by Andrew Klebanow
Asia Gaming Brief July 2022:
As countries in east Asia begin to welcome pandemic-weary tourists, casinos outside of Macau have begun to resume normal operations. Cautious optimism has, however, been tempered by fears of a global recession, fueled in large part by inflation, and the impact that these economic factors could have on the gaming industry’s recovery.
Up until 2007, it was largely believed that casinos were immune to recessions. The Great Recession of 2007-2009 dispelled that belief. Casinos in regional US markets saw revenue declines that took years to recover.
The Las Vegas tourism economy was devastated by the events that led to this recession, starting with the collapse of the US housing market, which in turn brought a near total breakdown in bank lending.
Today, vestiges of that economic collapse can be found in three notable projects: the Fontainebleau Las Vegas, the St. Regis Suites at the Palazzo, and the recently completed Resorts World Las Vegas.
Construction on the Fontainebleau Las Vegas began in 2007, and the 68-floor structure was topped off in November of 2008. It was to be comprised of a 95,000 sq. ft casino, 2,781 hotel rooms, 1,018 condominium units, a shopping mall, and convention facilities.
Lenders terminated funding for the project in 2009 and construction was halted with the project 70 percent completed. It has stood that way for fourteen years, through bankruptcy and a succession of owners. Construction only recently resumed with completion now scheduled for 2023.
The Echelon Resort was a $4.8 billion integrated casino resort that was to be built near the Fontainebleau. The 63-acre site was to include a 140,00 square foot casino, four hotels with 5,300 rooms, twenty-five restaurants and bars, a shopping mall, and a 650,000 square-foot convention center. Construction started in June of 2007 with a planned opening in 2010.
Building was suspended in August of 2008 when Morgans Group and General Growth Properties, two development partners in the project, could not secure financing. In 2013, Boyd Gaming, the original developer sold the site to the Genting Group.
The partially built steel frame stood unfinished until 2017 when construction finally resumed. Resorts World Las Vegas ultimately opened in June of 2021, fourteen years after the original groundbreaking.
The St. Regis Residences was originally planned as a 50-story luxury condominium tower that was to rise above the Palazzo shopping mall at the Venetian. It was to include 398 units. Construction of the $465 million tower began in early 2007. In November of 2008, construction was halted due to the Great Recession.
In 2011, the developers wrapped the steel superstructure in giant sheets that were printed with murals that resembled a finished building. Uncertainty in the high-end residential market continued to postpone completion of the project.
Today, the steel framework remains, hidden in plain sight, and only a discerning eye can make out the unfinished structure, with two construction cranes serving as the only visible cue that the building remains uncompleted.