Since CityCenter's premier audience will be the customers to which MGM Mirage already markets its Vegas hotels, those resorts which are in the same price range stand to feel the impact first. For instance, Mandarin Oriental could steal customers from the Four Seasons (at Mandalay Bay). Aria and Vdara will directly compete with Bellagio, primarily, but also THEhotel (MBay again).
MGM Grand, The Mirage, and MBay may have been hit already, as their average prices are settling firmly into the mid-market range, at $70-$89 night, according to Las Vegas Advisor's end-of-2009 roundup of room rates. (Note that these rates were researched to coincide with what's traditionally the cheapest time of the year, however.)
Eugene Moehring, professor of history at the University of Nevada-Las Vegas and author of Resort City in the Sunbelt: Las Vegas 1930-2000, puts it thusly, "Whenever you open a new hotel, you drain some of the existing ones. Steve Wynn found when he opened Bellagio that he lost a lot of business at The Mirage."
Moehring sees CityCenter as the beginning of an entirely new phase in terms of the types of resorts built here. As such, he thinks it will be a draw, adding, "You know when The Mirage opened, it drew a lot of people. People wanted to come and see the Venetian. I don't think people really wanted to come and see the Palazzo [the Venetian's 2008 sequel] or Encore. Steve Wynn'll get mad at me if I said that but I think it's true." The Nov. 23, 1989 Mirage debut marks the beginning of what Moehring describes as the third phase in the Strip's evolution, with Encore bringing down the curtain on that third act.
However, he cautions that people who come to see CityCenter – and he believes many will – may not stay there: "You might find that older hotels like Bally's play the role the Sahara has played with the South Strip boom. You serve as a low-roller dormitory." Indeed, the New Year's Eve holiday period is seeing Vegas hotels fill 'from the bottom up,' as it were. Low-roller joints out in Primm and venerable downtown Vegas hotels are sold out, but the only fully booked Strip resort (as of Nov. 23) was the Flamingo. At CityCenter, Mandarin Oriental is already sold out, it's true, as is Four Seasons, but those are hotels with roughly 10% of the room inventory of a Strip megaresort.
The bankrupt, unfinished Fontainebleau – which was actually supposed to open before CityCenter – may be one of the lucky ones, according to Moehring, who thinks it would have been one the properties likeliest to suffer from new, high-end rivals. But, as you note, Aria and Vdara between them are bringing well over 5,000 rooms onto the market. So their biggest competition may be ... themselves. Already, MGM Mirage is offering "resort credits" for customers who book multi-night stays at the two properties. We'll see how long their top-of-the-market pricing will last.
