|y Arnold M. Knightly, Las Vegas
Review-JournalMcClatchy-Tribune Regional News
May 30--The new owners of the Tropicana Las Vegas are hoping millions of dollars in renovations and on-site owners can restore some of the luster to the property once known as the Tiffany on the Strip.
The Tropicana building, some of which dates back to the 1950s, is being redone in a South Beach Miami motif by the new owners -- Toronto-based Onex Corp. and former MGM Grand and movie studio executive Alex Yemenidjian.
"This maintains something that is original in the city and respecting that," property President Thomas McCartney said. "It's an original product in the marketplace and to dismiss it really misses the value of the location and what was started here."
The $165 million renovation is nearly 30 percent complete and is expected to help the property compete for the age 30-plus money crowd.
David Schwartz, director of gaming research at the University of Nevada, Las Vegas, however, said it is difficult to gauge how successful the renovations will be in attracting the target audience to the Tropicana, which once featured top-tier performers like Sammy Davis Jr. and Jack Benny, and served as a locale for a James Bond film.
"The expectation is that they're going to put this in and they're going to make some kind of return on investment," Schwartz said. "If you don't put it in, there's no way you're going to get any kind of room rate. If you figure they're putting in $165 million, what kind of incremental dollar improvement will that make?"
The renovations come after the previous owners, Phoenix-based Aztar Corp. and then-Kentucky-based hotelier William Yung III, floated grandiose plans of completely overhauling the property or even imploding the building to build a new 10,000-room resort.
A model of Yung's vision sat in the property's offices until 2008 when the hotelier's casino interests went into bankruptcy.
It was a far cry from 1971 when the hotel was featured, along with other Las Vegas hotels, in the James Bond film "Diamonds are Forever." Bond, played by Sean Connery, comments in the film, "I hear the Hotel Tropicana is quite comfortable."
The Tropicana, however, in recent years has suffered from neglect.
The lack of capital spending hurt the resort's bottom line, too, with revenues falling 27.7 percent between 2005 and 2008. The once-proud resort began operating at a loss in 2007, a trend that has continued through the first quarter this year.
The new owners are on-site now, with Yemenidjian spending 15-hour days at the property overseeing every facet of the overhaul.
"He is the overarching vision for the property," McCartney said. "He is collaborative in what he does, but he is the final decision-maker. His eye for art and his eye for decor is very impressive."
The renovation includes generous use of powdered white paint, accented by tangerine, copper and red colors, to give the 1,658-room hotel-casino its new South Beach Miami feel.
The owners also decided to accelerate the renovations by combining the first two phases into one, pushing the renovation costs to $165 million from an initial $105 million budget.
The renovation also includes a new club in the hotel's pool area that will be run by Nikki Beach, which operates beach clubs around the world including in Miami, New York City and St. Tropez in Southern France.
McCartney declined to discuss what the property's room rates will be once the renovations are complete.
Schwartz said the economy, which sent room prices tumbling, made the renovations necessary if the Tropicana hoped to stay competitive.
"A couple years ago they could have scraped by being where it is on value," Schwartz said. "They wouldn't have to worry that there were no flat-screens in the room. But being what the market is now, they have to do it to stay competitive."
Contact reporter Arnold M. Knightly at firstname.lastname@example.org or 702-477-3893.
To see more of the Review-Journal or to subscribe to the newspaper, go to http://www.lvrj.com.
Copyright (c) 2010, Las Vegas Review-Journal
Distributed by McClatchy-Tribune Information Services. For reprints, email email@example.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.