UNCASVILLE, CT—Like owners of similar large-scale projects that are either in construction or about to begin construction in Las Vegas and Atlantic City, NJ, managers of the Mohegan Sun hotel and gaming complex here have decided to delay a second hotel tower intended to complement the property’s existing 1,200-room tower. Now scheduled to open in 2012, the new 922-room tower is being promoted as an extension of the existing hotel, which opened in 2002. But at the same time it will contain a hotel-within-a-hotel that carries the House of Blues brand name. Badding the House of Blues component, Mohegan Sun’s management seeks to attract more repeat visits by existing guests as well as broaden the property’s appeal to new guests. Plans for the new tower, budgeted at approximately $75 million, as well as an additional casino and other facilities had already been approved before the national and regional downturn began. In fact, the 64,000-square foot Casino of the Wind has been completed and work was already under way on the tower. “In the middle of things moving along, the economic slowdown began and the gaming market here slowed down considerably. It became apparent that the best thing to do before proceeding with construction of the new hotel tower was to wait for the economy to recover,” explained Mitchell Grossinger Etess, president and CEO of the Mohegan Tribal Gaming Authority, the business entity that acts on behalf of the property’s owner, the Mohegan Tribe. Operators of similar projects in other markets have come to the same conclusion. In August, Boyd Gaming Corp. put a hold on the $4.8-billion Echelon project in Las Vegas that was to include 5,000 hotel rooms, while earlier this month MGM Mirage postponed development of the MGM Grand it was planning to build on a site near the Borgata Hotel, Casino, & Spa in the Renaissance Point area of Atlantic City. House of Blues At Mohegan Sun, Etess said that 250 of the new tower’s 622 rooms will be part of the House of Blues Hotel. “The House of Blues portion will be in the middle of the building. It will have its own check in and its own elevators. The footprint of the rooms is the same as in the rest of the tower, but House of Blues guestrooms will be a different type experience in terms of design and feel,” he said. In addition, the tower will feature a House of Blues Foundation—a private club—at the top of the building. Plus, a House of Blues Music Hall, the concert venue, and a restaurant will be located on the tower’s podium level. The decision not to brand the new tower entirely with the House of Blues name was carefully thought through, according to Etess. By comparison, other gaming resorts elsewhere in Connecticut as well as in Atlantic City have made different choices. Foxwoods Resort & Casino in nearby Mashantucket, CT, for example, in May opened an 825-room tower, but chose to co-brand the entire building with a name well known from Las Vegas, MGM Grand. In another scenario, owners of the Borgata in Atlantic City developed a new 800-room tower this year adjacent to the existing building that they opted to position as a standalone luxury resort called The Water Club. “We really believe in our own brand. We believe the Mohegan Sun brand is strong. It stands for something. People are enjoying it. Consequently, we felt that having the majority of guestrooms in the tower branded Mohegan Sun rooms made the best sense,” Etess explained. “Otherwise, it could be confusing to people what exactly is Mohegan Sun,” he continued. “There will be no question it’s a Mohegan Sun Hotel that has a House of Blues Hotel within it. Even though House of Blues rooms have their own check in, should guests find themselves in another part of the complex, our operational plan is to allow them to check in or check out anyplace. Likewise, guests will have signing privileges all over the complex. We think of it as one hotel.” Once Mohegan Sun made the decision to create a hotel-within-a-hotel, the question became what was the best brand to partner with. “Which brand would be most copasetic? Which brand had values similar to ours? After considering a lot of options, we decided House of Blues was a great fit for us, both culturally and from an entertainment standpoint,” Etess said. Brand within brand A freestanding House of Blues Hotel had operated in downtown Chicago and was managed by Loews Hotels, but the building was acquired in early 2006, and the new owner, LaSalle Hotel Properties, converted it to the Hotel Sax. Twelve House of Blues Clubs continue to operate in cities ranging from Cleveland to Dallas and are currently owned by Live Nation, the concert promoter. Etess expects the House of Blues branded hotel rooms and related facilities will help attract new guests to Mohegan Sun and keep existing guests coming back. “We think House of Blues hits the 35-year-old to 55-year-old sweet spot of our primary demographic. It may turn out to be a tad younger than the demographic in the resort overall, but not a whole lot younger,” said Etess, who declined to comment on the financial details of Mohegan Sun’s arrangement with Live Nation, and specifically if the House of Blues hotel will be a franchise. One unexpected advantage is that Live Nation is also the concert promoter that books entertainment for Mohegan Sun’s existing arena, Cabaret, and Wolf Den music venues. “So there’s some synergy there,” Etess said. “House of Blues should certainly bring more headliners onto the property overall.”
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