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The renamed Castaways Las Vegas Holiday Inn & Suites would add 356 rooms and 80 suites to the property's current 344-room inventory. Existing rooms would be thoroughly renovated. Rendering courtesy of Castaways.

Saturday, September 14, 2002
Copyright © Las Vegas Review-Journal

Castways near deal to rebrand as Holiday Inn property, launch renovation plan

Castaways executives are close to a deal that would put a Holiday Inn brand on the hotel-casino and trigger a $57 million renovation and expansion at the 48-year-old property, Castaways and Holiday Inn executives said Friday.

The renamed Castaways Las Vegas Holiday Inn & Suites would add 356 rooms and 80 suites to the property's current 344-room inventory, with the existing rooms slated for a thorough renovation.

Holiday Inn bosses expect to rename the property once they've completed renovations that would bring the property up to the chain's standards, probably by the summer of 2003. The new hotel tower construction would begin after the rebranding.

Industry insiders said the deal is a winner for both parties, and big plus for the city of Las Vegas.

"This is a big plus for the Castaways, and a vote of confidence in Las Vegas," University of Nevada, Las Vegas professor Bill Thompson said. "The Castaways is in a tough location on the eastern edge of downtown, so a deal with a solid hotel company is a big boost."

The casino gets new rooms and the city gets new capital investment at a time when many industry experts have said space limitations and patchwork land ownership make downtown casino redevelopment unlikely.

Las Vegas Mayor Oscar Goodman said the Castaways expansion and Holiday Inn affiliation is good for the city.

"I'm delighted that corporate America believes in investing in Las Vegas," said Goodman, who has made downtown redevelopment one of his top priorities.

For the Castaways, Thompson said the Holiday Inn affiliation may save a struggling property.

It's scheduled to get a thorough makeover, a new hotel tower and access to the Holiday Inn phone and Internet reservation systems.

"We're really excited about these deals," Castaways President and 25 percent owner Michael Villamore said. "Our employees are enthused because the Holiday Inn affiliation will bring occupancy to the property.

For Holiday Inn, the 1,000-plus hotel chain adds needed rooms in an important market after recently losing their brand affiliations with the MGM Mirage-owned Boardwalk hotel-casino on the Strip and downtown's Fitzgeralds.

"Las Vegas is the number one hotel market and we're the largest hotel company," Holiday Inn's Dave Wilensky, director of western franchise development, said. "We had the least rooms in Las Vegas, and this affiliation will give us a lot of new and refurbished rooms and suites in downtown Las Vegas."

The company now must turn down a large number of prospective Las Vegas customers due to a lack of available rooms.

Expect Holiday Inn to sign at least one additional brand-affiliation deal with a Strip-area operator, Wilensky said.

"Our objective was to replace the rooms we lost at Fitzgeralds, and by renovating the existing tower and adding 436 new rooms and suites, the property will be the Taj Mahal of downtown," he said.

The Castaways was renamed after current owners VSS Enterprises purchased the Showboat from then-owner Harrah's Entertainment in 2000.

The hotel-casino will have to have the proposed expansion approved by the Las Vegas City Council, a prospect experts consider likely.

"There's not a whole lot of capital being spent on that side of town," Thompson said. "No one's going to oppose a renovated Castaways with a new tower and new jobs."