You are a member of a firm that specializes in the development of world-class resort hotels around various parts of the world. A client has hired your firm to create a report and recommendations for a new resort somewhere in the United States. Course Project
Lake Las Vegas Boardwalk
A boardwalk signifies relaxation and entertainment. What better place to build a fabulous boardwalk entertainment village than in the tourist capital of America beautiful Las Vegas, NV, to be more specific, Lake Las Vegas. This is a lush lakeside retreat located only 15 minutes east of the famous “Las Vegas Strip.” It is surrounded by natural red rocks and borders the Lake Mead Recreational Park. Several other hotels have already graced this manmade lake along with two award winning golf courses, and gourmet restaurants and exquisite shopping.
Currently, there are two lakeside parcels remaining with great frontage and access to the shops and golf as well as many aquatic activities including sailing, fishing, canoeing, and small boating. Development of the structure would be made through a partnership with Lake Las Vegas LTD, the chief land owner within this region. We feel that with a strategic partnership with the land owner, in the form of a land lease, our overall build-out costs would be drastically reduced and would yield pleasant tax incentives for this form of business structuring.
We aim to build a traditional boardwalk style entertainment center complete with amusement hub and retail shops to add to the atmosphere. We also are planning on building a freestanding roller coaster, Ferris wheel, and Merry-Go-Round to add in to the boardwalk theme. An artist rendering of our anticipated plans would look something like this. There were nearly 40 Million visitors to Las Vegas in 2012, bringing a total of $9.5 Billion in gaming revenue to Clark County. These figures are poised to increase steadily through 2020 and this doesn’t even take into consideration the added revenues from hotels, restaurants, and retail shops. We can bring a little slice of a vacation retreat and truly make this a desert oasis.
The Greater Las Vegas Valley is located in southern corner of Nevada. It lies bounded on the west by several mountain ranges and drains a 1,564-square-mile watershed southeastward through Las Vegas Wash into Lake Mead. Lake Mead, was created when in the 1930’s the Hoover Dam, was built in a section of the Colorado River creating what is now the largest reservoir in the US. This reservoir receives water runoff from the Rocky Mountains throughout Wyoming, Colorado, and Utah. Lake Las Vegas is currently another manmade offshoot of Lake Mead and developed for the purpose of becoming a master planned community. The water used is diverted through piping upwards throughout the community for reasons such as usage in homes and business for drinking water as well as the reclaimed water is then used for landscaping golf courses as well as watering the additional plants and shrubbery in the region.
As for the wildlife in the region, it has all been preserved as natural for the area. There is also an assortment of water fowl, which can be seen flying about the area due to the lush creation of this oasis. Complete infrastructure has already been developed and is awaiting further investment potential. The addition of our boardwalk entertainment complex would be a welcome fit to this existing lakeside resort town.
Since its inception as a gambler’s paradise, close to the Mecca of Los Angeles, CA back in the mid 1940’s, Las Vegas has developed into more of a normal metropolis with a liberal attitude. The gambling, alcohol and partying has grown Las Vegas into a town with two sides; one with the entertainment “anything goes” attitude and the other where suburbia can flourish with schools, hospitals and regular employment. The Las Vegas Metro area now encompasses a population of nearly 2 million, and is still growing.
IT has its economic downturns as the rest of the country also does, yet it seems to bounce back as much of the revenue coming through this area is transient from elsewhere. Las Vegas as of recently has developed into more of a family friendly location complete with Amusement theme parks, water parks and outdoor activities for children. It is this atmosphere we are tapping into, with our devotion to amusement and excitement with a boardwalk relaxing atmosphere.
Economic feasibility and Market
With the aforementioned nearly 40 million tourists last year bringing with them their 9.5 Billion in gambling revenue, along with other spending capital it is only logical to use this location as a prime target location for our boardwalk concept. The tourism industry has recovered pleasantly from the most recent recession and Las Vegas has shot back into action with three additional planned themed resort casinos being built on or near the Las Vegas Strip within the next 5 years.
The competition is booming and with it comes a necessity for action. The future expansion planning within the Las Vegas Area calls for additional development of highway roads, as well as further expansion of the current monorail system within the strip-downtown gambling corridor leaving more expansion available to the surrounding areas. Our Lakeside resort is begging for attention and we aim to jump in first with our themed attraction.
Management and maintenance
Our boardwalk hotel is patterned after the popular Kemah Boardwalk Inn, located in Galveston TX. This regional attraction has been in operation
since 1997 and is only growing in popularity with both Texas residents as well as visitors to the Galveston Bay. By comparison, the Kemah location has only 52 rooms and is more dependent upon seasonal tourist business, whereas our Lake Las Vegas location will be twice the size with over 115 rooms and the ability to remain busy with both tourists and locals alike all around the year. It is with this main difference as well as the addition of a fully operational casino floor which will allow our operation to flourish and become profitable within the first 6-8 years.
We are tentatively with contacts from regional Hotel management companies as well as casino managements for partnerships in our operations. We see the necessity to have this run like a four star hotel but with the relaxed nature of a holiday theme park with a casino. For our purposes of this project we are leaning toward Harrah’s Management Company. Harrah’s has the experience and technical know-how to handle all aspects of this venture and we would be pleased to have them as a strategic alliance.
As for the financials we have developed a nice breakdown which will follow, but to begin, we are creating a budget for a hotel with 115 rooms to cost in the neighborhood of $22 million, additionally we will purchase a Roller Coaster, Ferris wheel and Merry-Go Round to cost an additional $3 million and the boardwalk construction build-out of approximately $5 million. This will all be financed with competitive commercial rates at 8.5% interest rate amortized over 30 years, with a balance due in 5 years. This is a standard financial package available through most commercial banks.
We anticipate the retail shops and food establishments to be leased out with a competitive lease based upon the size, and location of the shop as well as with an additional gross revenue % additive. This is also standard for commercial leases in this arena. We hope to garner at least two separate nationally competitive restaurant chains leaving a final place for an independent to keep us fresh. As for the shops, these will all be leased as a first-come first-serve basis and will be contingent upon fitting in with the established atmosphere.
As you can see based upon our pro-forma figures there will be plenty of room remaining for additional revenue generation as well as for advertising. We also plan to pay of the underlying note quicker than the banks anticipate. This will save us thousands in financing and interest charges. We do not currently have any interesting in additional properties as this property will undoubtedly require future planning and development to keep the theme fresh and popular with the tourists.
Landscape architecture and structural architecture
As for the design and layout of the building, an anticipated concept is located here. It will be a seaside structure with the balconies facing both the lake as well as the entertainment center. Every room will have a view of the activities below and the lake activities. The Roller Coaster and Ferris wheel will be placed directly adjacent to the boardwalk and the hotel as to not defray from the majestic view of the boardwalk. The first floor of the building however will be the shops and restaurants with patios jetting from them into the boardwalk for more of a seaside feel.
The lower portion closer to the Lake will hold the Merry-Go- Round as well as additional seating for live entertainment, whether it be musical groups or live performing magicians and street performers. However from the top of the Ferris wheel, we are anticipating views clear out to the city lights of Las Vegas and to include the “Strip.”
Interior design and decoration
The interior and décor of the hotel will accompany that of the theme, it will be of a nautical feel with black and white portraits of classic carnival settings. Many of these carnival and boardwalk photos will be of the tourists home towns which will add to a sense of realism and personalization. Light blue or yellow and whitewash trim will be the main color scheme while allowing a sprinkle of color to pop where the exciting locations are to be showcased. The interior of the rooms will also be stylized to transport the guest to a seaside location where fun relaxation and entertainment will be abundant.
We plan to have several aquariums located throughout the property where different sea creatures can complete the full package. Some of the fish we plan on bringing in would be from the west coast and much will be from the East Coast and Gulf of Mexico, we may even bring in some sharks to place in a tank behind the lobby bar. This will be simply to add to any realism of seaside adventure.