Vegas Goes Cosmo

The last mega-resort hotel approved for the Strip before the Great Recession struck, The Cosmopolitan of Las Vegas, opened its doors Dec. 15 as the Sin City economy continues to struggle.

The $3.9 billion, 2,995-room hotel and casino is going to have to peel away customers from its neighbors, including Bellagio, CityCenter, Caesars Palace, Venetian, Wynn and Encore resorts to give Germany’s Deutsche Bank a return on its hefty investment, let alone cover its debt. The investment bank took over the project after the original developer defaulted.

Tourism has begun to rebound from the sinkhole that was 2008-09, though not to the levels needed to fill the new rooms and casino space added during that period and after.

Bellagio, the Strip’s top performer, generated $122.9 million in operating income the first nine months of 2010 for MGM Resorts International. The much newer Wynn and Encore Las Vegas properties saw a $67.9 million operating loss for Wynn Resorts Ltd. in the same period, while CityCenter generated an operating loss of $1.27 billion for MGM.

“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.”

Cosmopolitan CEO John Unwin thinks there’s room for optimism. “Once the consumers get confidence, I think once they see the numbers and see the growth, I think it’ll pick up,” Unwin said. “I’m happy to be opening this year and not last year.”

Guests looking for fabulous amenities, eye-popping interiors and world-class dining will get plenty of bang for their bucks. Video-screen columns and moving art greet guests in the lobby. They can sip drinks inside a giant chandelier. And its 13 restaurants are reportedly a food tourist’s dream.

A lot of Vegas resorts can boast similar draws, but what likely gives the Cosmopolitan a leg up is its rooms. Originally envisioned as a condo tower, the hotel’s large rooms sport broad terraces with views, and individual kitchenettes.