International edition
June 18, 2021

The us$ 3.9 billion resort opens this week in a struggling market

Cosmopolitan of Las Vegas faces tough odds to survive

(US).- The Cosmopolitan of Las Vegas, Sin City's last major resort approved before the economic downturn, will need to persuade its rivals' guests to give it a try if it is to survive in the new environment. The us$ 3.9 billion resort opens this week in a struggling market. Analysts are concerned that the 2,995-room Cosmopolitan will face insurmountable challenges.

A

nd analysts say that just to cover its debt, it will need to do better than even the top-performing Bellagio, its neighbor to the north with 3,933 rooms and the same amount of casino space as Cosmopolitan.

The Bellagio generated us$ 122.9 million in operating income the first nine months of 2010 for casino giant MGM Resorts International. Caesars Palace, almost as big, is owned by privately held Caesars Entertainment, formerly Harrah's, so its financial information isn't broken out. During the nine-month time frame, Las Vegas Sands' Venetian and Palazzo had combined operating income of us$ 67.6 million, and Wynn Resorts saw a us$ 67.9 million operating loss at its nearby Wynn and Encore Las Vegas, including one-time costs.

"If you take a look at everything that's opened in recent years, these properties have all struggled out of the gate," said Bill Lerner, an analyst with Union Gaming Group. "I'm not sure why this will be different."

The year-old CityCenter, Cosmopolitan's other neighbor and an MGM Resorts joint venture, generated an operating loss of us$ 1.27 billion the first nine months of this year. It's now worth about one-third of the us$ 8.7 billion it cost to build, according to MGM financial filings. And Wynn's two-year-old Encore bumped the company's Vegas gambling revenue up only 5.4 % in 2009 despite adding a huge new casino.

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