A Bad Time for a New Development
When a recession hits and people are told to save instead of spend, certain industries take the worst hit from spending cutbacks. In particular the hotel, resort, and entertainment industries struggle to fill up their accommodations as tourism cuts down and wallets close up. A new district launched in the heart of a recession will struggle to make its development costs worthwhile but a will to roll the dice on the chances ultimately may still pay off in the long run.
The CityCenter complex in downtown Las Vegas was an $8.5 billion investment that opened late in 2009 with anticipated excitement from the owners, residents, and tourists hoping the new addition to the Strip would bring renewed excitement to the city’s nightlife center. Unfortunately being late 2009 the recession was still being felt in full force across the U.S and in many places of the world leaving those high expectations difficult to fulfill.
Three years later business is still struggling to succeed as high as operators may have wanted. Hotel rooms have had to be filled at lower rental prices while condos have failed to have as high of sales as anticipated. Even the mall that was setup on site has not been fully filled with tenants and as a result retail sales are not contributing as much as people may expect.
Colliers and International research and information systems manager John Stater says the CityCenter was not opened at the best of times which is a large reason for the menial success.
“It was something that MGM really wanted to do, but in terms of the local economy, I think it’s debatable whether it was pulling a lot of new visitors into Las Vegas.”
The economy is beginning a slight turnaround after a long period of decline which may help to make the development more profitable long term. But Stater and others warn that CityCenter has survived by slashing its prices and to continue thriving especially in condo sales, prices may have to go deeper down.
