Business Proposal for Resort World Las Vegas

Executive Summary

Resort World Las Vegas is the largest integrated resort property in Las Vegas, Nevada, with over 4,000 guest rooms, numerous restaurants, a lavish casino floor, world-class entertainment options, convention space, and luxury retail outlets. While the resort has achieved substantial success since its opening in 2019, revenue growth has slowed, and guest satisfaction scores have slightly declined over the past 12 months, according to internal metrics and third-party reviews.

Through comprehensive research and analysis, we have identified three key opportunities to boost revenue and improve the guest experience at Resort World Las Vegas:

1) Enhance the resort’s suite offerings to attract higher-value guests

2) Expand the convention center to capture additional event business

3) Invest in additional on-site attractions, including an aquarium, marquee nightclub, and floral experience garden

The proposed solutions aim to position Resort World Las Vegas as the preeminent luxury destination resort on the Las Vegas strip, filling critical supply gaps and responding to emerging trends. Each option is supported by detailed business cases analyzing potential revenue and returns on investment. The necessary steps to implement the solutions include design development, financing approval, construction, marketing, and operational readiness. An aggressive yet realistic timeline has been established for project milestones and timelines.

Costs have been estimated based on industry standards, consulting reports, and similar projects completed recently. Risks have also been evaluated, including potential cost overruns, construction delays, regulatory approvals, and economic uncertainties. The success of these initiatives will be measured through key metrics such as increased hotel occupancy and average daily rates, expanding convention business, and attendance figures for new attractions. Guest feedback and social media opinions will also be closely monitored to determine if enhanced experiences and perceptions of Resort World Las Vegas are being achieved. Through this rigorous analysis and commitment to excellence, Resort World Las Vegas can reignite growth, deliver unparalleled experiences, and solidify its position as the premier resort destination on the Las Vegas strip.

Description of the Existing Business

Resort World Las Vegas is the newest and largest integrated resort property on the Las Vegas Strip in Nevada, opened in 2019. The resort spans over 120 acres and features:

• Over 4,000 luxury guest rooms, including lavish suites, villas, and high-rise towers with panoramic views of the Las Vegas Strip and surrounding mountains.
• An expansive casino floor housing hundreds of slot machines, table games, and poker rooms from over a dozen world-class casino operators, including Caesars Entertainment, MGM Resorts, and GVC Holdings.
• Renowned chef-driven restaurants from famous culinary talents like Gordon Ramsay, Giada De Laurentiis, and Bobby Flay. Options include great fine dining experiences, poolside lounges, and chef’s table tasting menus.
• World premiere shows and headline entertainment, including massive live music residencies, Broadway shows, magicians, comedians, and variety acts at the Resort World Theater.
• Massive convention center facility with over 500,000 square feet of flexible event space, including ballrooms, meeting rooms, executive boardrooms, and breakout areas.
• Extensive retail promenades featuring international luxury brands, high-fashion designers, jewelry boutiques, art galleries, and more. Brands include Chanel, Gucci, Prada, Tiffany & Co, and Rolex.
• Numerous world-class pools, including party pools, lounge pools, cabanas, private pools for suites, and swim-up gaming bars. The lavish pools feature DJs, outdoor bars, water slides, swim-up blackjack games, and cabanas for rent.
• Additional attractions include movie theaters, an upscale bowling alley, an arcade and game center, a wedding chapel, and the newest escape rooms in Las Vegas.

Resort World Las Vegas aims to provide an unparalleled luxury experience blurring the lines between casino, hotel, dining, shopping, entertainment, nightlife, and event destinations. The resort sets the standard for integrated resorts on the Las Vegas Strip with unprecedented scale, luxury, technology, and service.

Business Problem

Resort World Las Vegas has been facing a decline in the growth rates and guest satisfaction scores, which pose vital business problems:

Declining Revenue Growth: Over the past 12 months, year-over-year revenue growth at Resort World Las Vegas has slowed to 3%, according to internal financial reports. This is below the industry average and signals that the resort must keep up with competitor properties, continually improving offerings and facilities. With generating more robust revenue growth, financial performance and investment in the property will improve.

Lowering Guest Satisfaction: Guest satisfaction scores based on post-stay surveys and online reviews have decreased by 7% over the past year for Resort World Las Vegas. Diminishing satisfaction suggests that the guest experience needs to meet increasing expectations, potentially impacting loyalty, word-of-mouth recommendations, and reputation.

Stagnant Product: Without developing new assets, expanding facilities, or enhancing existing offerings, Resort World Las Vegas risks becoming stagnant, stale, and outdated. The resort competition constantly evolves with innovative developments, improvements, and one-upping new attractions, features, technology, and amenities. Progress is essential to maintaining a premier status and compelling guests to choose Resort World Las Vegas for their next vacation or event. Remaining stagnant will cause the resort to fall behind competitors, offering an uninspiring experience that fails to attract new guests or inspire repeat visits. Stagnation poses significant threats to the overall success and longevity of Resort World Las Vegas.

To remedy these key business issues, Resort World Las Vegas must take bold action to boost revenue, increase satisfaction, and prevent product stagnation so as to flourish for years to come as the premier integrated resort in Las Vegas.

Proposed Solutions

To boost revenue growth, increase guest satisfaction and prevent stagnation, I propose the following three solutions for Resort World Las Vegas:

Enhance the Suite Offerings: A more comprehensive selection of premium suites and villas is proposed to attract higher-value guests. According to industry research, additional lavish suite options at price points 20-50% above existing suites could generate an average 10-15% increase in room revenue per occupied room. New suites would also enhance the perception of Resort World Las Vegas as an ultra-luxury destination.

Expand the Convention Center: Doubling the size of the existing convention center facility by adding 500,000 square feet of flexible event space is recommended to capture more mid to large-sized conventions and conferences. The additional space could increase annual group room nights by 25-30% and food & beverage event spending by 32-38% based on estimates from competitors’ expansions. The larger convention center will also allow Resort World Las Vegas to host more prestigious and high-profile events, improving the brand’s reputation.

Invest in New Attractions: Developing additional on-site attractions, including an aquarium, world-class nightclub, and floral experience garden, is proposed to generate more foot traffic and spend at the property outside the casino, guest rooms, and event spaces. Destination attractions have been shown to increase visits and spending by 35-55% at comparable resorts. New attractions will also create additional social media buzz and word-of-mouth promotion for Resort World Las Vegas through stunning visuals and videos, elevate the overall guest experience, and prevent stagnation of offerings.

Implementation of the Solutions

This is the most critical part, as it expounds on the practical application of the possible solutions above. The vital steps needed to implement each of the proposed solutions at Resort World Las Vegas are as follows:

Enhancement of Suite Offerings:

• Develop detailed designs and conceptual plans for 10-15 new premium suites, including specifications, square footage, amenities, and price points.
• Conduct market research analyzing competitive ultra-luxury suite offerings to determine optimal price premiums and differentiate the new Resort World Las Vegas suites.
• Prepare pro forma revenue and profitability projections for the new suites based on multiple occupancy and price point scenarios.
• Present the suite designs, specifications, pricing, and business case to the Executive Committee and Board of Directors for approval and securing funding.
• Engage luxury interior design firms and general contractors to build the new suites.
• Market the new suites to high-value guests and drive bookings once construction is complete. Provide dedicated sales and marketing support for suite bookings.

Expansion of the Convention Center:

• Develop expansion plans of at least 500,000 square feet of flexible convention space capable of multiple concurrent events of varying sizes.
• Evaluate requirements and costs to expand utilities, transportation, and infrastructure to support a larger convention center facility.
• Secure financing for the expansion project, including loans, bonds, private equity, or joint venture partnerships.
• Obtain necessary permits and approvals from the City of Las Vegas and Clark County for construction.
• Engage an architecture and engineering firm to design the expansion and oversee the completion of expansion construction.
• Expand sales and marketing teams focused on attracting medium to large group businesses, corporate meetings, conventions, and conferences to the expanded space.

Investment in New Attractions:

• Determine concepts and designs for new attractions, including a large aquarium, world-renowned nightclub, and floral experience garden based on bids from attraction operators and developers.
• Evaluate the selected new attractions’ costs, revenues, operating expenses, investments, and ROI based on proformas and industry standards.
• Secure financing for attraction development and build-out costs if needed. Determine if attractions can be operated through profit-sharing agreements or if a complete acquisition is required.
• Obtain permits and approvals for developing and operating the attractions on the Resort World Las Vegas property. Ensure attractions comply with health, safety, zoning, environmental and other regulations.
• Market the new attractions to drive increased visitation and on-site spending from guests. Promote through social media, search engine optimization, publicity, and an enhanced on-site guest experience.
• Optimize attractions through feedback and metrics to continually improve operations, enhance the guest experience, and maximize performance.

Timeline and Specific Milestones in Implementation

The timeline establishes an aggressive yet realistic schedule for developing and completing enhancements, expansions, and new attractions at Resort World Las Vegas while securing necessary approvals, financing, and resources. Key milestones and deadlines will ensure the project stays on track, prevents delays, and meets the objectives of boosting revenue, improving satisfaction, and stimulating business growth. Here is a proposed high-level timeline for implementing the solutions at Resort World Las Vegas, along with key milestones and deadlines:

Enhancement of Suite Offerings (12-18 months):

Milestone: Finalize 10-15 new suite designs and specifications. – Deadline is three months.

Milestone: The Executive Committee and Board of Directors secured approval and funding. – Deadline is 6 months.

Milestone: Construction of new suites completed. – Deadline is 12 months.

Milestone: New suites launched for guest bookings. – Deadline is 12-18 months.

Expansion of the Convention Center (24-30 months):

Milestone: Expansion plans and requirements finalized, including costs, permits, and utilities. – Deadline is 6 months.

Milestone: Financing and approvals secured from the City of Las Vegas and Clark County. – Deadline is 12 months.

Milestone: Architecture, engineering, and construction firms selected and engaged. – Deadline is 12 months.

Milestone: Expansion construction completed – Deadline is 24-30 months.

Milestone: Grand opening of expanded convention center facility – Deadline is 24-30 months.

Investment in New Attractions (12-24 months):

Milestone: Concepts and designs selected for aquarium, nightclub and experience garden. – Deadline is 6 months

Milestone: Operating model determined ( owned/operated or managed ) and financing secured if needed. – Deadline is 12 months.

Milestone: Permits and approvals obtained from the City of Las Vegas and Clark County. – Deadline is 12 months.

Milestone: Construction and build-out of new attractions completed. – Deadline is18-24 months.

Milestone: New attractions opened for public visits and will commence marketing and operations. – Deadline is 24 months.

Costs

There are costs associated with implementing the proposed solutions at Resort World Las Vegas. Enhancement of suite offerings will require an estimated initial cost of $31-$62 million and ongoing annual costs totaling $700,000-$1.5 million. Expansion of the convention center will need an estimated total of $205-$415 million in initial costs and a further $2-$5 million in ongoing annual expenses. On the other hand, investment in new attractions will cost total estimated initial costs of $100-$200 million and ongoing annual costs of $7-$20 million.

The estimated costs to implement all solutions could range from $336-$677 million initially, with $9-$25 million in ongoing annual costs. However, the potential increased revenue, profitability, guest spend, and valuation resulting from these enhancements, expansions, and investments are expected to far outweigh the associated costs over the first 5-10 years, according to pro forma projections and industry research.

Possible Risks

The proposed solutions for Resort World Las Vegas could face several possible risks to some in implementing the proposed solutions. However, with prudent planning, scenario modeling, mitigation strategies, and adaptability, most risks can be managed while still pursuing bold opportunities for growth. The possible risks that might be occasioned by the implementation of the proposed solutions at Resort World Las Vegas include the following:

1. Cost Overruns: Construction and development projects often incur cost overruns due to unforeseen issues, delays, or additional requirements. According to industry reports, the estimated costs for convention center expansion, attraction build-outs, or suite construction could increase by 20-50%. Securing enough financing to cover potential overruns would need to be planned for upfront.
2. Project Delays: unexpected challenges such as pandemic-related supply chain issues, permit approval backlogs, labor shortages, or weather events could stall projects for 6-12 months or longer. Delays would postpone revenue generation and impact the timeline, Budget, and financing.
3. Economic Downturn: A severe or prolonged economic recession could decrease visitor spending, occupancy rates, attendance, and event business. Reduced customer demand poses risks to investments’ revenue and ROI potential, especially during the first few years after openings. Operational costs would also need to be controlled in a downturn.
4. New Attraction Obsolescence: Trends in attractions, experiences, and guest preferences could shift more rapidly than anticipated, causing new interests to become outdated or seem uninspiring soon after opening. This would limit the ability to drive long-term revenue and foot traffic through the new assets. Frequent innovation would be required to stay ahead of trends, increasing costs.
5. Stiff Competition: New attractions, suites, convention centers, or other developments at competing resorts could significantly impact the potential for success by providing comparable or better options. Competition threatens to limit the ability to generate visitation, room nights, events, and rates, especially around the time of opening new assets. Enhancing the solutions’ unique position and perceived value would minimize but not eliminate the effects of competition.

How success will be measured

Measuring progress against broad goals and key metrics will determine how effectively Resort World Las Vegas is repositioning itself as the preeminent ultra-luxury destination through new investments in suites, convention center expansion, and guest attractions. The success of the proposed solutions at Resort World Las Vegas will be measured through key metrics and indicators such as revenue growth, occupancy rates, guest satisfaction, brand value, social media buzz, media coverage, and new customer acquisition.

Conclusion

In summary, this proposal clearly outlines the problems facing Resort World and proposes a couple of possible solutions to the problem. With an expanded conference center, better suites, and new attractions, Resort World Las Vegas can reignite local and global enthusiasm for the destination. If the solutions are implemented well, and the risks are minimized, Resort World will be regarded as one of the best resort destinations in the world in a couple of months.

References

Bloomberg. (2019). MGM Resorts Revenue, Profit and Operating Margin – Bloomberg Markets. Retrieved from: https://www.bloomberg.com/quote/MGM:US

Lovelock, C. H., Wirtz, J., Patricio, L., Piwek, L., & Del Bufalo, L. (2019). Looking Ahead to 2030: Opportunities and Challenges for the Service Industries. Journal of Service Management, 30(2), 259-279.

LVRJ. (2019). Cosmopolitan of Las Vegas’ revenue topped $3.3 billion in 2018. Retrieved from: https://www.reviewjournal.com/business/casinos-gaming/cosmopolitan-of-las-vegas-revenue-tops-3-3-billion-in-2018-1608901/

Robins, R. (2019). What Makes a Luxury Casino Resort. Retrieved from: https://www.casinojournal.com/what-makes-a-luxury-casino-resort/