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2020 to be a banner year for Las Vegas hotel expansion

In one glorious three-month span in 1993, three Las Vegas resorts opened their doors and the city’s capacity instantly expanded by nearly 10,500 rooms.

Time magazine featured the city in a cover story, and Las Vegas beckoned to people who had never seen it before to experience a hotel in the shape of a pyramid (Luxor), a resort with a free show featuring a British warship that sank in a Strip lagoon every 90 minutes (Treasure Island) and a resort that, at the time, was the largest in the world and had a theme park attached to it (MGM Grand).

Fast-forward 26 years to 2020 and the public will see the beginning of a new parade of resorts. Over three years — 2020, 2021 and 2022 — Las Vegas will see the addition of some 12,000 rooms, bringing the city’s capacity to an estimated 161,953, by far the most in the United States. That’s 40,000 more than what Orlando, Florida, has and more than the number of hotel rooms in Dallas and Houston combined.

For a region heavily dependent on tourism, new resorts and new attractions can bring new — and more — visitors and keep the valley’s economy humming.

Virgin entering market

The two highlights of 2020 will be the reopening and rebranding of the Hard Rock Hotel into Richard Branson’s Virgin Hotels Las Vegas in November and the December opening of Circa, the first resort to be built from the ground up in downtown Las Vegas since 1980.

The arrival of Virgin to the market is the result of Branson’s acquisition of the Hard Rock for an undisclosed price in 2018 and the announcement of plans for a $200 million renovation. The property’s 1,500 rooms will close in February, then reopen as Virgin in November.

A month after that, downtown Las Vegas entrepreneur Derek Stevens will open 512 rooms and suites of the 777-room Circa, which will become downtown’s tallest building at 458 feet when completed.

Stevens expects Circa to become an attraction when it opens with its three-story sportsbook that he says will be the largest in the world and a six-pool, year-around swimming pool deck that will feature a 134-by-41-foot screen to watch sports.

Stevens recalled the city’s 1990s boomtown days and sees some parallels in 2020.

“I think what you’re seeing in construction now kind of reminds you of a couple of decades ago when there was a lot of action,” he said during a tour of Circa.

“All those projects back then brought a lot of people to Las Vegas, and I think you’re going to see the same thing with what’s happening here,” he said. “The 2008-2009 recession had a long-lasting impact, more than just a couple of years.”

Sports catapulting growth

Stevens believes the nationwide interest in sports wagering — catapulted by 2018 ruling by the U.S. Supreme Court that made sports betting legal across the country — is partially responsible for Las Vegas’ expansion.

Much of Southern Nevada’s efforts to become a hub for professional sports is driven by projects and events coming in 2020.

Construction of the $2 billion, 65,000-seat Allegiant Stadium will drive traffic, not only because Las Vegas will become an NFL city in 2020 but because the building will become a new home for UNLV football. Special-events planners also are gearing up for the building to host concerts and other major events.

All of those events are contributing to demand for hotel rooms. The city’s year-to-date occupancy rate is at 89.3 percent, just over 1 point off 2007’s all-time best mark, and average daily room rates are closing in on historic highs, according to Las Vegas Convention and Visitors Authority research.

“Sports is driving a lot of it,” Stevens said. “And the demand for sports wagering just continues to grow.”

But there is more to hotel room expansion than just sports. Passenger traffic at McCarran International Airport will hit an all-time high approaching 50 million in 2019. Much of that is driven by the expansion of international travel.

“Look at how many more international flights are coming in to Las Vegas every year,” said Stowe Shoemaker, dean of UNLV’s William F. Harrah College of Hospitality. “We have direct flights to Israel. It was just on the news yesterday, there are direct flights in from another place in Germany. We have a couple flights today to London. We have direct flights to (South) Korea. So we have huge demand coming to Las Vegas. It’s easy to get to.”

“And, you’re minutes from your hotel. It’s an inexpensive place to get around,” he said.

Events Industry Council CEO Amy Calvert said it’s a typical growth pattern many cities are seeing as they develop additional events, such as conventions and meetings.

“There’s often a sweet spot, but destinations don’t often have that perfect scenario,” she said. “Regardless, there is a correlation between the number of guest rooms that you need to fill a certain amount of space.”

2020 only the beginning

While the 2020 lineup of hotel expansion in Las Vegas is impressive — and in most cities, adding 1,650 rooms in one year would be front-page news — it’s only the beginning for Southern Nevada.

The LVCVA forecasts 4,649 new rooms in 2021, thanks mostly to the anticipated 3,500-room opening of Resorts World Las Vegas on the Strip. And, in 2022, 5,759 more rooms are expected, with 3,179 at Drew Las Vegas, formerly Fontainebleau, pacing that spurt.

It’s almost like the good old days of 1993.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter. The Review-Journal’s Bailey Schulz contributed to this story.

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