Four of Cripple Creek's largest casino operators are planning to build hotels in the next few years that could double the number of rooms available in the gambling town west of Colorado Springs as it prepares to celebrate the 25th anniversary of legalized gambling.
American Gaming Group LLC, Century Casinos Inc., Full House Resorts Inc. and Triple Crown Casinos Inc. all are planning to add rooms to help solve a lodging shortage in Cripple Creek, which has just 450 rooms for customers of its 12 casinos and other visitors to the historic mining and gambling mecca. Those rooms boast an occupancy rate of more than 90 percent - by comparison, Colorado Springs-area hotels averaged 64.8 percent last year - and sell out for special events that frequently lure thousands of visitors to the city, said Steve Kitzman, Cripple Creek's director of marketing and special events.
The shortage of rooms "limits the amount of people who come and stay in Cripple Creek," Kitzman said. "More hotels will enable us to attract and retain visitors for longer, and the quality of rooms also will go up. There will be more amenities in these new properties. We are trying to bring new attractions for visitors to see and do because we are trying to create a better guest experience. The new hotels will be an integral part of that. It will help us increase visitor spending."
The planned hotels and expansion come as Cripple Creek's gaming industry is on a roll - revenue collected by the city's 12 casinos in the first half of the year was up 3.3 percent from the same period in 2015 to $63.6 million and increased last year by 3.7 percent from 2014 to $128 million, according to the Colorado Division of Gaming.
Last year's annual increase was the first since 2012 and just the second since 2009. Casino profits in Cripple Creek last year were up 22.7 percent to nearly $6 million, just the second profitable year for the industry since 2008. The industry lost more than $60 million from 2008 to 2013.
"Cripple Creek is finally seeing the growth that is allowing many of the (casino) operators to expand," said Larry Hill, CEO of Triple Crown Casinos. "I think Cripple Creek has the need for an increase in the bed base. Given the (improved) economic climate and increases in the gaming industry statewide, now is the time to proceed forward. If I had another 100-150 rooms, I would sell those out. There is absolutely demand - these rooms will be greatly needed."
Kevin Werner, general manager of the Wildwood Casino, said the casino's owners and management "believe we can fill more rooms. Economic conditions are better. We believe with more rooms, we would all do better."
Daniel Lee, CEO of Full House Resorts, which paid $30 million May 13 for Bronco Billy's Casino and Hotel in Cripple Creek, believes Cripple Creek is on the same growth path that Black Hawk traveled during the past five or six years, when casinos built hundreds of rooms in Black Hawk.
"Black Hawk has experienced tremendous growth in the past five to seven years because they invested in hotels and restaurants," said Lee, who was CEO of Pinnacle Entertainment Inc. when it opened a 536-room hotel in Black Hawk. "Cripple Creek has some of that, but nothing like a four-star or four-diamond hotel of any size. What happened in Black Hawk is that upgraded it to be a nicer place. These rooms will help Cripple Creek evolve into a stronger destination. Black Hawk has evolved in the past five years, and you could have the same thing in Cripple Creek."
Lee sees Cripple Creek as a smaller version of Black Hawk or tiny Las Vegas, attracting big crowds of gamblers from nearby Colorado Springs on summer weekends and relying on corporate meetings and conventions to fill rooms on weekdays and during the offseason. To meet that goal, the new hotels will need high-quality rooms, plenty of meeting space and well-regarded restaurants.
He isn't concerned that the hotel projects could trigger a glut of rooms in Cripple Creek because he believes not all of the hotels may be completed, and some might be built with fewer rooms than their owners are planning. He also believes Colorado Springs gamblers can support up to 900 rooms in Cripple Creek, especially if construction is spread over several years as planned by the four casino companies.
The hotel projects, listed by when construction is planned, include:
- Century Casinos plans to convert and expand the historic and long-vacant Palace Hotel into a 30-room boutique hotel across First Street from its Century Casino & Hotel. Construction is expected to begin on the $5 million project during the fourth quarter and open late next year with a coffee shop and spa on the ground floor and rooftop lounge. Century already has 21 rooms above its casino, which features a restaurant and bar.
- American Gaming Group LLC, which owns the Wildwood Casino, plans to begin construction next spring on a 100-room, three-story hotel on a lot behind the 9-year-old complex on the north side of Cripple Creek. The company already owns the 67-room Gold King Inn and recently acquired the 17-room Cripple Creek Motel. He said the $13 million hotel would be the same quality as a "Hilton Inn or Embassy Suites" and may carry a well-known national brand.
- Triple Crown Casinos, owned by Wendy's franchisee giant Richard Holland, plans to build a 100- to 150-room high-quality hotel with conference space on a site either behind its Brass Ass Casino or another site on Masonic Avenue, starting in about a year and opening about a year after breaking ground. The project would cost $10 million to $15 million and would at least nearly double the 55 rooms the company operates at the Brass Ass and its Midnight Rose and JP McGill's casinos.
- Full House is in the early stages of planning a 100- to 200-room hotel on land it owns adjacent to its Bronco Billy's complex. The Las Vegas-based company will spend $100,000 during the next two years planning the project, which would cost $20 million to $30 million and probably would open late in the decade with meeting space and "spa-like" amenities that would ensure the property earned a four-star or four-diamond rating, Lee said.
Contact Wayne Heilman: 636-0234
Facebook Wayne Heilman