Do traditional gaming companies have the legs to travel into non-gaming opportunities? Caesars Entertainment is betting yes with its announced plans to license and manage properties under its Caesars Palace, Flamingo, The Cromwell and The Linq brands.
In a major announcement made during the NYU investment conference this week, this moves gives Caesars the opportunity to select strategic partners to expand its global reach into gateway cities around the world.
Caesars President of Hospitality Bob Morse told HOTELS newly named President of Global Development Marco Roca is leading the development charge, which is expected to translates into two or three new deals a year. Caesars is not looking for equity stakes, but Morse did not discount investing in the right opportunities as the company does have a US$2 billion balance sheet.
Morse said the expansion of the Caesars Palace brand will always include significant entertainment components, whereas the Caesars brand is being positioned to compete with the likes of JW Marriott and InterContinental in urban settings. The boutique Cromwell brand is trying to find a home in New York City, he added.
At the same time, Morse pointed to markets like Japan and Brazil, both of which appear to be on the cusp of legalizing casino gaming and potentially great source opportunities for the Caesars brands.
Initially, the first non-gaming resorts have been announced for Dubai, where Caesars will brand and manage two luxury hotels and a beach club at Meraas’ Dubai-based Bluewaters Island development. In late 2018, Bluewaters Island is expected to become home to a 196-key Caesars Palace Bluewaters Dubai and a 301-room Caesars Bluewaters Dubai. It will also manage 200 serviced apartments and the Dubai Eye ferris wheel.
Additionally, Caesars recently announced a license with Mexico’s Grupo Questro to bring a non-gaming Caesars Palace resort to the beach along the coast of Puerto Los Cabos, Mexico.
In the gaming arena, it is part of a 50-50 joint venture with a Chinese company opening a 750-room casino resort in Incheon, South Korea. It has also recently acquired two gaming businesses in Indiana, as well as one in northern California. It is also has broken ground on a new Harrah’s-branded casino in Northern California.
In speaking to HOTELS on Monday, Morse, who has been at Caesars for four years after serving as senior vice president and COO of The Americas for IHG, said Las Vegas is performing nicely as the company with 47 properties (37 with hotels) embarks on a US$600 million investment in room renovations across properties. It is investing in entertainment experiences with Gwen Stefani, who is taking up residency at the Zappos Theater at Planet Hollywood. The company is also making substantial upgrades in F&B, particularly through the extension of celebrity chefs like Gordan Ramsey and Giada De Laurentiis.
It has also started a three-year renovation project at its venerable Flamingo property and is in the process of adding 300,000 square feet of meeting space at Harrah’s in Las Vegas.