|By Arnold M. Knightly, Las Vegas
Review-JournalMcClatchy-Tribune Regional News
July 16, 2010--Rumor, the Siegel Group's latest turnaround project, will welcome its first guests today.
The 150-room hotel is the second boutique-style hotel the company has refurbished this year and is having a soft opening, with the official grand opening coming next month.
The first guests will include a group of people who won a Los Angeles radio station promotion contest.
"We want to bring some guests in and make sure everything is right; work out the kinks," Siegel Group President Stephen Siegel said.
Siegel Group paid $4 million to renovate the former St. Tropez on Harmon Avenue across the street from the Hard Rock Hotel.
Siegel bought the closed property in September for $10.5 million.
Rumor will be co-marketed with The Artisan, which the company bought in January.
Rumor will offer rooms for $79 per night midweek and $139 per night on the weekends to start.
Siegel said the company is using "guerrilla marketing" to generate interest in Rumor and the 64-room Artisan.
However, he expects that word-of-mouth from the properties' customers to generate enough excitement to fill the rooms.
"What's good about Rumor and Artisan is that once people get here, they love it," Siegel said "It's just getting people to know we're here."
Siegel said Rumor is being marketed heavily in Los Angeles to the "young, influential entrepreneur and creative arts person" between age 25 and 50.
Closer to home, Siegel Group executive Yale Rowe said the company is talking to the Las Vegas Convention and Visitors Authority and other destination management companies to promote Rumor.
Rowe said the two-story complex's enclosed courtyard and pool on 4.2 acres is a strong promotional tool when talking to the organizations.
"We've got this great backyard to do events in," Rowe said. "Frankly, no one else has an environment similar to this."
One of the ideas is to rent the entire property to convention groups who usually rent large blocks of rooms at large Strip resorts during shows such as the International Consumer Electronics Show.
Rumor enters the market when many small limited-service hotels not tied to national brands or affiliations are struggling in Las Vegas.
Mike Mixer, senior vice president of Colliers International Las Vegas, said nearly half of the limited-service hotels not tied to national databases or brands are in some form of financial distress.
"Unflagged properties tend to do a little worse because they are completely reliant on transient customers," Mixer said.
Mixer said those types of hotels are being hurt even further because Strip hotels have cut their room rates.
Mixer said he is marketing some limited-ervice hotels, but appraised values are down 50 percent to 70 percent from 2007 before the economic downturn.
Like homes around the valley, many smaller hotels are held by banks or sellers who would rather hold the property than take a large loss.
"Most valuations are based on income," Mixer said. "The income levels are at an all-time lows in terms of revenue and cash flow."
Along with Rumor and the Artisan, Siegel Group also owns the Gold Spike downtown and the Resort on Mount Charleston.
The Siegel Group got its start in 2004 buying depressed apartment complexes, renovating them and rebranding into a chain of flexible-stay apartments under the Siegel Suites name.
The company recently acquired its 18th Siegel Suite near the corner of Charleston and Las Vegas boulevards, giving the company 4,000 apartment units in Clark County.
Contact reporter Arnold M. Knightly at firstname.lastname@example.org or 702-477-3893.
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