Bellagio as the Famous Luxury Hotel of Las Vegas - Research Paper Example

Management, Research Paper Source: (MGM Resorts International, a) Source: (Sri Lanka Medical Association of North America Western Region, Executive Summary In case of asset management, the focus should be mainly on the requirements of the owners and based on that planning should be done to create value for themselves and also for the stakeholders of the hotel. This study aims to present a detailed analysis of the famous luxury hotel of Las Vegas called Bellagio, owned and managed by the MGM Mirage Group of hotels and casinos. The MGM Mirage group along with the management of Bellagio has undertaken various refurbishment activities in the hotel due to future expectations of increasing visitors and also as simple renovation activity. A range of promotional strategies have been undertaken by the management to promote Bellagio as another name for luxury and beauty. Apart from this, the environmental aspect has also been given much importance and measures to optimize the usage of natural resources have been taken. 3000 rooms of Bellagio are always occupied round the year, so it is really difficult to get vacant rooms. This depicts that the over luxurious hotel does enormous business to earn good profit. Table of Contents Executive Summary 3 INTRODUCTION 5 BELLAGIO IN LAS VEGAS 5 History of Bellagio 5 Build quality 6 Integration of Sustainable Design and Environment 7 Marketing Strategies 9 Aims, Goals and Challenges 10 Economic viability & sustainability 11 Refurbishment 11 CONCLUSION 12 References 14 INTRODUCTION Hospitality or hotel industry is becoming complex day by day, and this is the reason why asset management occupation is evolving. In order to understand the genesis and present status of the hotel asset management segment, it is important to understand the hotel values of the owners. Based on the different asset management and related aspects of Hotel Bellagio, Las Vegas, this study has been designed to understand and analyze the history, challenges, success figures, sustainability, financial value, and economic viability of the hotel. The analysis would be in pretext to the concept of asset management in the hospitality or hotel industry (Singh, Kline, Ma and Beals, 2012, p. 326). Asset management involves focusing on several tasks in the hospitality segment such as marketing strategies, guest satisfaction, maintenance, environmental efficiency, etc (THINK: Education, 2011, p.7). When the hospitality possessions are well planned and it includes all the essential assets, then it would not only create value for its owners, but also for its other stakeholders as well. The stakeholders are the employees, guests or customers, investors, owners or shareholders, and the society at large. The functions of asset management department are; firstly to look after the daily management activities of the hotel or estate, second is to preserve and take the responsibilities of the physical assets of the hotel. BELLAGIO IN LAS VEGAS History of Bellagio Bellagio was opened by Steve Wynn and his company called Mirage Resort Inc. This hotel was floated after demolition of the legendary casino and hotel called Dunes, in the year 1993. Bellagio was designed by Atlandia Design and DeRuyter Butler. The construction cost of the hotel was $1.6 billion. The cost incurred to launch the hotel till the opening ceremony was around $88 million. In the year 2000, Bellagio became the property of MGM Mirage Resorts. The hotel employed 8,000 people (Corrao, n. d., p. 53-56; Emporis Gmbh., 2012). In 2006 the casino was remodeled and the color scheme of the hotel was changed to give it a more elegant look. The hotel won AAA five Diamond Award 11 times for its restaurants and lodgings (Las Vegas Review Journal, 2010). It has been upgraded at a whopping cost of $70 million and remodeling was done for all its 2500 rooms and main towers. There are about 3,950 rooms in the hotel, 36 and the total gaming area in the casino is about 116,000 sq ft, which is spreads over an area of 126 acres. The hotel is not only known for its excellent services but also for its notable restaurants, such as Le Cirque, Picasso, Circo, and many more. Bellagio is also famous round the world for its amazing fountains which is popularly known as ‘O’ (MGM Resorts International, 2012d). Build quality Build quality means the quality and design of the architecture of the hotel, which plays a very important role in the hotel industry. The hotel which offers best infrastructure to its customers, so that the customers can sense the value and high class services which the hotel owners can offer. Las Vegas is paradise for architects because all the hotels in Las Vegas are unique in some way or the other because of their excellent designs and amazing service quality. Bellagio being the major players among them is no exception. Gaming has always been the most significant attraction. The hotel is considered among the most expensive, dynamic and exciting structure on earth. The aim of Bellagio was to focus on both presentation and scope, in order to please or impress everyone (MGM Resorts International, 2012c). The mission was to give Bellagio a Victorian, old mansion or Albert Museum look, a lot of effort was required. The challenge was to build an overwhelmingly attractive building to attract those tourists who have not visited Las Vegas, but would visit to see Bellagio. The motive was to draw the attention of non-gamers and compete with Rome, Paris or London. Bellagio symbolized romanticism and an image of the Italian architecture. It represented a softer side of human emotions. The architecture is Tuscan inspired, which consisted of an eight and half acre of manmade lake. It is also represented by a series of beautiful fountains (American Institute of Architects, 2007). The art gallery of Bellagio is also very famous, and within just eight months from its opening, expansion process was started to accommodate about 750,000 people. This was done as the number of visitors in the art gallery was expected to increase. About $7.5 million were allotted for the expansion of the art gallery (Las Vegas Sun, 1999). Integration of Sustainable Design and Environment Sustainability in design, means using resources to build an environmentally cautious structure. Nowadays several environmental norms have been set for buildings, so that the design is sustainable and safe. The function of the asset manager is to develop strategies, so that the development process is streamlined with the ecosystem. The fountain and the artificial lake created in front of the hotel is not only a structure of beauty, but it also plays an important part in balancing the ecosystem. The environment of Bellagio is eco-friendly, covered with trees and gardens, which also contains traditional fountains and flowers. The hotel also maintains a conservatory and botanical garden which has four season trees. The botanical garden is maintained by 120 horticulture staffs in Bellagio. There is a theme set to design and plan the garden every year, so this depicts that special attention is paid to the environmental aspects too (MGM Resorts International, 2012e). The environmental responsibilities that Bellagio strictly maintains are described below in details: 1. Recycle bins are provided for papers. 2. Recycle bins are also available for the beverage containers like aluminum cans, glasses, plastics, etc. 3. Cloth table cloths and napkins are used, so that paper can be saved. 4. The bartenders are instructed not to offer cocktail napkins with the drinks, unless asked by the guests. 5. The hotel has installed new water saving dishwashers for conserving water. 6. Incandescent bulbs are replaced and LED bulbs have been installed in the slot machines. 7. The electricity consumption in the hotel has been reduced by 8 million K. Wh. by optimizing the usage of building heaters, cooling systems, lighting, etc. 8. The “O” pool and the fountains use the non-drinkable water (Cruz, 2006). 9. Bellagio approximately recycles 50 percent of its wastes. 10. Heaps of recyclables are diverted from landfills through sorting of trash. 11. The transportation emission is reduced by procuring the grocery through two grocery distributors only. 12. Green fairs are conducted for the employees to teach them ways of saving the natural resources and adopt green sustainability (MGM Resorts International, 2012b). Marketing Strategies Bellagio is owned by MGM Mirage group. The design of the hotel was inspired by Lake Como resort in Italy. Bellagio was built on the ground of the legendary hotel The Dunes. So it can be said even before Bellagio came into existence, it became famous. Bellagio registered a revenue figure of $9 million just within 20 days of its opening. The hotel is occupied throughout the year with guests, celebrities, gamblers, and families. Bellagio was the first hotel in Nevada, Las Vegas to set records for quarterly sales figures. The marketing strategy or the promotional tag line of Bellagio says that they offer their visitors “The best of everything.” Though they do not have a distinct target market, but the services and their pricing is done to suit the upper middle class and the wealthy class of the society. The target age group is anything between 18 to 70 years. It has been seen that majority of the guests at Bellagio are the people from the wealthy class, so it can be depicted that the marketing strategies are designed and the services are offered to serve the high class society effectively. The income brackets of the guests in Bellagio are roughly above $60,000. So Bellagio have really high rates compared to other hotels in Las Vegas. Bellagio was a product extension of the MGM, and it was promoted among the tourists round the world as a luxurious holiday destination, which not only offers high value services, but also an exotic and beautiful place to stay. The promotion of Bellagio is done through advertisements, which is done by travel agencies. Even television ads, online advertisement, and magazines are utilized. Bellagio’s purpose for advertisements or sales promotion is to offer long-term and short-term incentives to the guests or visitors. This may range from price reduction in room rates to free spa services. They are also into direct marketing through mail marketing approach. The management not only utilizes the pull marketing strategy, but also push strategy. This can be well assessed from the website of the company, which focuses on integrated marketing communication. This promotes the luxury of the hotel to attract its customers. Since Bellagio has high brand value, so it already has a high class customer base. The goodwill is spread through word of mouth for excellent services. Aims, Goals and Challenges The aim of MGM group and Bellagio is to target the wealthy class of the society, and offer them ultimate value for their money. Bellagio is expensive and luxurious, but its guests are satisfied because they indeed get what the hotel claims to be. Bellagio offers its guests or tourists an over luxurious ambience and services. The motto is not only to offer bed for the guests to sleep, but something beyond that. Bellagio has been successful in achieving its aim of setting themselves among the highly luxurious hotels in the world. The motto was to compete with the hotel industry of London, Rome or Italy, and this motto was very well achieved. The MGM group was famous for their goodwill and exotic hotels. Moreover, Bellagio was built on the ground of The Dunes Hotel, which was also very famous. So we can say that the mission or aim of Bellagio to build overwhelming attractive structure was quite challenging. The challenges were in terms of correct designs, finances, asset management, etc. The refurbishments that took place from time to time, extensions and addition were difficult and challenging enough for the hotel authorities. Economic viability & sustainability MGM Resort International is a gaming company in Nevada, which is the parent company of Bellagio. It has generated annual revenue of $7.849 billion in 2011, which also includes revenue generated from Bellagio. It is important to analyze the economic viability and sustainability of MGM Resorts because Bellagio was build and is controlled by MGM Mirage, which is a merger of MGM Resorts and Mirage Resorts. The total asset of the company was recorded $27.766 billion in 2011. About 66,800 employees are there working under this group, which includes employees of Bellagio too. Though all the hotels and casinos under the MGM Mirage Group function as different business units and represents themselves as individual brands, but the economic strength and sustainable position of the MGM Resort International is reflected in the operation functions and marketing strategies. Refurbishment It goes without saying that hotels like Bellagio are in a continuous state of refurbishment in order to attract tourists and guests. Recently this year, $70 million was spent renovate 2,568 rooms in Bellagio. The main tower of the hotel was also renovated. The rooms which were newly designed were decorated with new colors such as indigo, plum, silver, tea green, amber and butter scotch. The hotel authorities also received excellent feedback for the same. Apart from this, the hotel suits and the spa had been also renovated in the year 2007. With the changing look of the rooms in Bellagio, the rates for the different renovated rooms were also changed. In order to maintain AAA five Diamond level, Bellagio has to refurbish its restaurants, swimming pools, spas, and other facility areas at every fixed interval. The newly renovated rooms in Bellagio has 40 inches flat screen television, an array of digital devices, eco-friendly objects such as LED lights, organic carpeting, reusable towels, and wooden furniture. New luxurious brands have been included in the shopping centers of Bellagio, so that the guests get access to luxurious brand shops within the hotel boundaries. Newly renovated Rooms in Bellagio Source: (Lollis, 2011). CONCLUSION Las Vegas is one of the most famous tourist destinations in the world which is also known for its extraordinary hotel industry. Bellagio as a brand name represents the luxury class of hotels around the world. It is owned and operated by the MGM Mirage Group, which is yet another famous name in the casino and gaming industry. Bellagio was built to compete with the hotel industry of Italy or Rome, so the design of the hotel is inspired by a famous hotel of Italy. The mission of Bellagio is to serve the upper class of the society and offer them over luxurious experience when they arrive in their hotel. Due to this reason Bellagio is beyond the reach of the mass. It is indeed very expensive and only welcomes people with heavy pockets. The renovation and addition of new restaurants or room, and even shops or spas are done to compete in the luxurious hotel industry. Bellagio has a sustainable position in terms of its financial ability. The hotel management also pays ample attention to environmental sustainability, so that Bellagio also follows the guidelines of the environmental policies stated by the government. References American Institute of Architects, 2007. 22. Bellagio Hotel and Casino (1998) - Las Vegas, NV; Deruyter Butler, AIA; Atlandia Design. [Online] Available at: < http://blog.aia.org/favorites/2007/02/22_bellagio_hotel_and_casino_1.html> [Accessed 27 October 2012]. Corrao, M., no date. Inland Architecture. [pdf] Available at: < http://inlandarchitectmag.com/pdf/Bellagio.pdf> [Accessed 27 October 2012]. Cruz, J., 2006. Desert Wars. [Online] Available at: < http://www.kued.org/productions/desertwars/cruz_jamie.php> [Accessed 27 October 2012]. Emporis Gmbh., 2012. Bellagio Resort & Casino. [Online] Available at: < http://www.emporis.com/building/bellagioresortcasino-lasvegas-nv-usa> [Accessed 27 October 2012]. Las Vegas Review Journal, 2010. Bellagio Earns 10th Straight AAA Five Diamond Award. [Online] Available at: < http://www.lvrj.com/business/ballagio-earns-10th-straight-aaa-five-diamond-award-109228354.html> [Accessed 27 October 2012]. Las Vegas Sun, 1999. Wynn to Double Size of Bellagio Art Gallery. [Online] Available at: < http://www.lasvegassun.com/news/1999/jun/11/wynn-to-double-size-of-bellagio-art-gallery/> [Accessed 27 October 2012]. Lollis, B. D., 2011. First Look: Revamped Rooms at Bellagio Las Vegas. [Online] Available at: < http://travel.usatoday.com/hotels/post/2011/08/bellagio-las-vegas-first-look-70-million-room-renovation/415587/1> [Accessed 27 October 2012]. MGM Resorts International, 2012a. Home Page. [Online] Available at: < http://www.bellagio.com/> [Accessed 27 October 2012]. MGM Resorts International, 2012b. Environmental Responsibility. [Online] Available at: < http://www.bellagio.com/files/EnvironmentalResponsibilityLocalAttractions.pdf> [Accessed 27 October 2012]. MGM Resorts International, 2012c. A Walk Through Bellagio. [Online] Available at: < http://www.bellagio.com/press-room/press-releases.aspx> [Accessed 27 October 2012]. MGM Resorts International, 2012d. Fountains of Bellagio. [Online] Available at: < http://www.bellagio.com/attractions/fountains-of-bellagio.aspx> [Accessed 27 October 2012]. MGM Resorts International, 2012e. Conservatory of Botanical Gardens. [Online] Available at: < http://www.bellagio.com/attractions/botanical-garden.aspx> [Accessed 27 October 2012]. Singh, A. J., Kline, R. D., Ma Q., & Beals, P., 2012. Evolution of Hotel Asset Management : The Historical Context and Current Profile of the Profession. Cornell Hospitality Quarterly, 53(4), pp. 326–338. Sri Lanka Medical Association of North America Western Region, 2012. Fundraiser 2010. [Online] Available at: < http://slmanawest.org/fundraiser2010.html> [Accessed 27 October 2012]. THINK: Education, 2011. HOS 201 Study Guide: Asset Management [Online] Available: [Accessed 27 October 2012]. Read More