Aria, the flagship casino-hotel of MGM Mirage's $8.5 billion CityCenter development, is set to open late on Wednesday, adding about 4,000 high-end rooms to the hotel glut on the Las Vegas Strip.
MGM and partner Dubai World are banking that CityCenter -- with its clean lines and modern sensibility -- will attract visitors willing and able to pay for those state-of-the-art rooms, as well as extras like spa services, meals at celebrity-chef restaurants and shopping sprees at Tiffany and Gucci.
But the glittering complex, designed by starchitects like Cesar Pelli and Daniel Libeskind, comes as Las Vegas casino operators have lowered hotel room prices and offered discounted package deals to consumers as they struggle to attract business in a weak economy.
MGM Chief Executive Jim Murren told CNBC on Tuesday that he does not expect problems filling up Aria. We can make money even at very low hotel rates, he said.
But the specter of a price war caused by CityCenter's more than 6,000 new hotel rooms has some Wall Street analysts worried.
New properties had been viewed as more of an opportunity to expand the customer base of Las Vegas, said Majestic Research analyst Matt Jacob. But unfortunately we are still seeing declines in the markets ahead of CityCenter opening.
Aria has 4,004 hotel rooms, more than 150,000 square feet of casino space and surfaces covered with natural stone, wood and metal. It houses 10 bars and nightclubs, 16 restaurants and a new Cirque du Soleil show, called Viva Elvis, featuring interpretations of the King's life and music -- from gospel-tinged numbers to Elvis as a superhero acrobat.
Two boutique hotels opened at CityCenter earlier this month: a 47-story Mandarin Oriental and the 1,500-room, non-smoking Vdara. The Crystals mall of shops and restaurants also has been open for a couple of weeks.
I think it's wonderful, Monique Gin, a visitor from San Francisco, said of the multi-angled Crystals. It's like walking through a modern art museum.
Aria and the surrounding complex of high-rise hotels and condominiums -- the brainchild of Murren -- is quite different than the typical themed Las Vegas of glitz, faux pyramids, volcanoes and gondola rides.
It's just not my cup of tea, Chris Thompson said of the modern design of CityCenter's shopping area. She and her husband, visiting from Toronto, usually stay at Paris Las Vegas, run by Harrah's Entertainment Inc, but were staying at Wynn Resorts Ltd's namesake property, because it was such a good deal you couldn't afford not to come.
Pelli, whose firm designed Aria, said the resort's main strength is that it is not tied down by a theme.
In the beginning, a theme appears to energize the project, but it is actually a millstone. It limits the things you can do, he said in an interview.
Some analysts question whether the 67-acre CityCenter's high rises -- covered in glass and studded with sculptures and fountains -- will attract enough new visitors to the Strip.
I think CityCenter is going to be a challenge for MGM and the market, Majestic Research's Jacob said. It could be quite a while before we see those premium (hotel) rates that were a big driver of Las Vegas growth earlier this decade.
The highly leveraged company teetered near default earlier this year but was able to pull out of a downward spiral by selling assets like Treasure Island in Las Vegas, issuing new debt and securing financing for CityCenter.
Dubai World, an investment company for the Persian Gulf emirate, asked creditors last month for a standstill on $26 billion of debt mainly linked to its two property companies, Nakheel and Limitless World. Fellow emirate Abu Dhabi stepped in on Monday with a $10 billion injection.
But Dubai World's woes are not expected to affect CityCenter, for which funding is already in the bank, and a source familiar with the matter said on Wednesday that the investment company has no plans to sell either its 50 percent stake in CityCenter or its MGM holdings.
William Grounds, president and chief operating officer of Dubai World's property group, said CityCenter changes the landscape of Las Vegas and is destined to join the pantheon of great urban icons.
Because the project is a 50-50 joint venture, business siphoned to CityCenter could cannibalize profit at MGM's nine wholly-owned Las Vegas Strip resorts -- such as the Bellagio, Mandalay Bay or MGM Grand.
The good thing for the stock is that expectations are reasonably low, Sterne Agee analyst David Bain said of MGM.
MGM shares ended the day unchanged at $10.35 on the New York Stock Exchange. The stock has fallen about 24 percent this year.
(Reporting by Deena Beasley; editing by Carol Bishopric, Dave Zimmerman and Andre Grenon)