Las Vegas Hilton in Foreclosure

[Nevada]

Yes, the Las Vegas Hilton, formerly the International Hotel, was foreclosed on.

http://www.msnbc.msn.com/id/44536522.../#.TnJ7oexaxc8

I expect the hotel to go into bankruptcy and operate under receivership while they try to figure a way out of this mess.

Unfortunately the mess they are in is simple to understand; like many other hotels in Las Vegas, they have made too large of an investment and need to get $200/night for a hotel room to pay the bills. Unfortunately there aren't enough $200/night customers to go around during a recession.

Expect other luxury hotels to face the same fate.

[oz in SC V2.0]

Hope and change.

[Nevada]

Originally Posted by oz in SC V2.0

Hope and change.

Aside from the fact that the recession imploded on Bush's watch, it was poor business planning on the part of the gaming industry from the start. The luxury hotel business in Las Vegas was way overbuilt. The assumption was that the clientele for $200/night rooms would continue to grow. That's short-sighted, in fact it's outright ignorance.

Even as I was leaving Las Vegas to build my cottage in northern Nevada for my depression shelter, MGM/Mirage was imploding the Boardwalk Hotel to make room for City Center, which brought with it three additional $200/night hotels. It's difficult to believe that the were completely oblivious to the impending recession, particularly since it seemed so clear to me. As I said; complete and total ignorance.

I got a photo of my girlfriend in front of the Boardwalk just a few months before it was imploded.

http://windowrock.com/mon1.jpg

Knowing what they know now, I'll bet MGM/Mirage would rather have the Boardwalk and $8.5 billion today, rather than City Center. It could still bankrupt them.

[oregon woodsmok]

Oh boy. I've always wanted to own a Las Vegas Casino.

I wonder what it will sell for. If it is anything like the prices for foreclosed homes around here, someone is going to pick up an enormous bargain.

They aren't making their money off the rooms in Vegas. The make their money off the gambling. With the right cheap restaurants and the right shows going on all the time to bring in the marks, they should be able to rent those rooms for $10 a night and still make tons of money.

[Nevada]

Originally Posted by oregon woodsmok

Oh boy. I've always wanted to own a Las Vegas Casino.

I wonder what it will sell for. If it is anything like the prices for foreclosed homes around here, someone is going to pick up an enormous bargain.

I read in the paper today that Hilton does not intend to renew the franchise with that hotel next year. It's future is very much up in the air.

Originally Posted by oregon woodsmok

They aren't making their money off the rooms in Vegas. The make their money off the gambling. With the right cheap restaurants and the right shows going on all the time to bring in the marks, they should be able to rent those rooms for $10 a night and still make tons of money.

That was the business model that built Las Vegas, but the past 20 years have seen a new business model. Many of the newer luxury hotels on the Strip were built to cater to customers who wanted the best, and were willing to pay for it. Those hotels have multi-billion dollar mortgages that have to be serviced. If they can't get $200/night for a room they can't survive. The problem is that during the recession there aren't enough $200/night customers to go around. Those hotels are in trouble now.