December 7, 2024

Square Feet: As Las Vegas Evolves, Boutique Hotels Gain Status

The first of these brands appeared in February in an updated tower in Caesars Palace: the 181-room Nobu Hotel, which has the world’s largest Nobu Restaurant and Lounge and was created by the chef Nobu Matsuhisa and Nobu Hospitality, with Caesars Entertainment.

Caesars is also working with the Gansevoort Hotel Group to update another older property. Bill’s Gamblin’ Hall and Saloon, in the heart of the Strip, will be transformed into the 188-room Gansevoort Las Vegas, with clubs run by the club owner Victor Drai and a small 40,000-square-foot casino. The hotel is expected to open in early 2014.

Two other Las Vegas hotels will open under well-known boutique brands, although they will have thousands of rooms in more typical Vegas fashion. MGM Resorts International and Morgans Hotel Group will open the Delano Las Vegas late this year in an existing property owned by MGM: THEhotel at the Mandalay Bay resort. And in 2014, under its SLS brand, the hospitality company SBE will open a mixed-use resort and casino at the former Sahara Hotel and Casino on the northern end of the Strip.

Developers have turned their sights toward boutique hotels for several reasons. The convention business, which demands big-box hotels, has fallen off since the 2008 economic downturn, and smaller hotels have become a logical alternative. At the same time, the changing demographics of visitors to Las Vegas have made fine dining — a crucial component in most boutique hotels — a more important part of the Las Vegas travel experience.

Las Vegas visitors seem to have taken well to the boutique aesthetic. At Nobu, rates start at $249 a night, though they fluctuate depending on hotel occupancy. Occupancy has been in the low- to mid-90 percent level since its soft opening in February, said Gary Selesner, a regional president for Caesars Palace. In general in Las Vegas, which has added about 17,500 hotel rooms since the financial crisis of 2008, citywide occupancy has dropped to 84 percent, while rates have plunged even further, from $132.09 a night at their height in 2007 to $108.08 a night in 2012.

Several branded boutique hotels were planned even before the recession, though those projects succumbed to the economic malaise and were stalled, said Thomas P. McConnell, an executive managing director of the global hospitality group at Cushman Wakefield Equity, Debt and Structured Finance.

Elsewhere in the country, boutique hotels have been opening in the central business districts of larger cities, but Las Vegas may be particularly ripe for them as food and beverages have become more important to the way visitors — especially younger visitors — experience the city.

“Going back 20 years, for a long time, Vegas was all about the gaming floor,” said Scott Berman, the United States hospitality and leisure practice leader for PricewaterhouseCoopers. “The majority of revenues came from the gaming floor, but over time, you’ve seen retail, and food and beverage, and obviously hotels become more important to the overall economic equation.”

With megaclubs like Hakkasan Las Vegas and Light opening this month, the city’s club scene has also grown exponentially. And boutique hotels are part and parcel of that type of social scene, Mr. Selesner said.

“The demographics in Las Vegas continue to change,” he said. “There are more younger people coming for other than the traditional reason to come to Las Vegas, which used to be gambling. They’re coming for nightclubs, restaurants, and bar and pool experiences, and when they travel, they tend to stay in these boutique hotels.”

This article has been revised to reflect the following correction:

Correction: April 16, 2013

An earlier version of this article misstated the name of the chef who created the Nobu Hotel. It is Nobu Matsuhisa, not Bobu.

Article source: http://www.nytimes.com/2013/04/17/realestate/commercial/as-las-vegas-evolves-boutique-hotels-gain-status.html?partner=rss&emc=rss

Oil Giants Invest Heavily in Exploration Near Shetlands

The partners plan to drill at least five new wells over two years at a cost of about $100 million each on a project they are calling Greater Clair. Depending on the results, another seven wells could be added, pushing the cost of what they are calling an “appraisal program” to more than $1 billion.

Trevor Garlick, BP’s regional president for the North Sea area, said that if successful, the operations could develop into another major investment. BP is shedding small fields off Britain and elsewhere in order to raise cash and free management to focus on major projects.

“The area is becoming more significant every year,” he said.

Analysts think the area west of the Shetlands is among the most promising sites in Britain.

“It is among the least drilled areas in the U.K. in terms of exploration,” says Lindsay Wexelstein, an analyst at the consultancy Wood Mackenzie in Edinburgh.

The companies and the British government hope that development off the Shetlands can help offset the rapid fall of production in the North Sea, where nearly all of Britain’s fields are located — or even lead to an increase in Britain’s output. BP and various partners are planning to invest more than $12 billion over the next few years in the area, which is environmentally sensitive and where oil installations have to be built to withstand waves of up to 20 meters, or more than 60 feet.

What is attracting the companies are larger fields than are generally available in other waters to the east and south in the North Sea. New technology, as well as high oil prices, are making it feasible to extract oil that was previously undiscovered or economically unfeasible.

The Clair field, for instance, is a vast area 40 kilometers, or nearly 25 miles, long that holds an estimated eight billion barrels — a very large amount of oil by any standard.

“This is one of the areas in this part of the world where there are still giant fields to develop,” Mr. Garlick, BP’s North Sea president, said. “There is probably a lot yet to find.”

BP and its partners, Shell, Chevron, and ConocoPhillips, are already producing oil from one platform and are building larger ones at a cost of $7 billion to tap more oil to the northwest at a location known as Clair Ridge, which is scheduled to begin production in 2016. These two sections hold about half of the Clair field’s oil, the company says, but it thinks it will only extract about a billion barrels from the sections at this stage.

BP thinks that it will be able to extract about 25 percent of the oil from the first two phases of Clair. If it can repeat this performance in a third phase, Greater Clair, the oil recovered could be worth about $100 billion at current prices.

Now the companies have decided to research whether it is worth trying to tap into a series of geologically tricky fields that hold another four billion barrels, or about half of Clair’s oil, and create another production center, Mr. Garlick says.

Advances in seismic technology, which is used to produce images of the oil beneath the sea bed, make the companies confident that they can find the hidden crude.

BP is also experimenting with an injection technique that cuts the salt content of the water used to maintain the pressure in underground reservoirs and, thus, may allow greater oil recovery.

Greater Clair is just one of a group of major projects in the West of Shetlands region. BP is also upgrading a field called Schiehallion at a cost of $5 billion. The French oil company Total has a gas project in the area called Laggan, while Chevron is working on a field called Rosebank that is in the most remote part of the region.

Although Britain was once a major producer, its output of both oil and gas fell by about 14 percent in 2012 compared with a year earlier, the government said Thursday. Oil output fell below the key level of one million barrels a day for the year. By comparison, oil output averaged about 2.5 million barrels per day in 2001.

A not-so-subtle reminder of Britain’s waning oil and gas power and increased dependence on imports came late last week. A burst of bitter cold combined with the brief outage of a natural gas pipeline from Belgium led to a spike in gas prices and worries about shortages.

Because of the production declines, “Britain has become more vulnerable to shocks than it used to be,” says Catherine Robinson, a senior director at the research firm IHS Cera in London.

The sharp production drop has caught the attention of the government, whose budget includes tax relief on decommissioning — the cleanup of depleted fields and installations — and other breaks to help the oil business.

“These measures will have a profound positive impact on industry activity and there are signs they are already encouraging new commercial activity across the U.K. Continental Shelf,” Oil and Gas UK, an industry group, said in a statement.

But a comeback appears to be in the works. Ms. Wexelstein, the analyst at Wood Mackenzie, says the industry is likely to invest $70 billion in Britain from 2012 to 2016 — the most, even accounting for inflation, since the 1970s.

“We are expecting the decline in liquids production to halt and gas production to rise, “ Ms. Wexelstein says.

Rather than abandon Britain, the industry appears to be shifting into a new phase. The major producers are shedding smaller depleted fields and moving north, though the central North Sea off Scotland will likely remain the key producer for a longtime.

BP has sold off about $3 billion worth of older North Sea fields in recent months, giving the company more cash to invest West of Shetlands and elsewhere.

Article source: http://www.nytimes.com/2013/03/29/business/global/oil-giants-invest-heavily-in-exploration-near-shetlands.html?partner=rss&emc=rss