Boyd Slates 1 Million Sq. Ft. for Vegas

Las Vegas—Move over Sands and MGM Mirage, there's a new kid in convention town.

The paint was hardly dry on Boyd Gaming's new South Coast Hotel & Casino in Las Vegas when the company unveiled plans in early January to add another massive hotel-casino-convention complex to the Las Vegas Strip.

The $4 billion Echelon Place will combine four hotels, containing a total of 5,300 rooms and suites, with an exhibition center with more than 1 million square feet of meeting and exhibit space. Boyd officials project a 2007 groundbreaking and a 2010 opening.

Echelon Place is to be erected on the site of the Stardust Resort & Casino, slated for demolition early next year. The 63-acre plot is on the west side of the central Las Vegas Strip, between Desert Inn Road and Sahara Avenue — one city block away from the Las Vegas Convention Center.

Boyd is developing the property with two partners: Shangri-La Hotels and Resorts, an Asia Pacific luxury hotel group that has also recently announced projects in Chicago and Miami; and the Morgans Hotel Group, which has nine boutique properties in the United States and the United Kingdom.

Boyd will own and manage Echelon Place's anchor, the $2.9 billion Echelon Resort with 3,300 rooms. Boyd will own, and Shangri-La will manage, the 400-room upscale Shangri-La Hotel Las Vegas. A 50-50 joint venture between Boyd and Morgans will produce the 600-room Delano Hotel Las Vegas and the 1,000-room Mondrian Hotel Las Vegas, versions of existing Morgans properties in the South Beach section of Miami Beach, and West Hollywood, Calif., respectively.

Boyd currently envisions the Las Vegas ExpoCenter at Echelon Place as a three-level convention center with 650,000 sq. ft. of exhibit and function space on the first two floors and 175,000 sq. ft. of meeting space on the top floor. Another 175,000 sq. ft. of meeting space is slated for the Echelon Resort, 15,000 sq. ft. for the Shangri-La and 60,000 sq. ft. for the Mondrian, bringing the total meeting space to 425,000 sq. ft.

According to Tradeshow Week research, Echelon Place (as planned) would take the No. 2 spot on the list of the country's largest hotel exhibit halls, following Mandalay Bay Convention Center with 934,731 sq. ft. of exhibit space and preceding Gaylord Entertainment's two 400,000 sq. ft. facilities in Kissimmee, Fla., and Grapevine, Texas.

Echelon Place joins Boyd's latest Las Vegas property, the South Coast Hotel & Casino on the far south end of the Strip, beyond Mandalay Bay. It includes the South Coast Event Center, with 130,000 sq. ft. of meeting and exhibit space.

The question is: Can the market — both local and national — bear the addition of another privately managed mega-facility in Las Vegas?

"Absolutely," said Rob Stillwell, Boyd's vice president of corporate communications. The company's 40-slide overview of the Echelon project cited data from the Las Vegas Convention & Visitors Authority, the Brookings Institution, the Center for Exhibition Industry Research and TSW to make the point that "Las Vegas is the leading U.S. convention destination; evidence suggests it will capture more share in the future." Stillwell said the company did its own research as well.

Chris Meyer, senior director of convention center sales for the LVCVA, said, "There are approximately 40,000 new hotel rooms slated to be added to the city's inventory by the end of 2009, and meeting and convention space is an important tool in attracting more visitors to the destination — especially during midweek."

Rob Canton, PricewaterhouseCoopers convention and tourism services researcher, noted a rebound in overall demand for exhibition space and occupancy rates at U.S. convention centers. However, he added, "the future competitive supply of space in Las Vegas will pose a challenge both to any new and existing centers in that city."

Canton doesn't expect the large amounts of new space being built in Las Vegas to take market share away from other cities. Rather, projects like the Echelon, the Sands' Palazzo (slated to add 450,000 sq. ft. of convention space in '07) and the W Las Vegas Hotel, Casino and Residences (300,000 sq. ft. in '08) will increase competition within the city, he believes.

Groups that "choose to bring their event to the new ExpoCenter would have probably chosen another venue in Las Vegas anyway," said Canton. "While the ExpoCenter will likely be a highly competitive facility, I'm not sure that Las Vegas as a whole, with this new development, will capture a significantly larger share of the national market."

According to LVCVA research, Las Vegas has nearly 9.4 million sq. ft. of meeting space and around 135,000 hotel rooms. Hotels are expected to add 35,000 rooms and 1.4 million sq. ft. of convention space (not including the Echelon) by the end of 2010.

Stillwell said Boyd hasn't yet chosen staff to oversee management of the Las Vegas ExpoCenter or begun thinking about target markets for booking the facility. "It's too early," he noted. "We're still in the planning phase."

Boyd Gaming and MGM Mirage also operate the Borgata Hotel Casino & Spa, a $1.1 billion development in Atlantic City as a joint venture. The property was the first new hotel casino in the city in 13 years when it debuted in 2003.