LAS VEGAS // Aria, the most lavish and expensive hotel and casino to be built on the Las Vegas Strip, threw open its doors to the public this week amid some of the harshest US economic conditions in decades.
Fireworks and the opening party temporarily dispelled the gloom in the city, which has suffered the worst rates of job losses and foreclosures in the country.
Dubai World and MGM Mirage, the joint owners of the US$8.5 billion (Dh31.22bn) CityCenter resort of which Aria is the focal point, face a tough battle to make good on what some have called Las the biggest bet in town.
Both companies are hoping for a flow of revenues from the 27-hectare complex of hotels, shops, restaurants, theatre and casino to relieve their respective debt burdens, which runs into billions of dollars.
William Grounds, the president of Infinity World Development, the Dubai World subsidiary that partnered with MGM Mirage, was the only senior executive from the UAE group at Wednesday's opening events.
He acknowledged key individuals involved in the project, including Sultan Ahmed bin Sulayem, the Dubai World chairman, and colleagues on the CityCenter board including Chris O'Donnell, the Nakheel chief executive, and Abdul Wahid al Ulama, a senior Dubai World executive.
Mr Grounds also said CityCenter had set a new benchmark for hospitality destinations.
"I truly believe this magnificent project is destined to join the pantheon of urban icons that not only symbolise a great metropolitan area but also shape its future," he said.
MGM Mirage investors appeared unimpressed with the opening events. Shares in the company were unchanged at $10.35 on Wednesday in New York after Jim Murren, the company's chief executive, rang a bell to remotely close the stock market from CityCenter.
The resort is seeking to capture a new market of visitors to Las Vegas who want an upmarket alternative to the city's other resorts, which are considered tacky by more sophisticated travellers.
The project's budget included $40 million spent on art works, including a Henry Moore sculpture. There is also a non-smoking hotel and spa for those desiring a calmer abode away from the frenetic gaming tables.
CityCenter's sleek glass-and-steel buildings, designed by noted architects such as Daniel Libeskind and Cesar Pelli, adds some 6,000 new hotel rooms at a time when resorts are slashing rates to fill their beds.
Many analysts are concerned CityCenter will draw off tourists from MGM Mirage's other resorts on the Strip as well as from competitors before, if at all, capturing the custom of new visitors.
"New properties had been viewed as more of an opportunity to expand the customer base of Las Vegas," said Matt Jacobs, an analyst at Majestic Research. "But unfortunately we are still seeing declines in the markets ahead of CityCenter opening."
The Sahara hotel and casino complex near CityCenter said on Tuesday it would close two of its towers until demand improved. A day earlier, Binion's Gambling Hall and Hotel shut its 365 guest rooms and cut 100 jobs.
Donald Trump, the property developer who also owns a tower in Las Vegas, did not mince words when he called CityCenter "an absolute catastrophe".
"The biggest problem is it costs so much," Mr Trump said. "It cost billions more than anticipated and it's going to be hard to recover from that."
MGM Mirage shrugged off his comments. "I can hardly imagine anyone's opinion that matters less than his," said Alan Feldman, the company's senior vice-president of public affairs.
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Favourite things
Luxury: Enjoys window shopping for high-end bags and jewellery
Discount: She works in luxury retail, but is careful about spending, waits for sales, festivals and only buys on discount
University: The only person in her family to go to college, Jiang secured a bachelor’s degree in business management in China
Masters: Studying part-time for a master’s degree in international business marketing in Dubai
Vacation: Heads back home to see family in China
Community work: Member of the Chinese Business Women’s Association of the UAE to encourage other women entrepreneurs
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Capernaum (Lebanon)
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Never Look Away (Germany)
Roma (Mexico)
Shoplifters (Japan)
Mohammed bin Zayed Majlis
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UAE currency: the story behind the money in your pockets
How will Gen Alpha invest?
Mark Chahwan, co-founder and chief executive of robo-advisory firm Sarwa, forecasts that Generation Alpha (born between 2010 and 2024) will start investing in their teenage years and therefore benefit from compound interest.
“Technology and education should be the main drivers to make this happen, whether it’s investing in a few clicks or their schools/parents stepping up their personal finance education skills,” he adds.
Mr Chahwan says younger generations have a higher capacity to take on risk, but for some their appetite can be more cautious because they are investing for the first time. “Schools still do not teach personal finance and stock market investing, so a lot of the learning journey can feel daunting and intimidating,” he says.
He advises millennials to not always start with an aggressive portfolio even if they can afford to take risks. “We always advise to work your way up to your risk capacity, that way you experience volatility and get used to it. Given the higher risk capacity for the younger generations, stocks are a favourite,” says Mr Chahwan.
Highlighting the role technology has played in encouraging millennials and Gen Z to invest, he says: “They were often excluded, but with lower account minimums ... a customer with $1,000 [Dh3,672] in their account has their money working for them just as hard as the portfolio of a high get-worth individual.”
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4 Chaltu Tafa (ETH) 2:25:09
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
UAE currency: the story behind the money in your pockets
FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.
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