Can Las Vegas Repeat History?

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Today, the massive CityCenter project on the Las Vegas Strip begins to open. When completely opened, the $8.5-billion complex will add nearly 7,000 additional lodging units to a destination that's been battered as bad or worse than any other from the ongoing economic downturn. But that's not all: Last week, the Golden Nugget in downtown Las Vegas opened a new 500-room tower, and later this month the Hard Rock Hotel will unveil a new all-suite tower with 359 units. Other projects in the market are in various stages of development, and while some (the Fontainebleau) may never open, others will.

The knee-jerk reaction to this sudden increase in the Vegas room inventory begs the question: Who the hell is going to fill all these new hotels and additions? Logic would dictate an even sharper slump for the city, with occupancies and rates plunging even lower than they've been for the past year.

But examining the city's history of the past 30 years might lead you to a different conclusion. Every time the city saw a slew of new room openings, the naysayers predicted the death of the Las Vegas resort industry. In fact, just the opposite occurred. Every new spectacular hotel or attraction served to bring even more visitors to the city, enabling the destination to soar to greater heights than any one thought possible. Who knows, Las Vegas may have another trick up its sleeve and may be able to make history repeat itself.

Again, logic may finally catch up with the city at some point, but not because of a surplus of new hotels and lodging units. Rather, Las Vegas' Achilles heel may ultimately be the limitations of its infrastructure. The airport has nearly reached its capacity and is hemmed in by the city, negating the probability of expansion. And don't get me started about the traffic. There's nothing worse than navigating the Strip on a Friday or Saturday night, or just about any night. And what about water? It is in a desert, after all, and the Colorado River can only provide so much liquid to fill the pools and fountains and Scotch and waters needed by the city and its visitors.

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