When a Korean casino operator pays $151 million for a 501-room hotel tower and slaps a Hyatt Regency flag on it, the press release says "luxury and healing." The spreadsheet says "comp rooms." Let's talk about what's actually happening here.
Two weeks after we broke down why Paradise Co. bought a 501-room tower for $151 million, the doors are open and the press releases are flying. The question I asked then is the same question I'm asking now: what happens when the VIP tables go cold?
Paradise Co. didn't buy a 501-room tower for $151 million because they needed more hotel rooms. They bought it because comping high-rollers is cheaper when you own the beds... and the math only works if the gaming tables stay hot.
