a dream, to fade away.” Today, there are just 22 luxury condo projects, representing 10,000 units, under construction, he said, “and a large portion of those units have been sold.”

...The scale of Las Vegas’ hotel industry and the size of its properties put other cities to shame. Even the massive 2,000-room casino resort Mr. Wynn is building next to Wynn — it would rank as New York’s largest hotel — will not crack Las Vegas’s top 15.

Not to be outdone, Fontainebleau Resorts recently announced plans for a $2.8 billion, 3,900-room resort on the northern end of the Las Vegas Strip. And developer Ian Bruce Eichner has raised $3 billion to build a 3,000-unit condo-hotel, the Cosmopolitan Resort and Casino, on the Strip.

[And there is the likelihood of more large-scale projects on the horizon. Yesterday, Goldman Sachs paid $1.3 billion for the four Nevada casinos owned by Carl C. Icahn’s American Real Estate Partners, including the Stratosphere Las Vegas Hotel and Casino, but also a precious 17 acres of undeveloped land on the Strip.]

Even without the new hotel properties, the 151,000 guest rooms in the extended Las Vegas area, according to Smith Travel Research, a lodging industry data broker, are nearly twice the 80,000 rooms in New York City. Orlando ranks second to Las Vegas with 111,000 rooms.

And yet Las Vegas has more new hotel rooms under construction (11,000) than any other city in the country, as well as more rooms on the drawing boards (35,000).

...Concerns over future limits on water supplies might ultimately slow development here. Eventually, tourists might tire of fighting the daily traffic jams that snarl the Strip and nearby freeways, or grow frustrated negotiating McCarran International Airport, which seems in a perpetual state of crisis.

But those problems have not hampered Las Vegas’s success so far. The city had just under 39 million visitors in 2006, according to the Las Vegas Convention and Visitors Authority — an 86 percent increase over the 21 million visiting the city in 1990.

And in anticipation of handling even larger hordes of tourists, McCarran is in the first year of a five-year, $4 billion makeover. Meanwhile, officials are looking into adding a second airport at Ivanpah Valley, 30 miles from Las Vegas.

“People have been predicting dating back to 1955 that Las Vegas will reach a saturation point,” said David G. Schwartz, author of “Roll the Bones,” a history of gambling, and director of the Center for Gaming Research at the University of Nevada, Las Vegas. “But me, I wouldn’t bet against casino growth.”