Construction crews are busy working on renovations at Las Vegas-area casinos, indicating a healthy economy. Business investment growth increased by 4.6 percent in the second quarter, leading to various renovations and expansions at many properties in the Las Vegas valley. Some notable projects include a $20 million casino expansion at El Cortez, room additions at Circa, a $340 million renovation at Rio, and renovations at Horseshoe and Paris by Caesars Entertainment.
PENTA Building Group CEO John Cannito mentioned that they have seen an increase in renovation-related projects in the past year compared to ground-up developments. This trend is expected as hotel owners typically reinvest around 5 percent of revenue in property maintenance and improvements to stay competitive. The COVID-19 pandemic initially led to a decline in property reinvestment, but recent data shows a reversal in this trend as hotels refill reserves and focus on future planning.
Mergers and acquisitions have also played a role in the recent wave of renovations. Dreamscape Cos. acquired Rio and is investing $340 million in the property, while MGM Resorts International acquired the Cosmopolitan and is planning expansions at Bellagio. Similarly, Apollo Global Management plans to reinvest $1.5 billion in The Venetian after purchasing the resort.
Las Vegas is a competitive market where property reinvestment is crucial to keep up with consumer expectations. Major developments in the city have spurred capital improvement plans among operators. El Cortez general manager Adam Wiesberg mentioned that the $20 million expansion is part of ongoing property reinvestment plans to attract visitors amidst growing competition from new properties like Resorts World and Circa.
Looking ahead, changes in U.S. monetary policy could impact future construction activity. The recent interest rate cut by the Federal Reserve may boost future development projects. Andrew Woods from UNLV’s Center for Business and Economic Research predicts a normalization in the economy with looser access to money. Builders like PENTA are cautiously optimistic about the future, noting steady and sustainable growth in Las Vegas.
Overall, the construction boom in Las Vegas reflects a positive outlook for the hospitality sector despite challenges faced in recent years. The city’s vibrant market continues to attract investments, renovations, and expansions, signaling a promising future for the Vegas hospitality industry.