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High Rollers

A group of 30 HBS students took September’s long weekend as an opportunity to leave Allston and meet face-to-face the people quietly-and not so quietly-changing the face of gaming and entertainment on the Las Vegas Strip, one multi-billion dollar development at a time.

The Hospitality & Travel Industry Club kicked off the year with its annual Las Vegas Trek, co-organized by trek planner Josh Belkin (OI) and club co-president Dave Kang (OG). Over the course of two days, the treksters rubbed shoulders with executives at Las Vegas Sands Corporation, examined the oddities cluttering Las Vegas Mayor Oscar Goodman’s office, conversed with executives at The Wynn, talked with the manager overseeing construction at MGM-Mirage’s mammoth CityCenter development, took a peek in the casino surveillance room at the Bellagio, and toured the ground operations of industry leader Southwest Airlines’ mega-hub at McCarran Airport.

It was by no means just Q&A, business cards, and leather portfolios. Among VIP treats the trek gained access to were a birds-eye view from high atop the MGM-Mirage CityCenter construction site; the liquor pump room servicing all 53 bars at Bellagio with 90 miles of tubing; an up-close view into the cargo hold of a Southwest Airlines 737 loaded for departure; and two private, off-schedule fountain shows at Bellagio’s famous 8-acre lake. When the sun went down, the treksters enjoyed dinner and line-bypass VIP access to TAO nightclub at The Venetian and also watched the second-ever performance of Cirque du Soleil’s newest show, “Criss Angel: Believe” at The Luxor.

Cognizant of the reduced congestion on Las Vegas Boulevard, frugal $10-15 minimum bets at luxury resort casinos, and big bargains on hotel rooms, treksters familiar with the town jumped at the opportunity to press executives about the conditions facing Las Vegas’s economy, once labeled “recession-proof.”

“If you had asked about our plans for growth last year, we would have told you we were the smartest people in the world,” said a Las Vegas Sands senior executive as the trek made its first stop at the offices in The Venetian on Friday morning. “We’re not exactly talking about how smart we are these days.”

Mayor Oscar Goodman voiced similar concerns as he enters the final years of his last term as one of the most popular and highly-approved mayors in the nation. “My advisors were telling me this financial crisis would be weathered in 6 months. Then they were telling me one year,” said Goodman as he sat in an elaborate 6-foot-high wooden throne behind a crescent-shaped mahogany desk in an office that included, among other things, neon signs and an autobiography of Mahatma Gandhi. “Now, you’re telling me at least two years,” he said, in response to one student’s summary of the “Turmoil on the Street: Fathoming the Financial Crisis” panel that took place at HBS a few days before the trek launched.

Not all was bleak on the Strip, though, as MGM-Mirage expressed great optimism that their 17 million square foot mixed-use CityCenter complex occupying 76 acres of the Strip between Bellagio and Monte Carlo-also MGM-Mirage properties-would open on-time and mostly sold. Though its original $4 billion cost estimate has recently been pushed by escalating construction costs, minor design changes, and recent financing issues, the company is pushing ahead to open the development by year-end 2009 as other mega-developments of similar size and scope have fallen by the wayside. “We haven’t sold quite as many [condo and condo-hotel units] as we wanted to at this point,” said an executive in Strategy and Development at CityCenter, “but things are still progressing nicely and generally on track.”

And at Southwest Airlines’ operating base in McCarran Airport, station manager Randy Shaw and customer service manager Michael Carr (of A&E’s reality show “Airline” fame) said it was business as usual as they spoke to the trek about Southwest’s impeccable record of growth and profitability, and their legendary 25-minute aircraft turnarounds.

The same could not be said, however, of the second-ever performance of illusionist Criss Angel’s “Believe” show at The Luxor, which attending treksters uniformly agreed was a disappointment that did not come close to matching the captivating stunts viewable on Angel’s cable television show “Criss Angel: Mindfreak.”

“I would like to reiterate that the Hospitality & Travel Industry Club will not offer refunds for lousy, un-reviewed Cirque shows,” said Josh Belkin on the flight back to Boston.

October 6, 2008
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