MGM Mirage CEO Jim Murren called CityCenter’s opening a “game changer.” So did Bill McBeath, the president and CEO of Aria and Vdara. Rick Fedrizzi, the founder and CEO of the U.S. Green Building Council, called it “transformative.” CityCenter CEO Bobby Baldwin called it an “evolutionary destination” and McBeath added it was a “paradigm shift in resort destinations.”

The superlatives may prove true, at least by the sheer scope, beauty and uniqueness of the project: $8.5 billion; 18 million square feet covering 67 acres; 6,000 high-end hotel rooms spread across two hotels and the signature casino, Aria; 12,000 employees; 500,000 square feet of luxury retail and fine dining; and the soon-to-open tilting twin 37-story Veer Towers with 670 condominium units. The individual buildings create a striking new skyline of rippling steel and glass architecture that all earned LEED Gold certification from the USGBC.

But if it is a game changer, who will be the winners and losers? Will the winner be Las Vegas, so reliant on tourism and the poster child for the AIG Effect and the great recession of 2009? Or will it be MGM Mirage and partner Dubai World, which struggled to complete this project that teetered on the brink of bankruptcy? If it is MGM Mirage, will it be at the expense of the rest of the Strip?

Opinions vary, from the obviously optimistic outlooks from execs at MGM Mirage and the Las Vegas Convention and Visitors Authority (LVCVA) to the more wait-and-see attitudes from analysts and competitors. The hope for everyone—and the belief of MGM Mirage—is that CityCenter will bring more and new visitors to the city, who will in turn spread their wealth up, down and off the Strip. The worry, though, is the massive development will steal business from competitors and the brutal rate wars will trickle all the way down to and eventually decimate the smaller properties on and off the Strip.

GROWING DEMAND
Even McBeath, who was there to open past game changers (Mirage in 1989 and Bellagio in 1998), admits added supply will cause some early pains. “I think the market will have to absorb Aria and CityCenter and it will be painful for a few people,” he says. “Right now demand is up a little, but not enough to absorb all the additional capacity and get the same kind of returns we were talking in 2007. If we hadn’t opened, pricing would be up everywhere. As that capacity is absorbed, and some pretty significant barriers (in the economy) are overcome, you’ll see these places return to ’06-’07 top-line revenue and cash-flow numbers.”

Thirty-six million visitors came to Las Vegas last year and the LVCVA is forecasting a two- to five-percent boost in that number this year, “and CityCenter will play a big part in that increase,” says Cathy Tull, senior vice president of marketing for the LVCVA.

In addition to the global recession, the difference this time around is the altered Las Vegas landscape. Built by Steve Wynn, the Mirage opened amid similar concerns because it was the Strip’s first high-end luxury resort. But it exceeded analysts’ concerns that it needed to make $1 million a day to survive.

McBeath says it earned twice that and “sparked the next $20-25 billion in building volume over the next two decades,” which included the first ultra-high-end luxury opening with the Bellagio in 1998. Those successes paved the way for other high-end properties like the recent openings of the Wynn Las Vegas, Encore, Venetian and Palazzo. They are also exactly what make Aria and CityCenter’s opening a riskier proposition.