Jul. 8, 2003 - Artisans were putting the finishing touches Monday on the $275 million expansion of The Venetian even as a limited number of guests checked out following a "very soft opening" for the Fourth of July weekend. 

"We believe this investment is going to offer a tremendous return," said Brad Stone, executive vice president of Las Vegas Sands, the parent company of The Venetian. "(The resort already) has been a huge success on the room side, so we've added product where our margins are highest." 

The Venetian generally enjoys a 70 percent return on investment in its hotel operations. 

"If this expansion allows them to generate significant added revenue at very high incremental margins, it'll prove a big boost for return on investment," said Deutsche Bank analyst Andrew Zarnett. "That's the main reason for the expansion and the basis for judging its success." 

Stone added that the expansion is also expected to stabilize the company's financial performance because hotel operation revenues are less volatile than those resulting from table games. The Venetian's new 1,013-room, 12-story Venezia tower will also boost the property's appeal for group business clients because it increases by one-third the number of available rooms, he said. 

And because management and amenity overhead does not have to be increased, adding to the resort's existing 3,036 suites improves the overall efficiency of operating the resort, cutting cost per room by as much as 12 percent. 

To maximize future flexibility, the expansion includes almost 500,000 square feet of mothballed space: 385,000 square feet on the top of the convention hall expansion and the remaining 80,000 square feet atop the new hotel tower. 

"We're spending money up front now to invest in the future," Stone said. "The flexibility that gives us also will save us huge amounts of money in the future and will make it possible to avoid the disruption of major expansions." 

The roof-top tower space could be used for an added restaurant, high-roller suites or single guest rooms. 

"It's best suited for high-end suites, but we didn't want to commit the space until we were sure of the acceptance of the new tower," Stone said. 

The hotel expansion sits on top of the original parking structure, which was expanded from 3,723 spaces to 4,396 spaces to make room for future growth. 

"Out biggest fear was we didn't want people to see it as a resort on top of a garage. We wanted them to see it as a distinct property that didn't seem necessarily as if it was in Las Vegas," he said. 

The new tower has its own registration area, a spa/pool area in a central courtyard, and four floors of concierge-suites. It will house Bouchon, a French restaurant headed by celebrity chef Thomas Keller, as well as The Venetian's first wedding chapel, a 2,500-square-foot multiplex that can seat up to 155 people or be separated into three smaller chapels. 

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