Mirage Resorts Plans Family Hotel in Vegas : Gaming: The $300-million Treasure Island complex is expected to intensify competition in Nevada’s biggest entertainment oasis.

Mirage Resorts Inc. said Tuesday that it will build a $300-million family oriented themed resort in Las Vegas, escalating the fight for family business in the Nevada gaming and adult entertainment oasis.

The Las Vegas-based company, which owns the Golden Nugget casinos in Las Vegas and Laughlin, Nev., said its latest mega-casino--to be called Treasure Island--will have 3,000 guest rooms and will be located adjacent to the Mirage, the firm’s flagship casino and resort.

The new resort is expected to open in mid-1994, Mirage Resorts said.

The company joins a long list of gaming firms entering the burgeoning family entertainment market in a city once viewed as an adults-only vacation spot. Circus Circus Enterprises Inc. in June, 1990, opened the Excalibur, a 4,000-room hotel and casino that has a medieval theme and offers substantial non-gaming entertainment. Circus Circus is expected to announce soon that it plans to build yet another property.

In addition, MGM Grand Inc., which is controlled by Beverly Hills investor Kirk Kerkorian, this month began construction on a $600-million, 112-acre complex in Las Vegas that will include a 5,000-room hotel and a theme park.

The Mirage Resorts announcement is another sign of changing times in Las Vegas, said Manny Cortez, executive director of Las Vegas Convention and Visitors Authority.

“Because of the proliferation of gaming around the country, the local casinos have decided that they can survive only by expanding and diversifying to attract a broader (spectrum) of people,” Cortez said.

However, the building boom is expected to create a competitive shakeout in Las Vegas. The city has about 77,000 hotel rooms, a 20% increase over the past two years. With just the announced expansion plans, Las Vegas would have an additional 10,000 rooms by 1994, said Willard Brown, a gaming industry analyst at Dean Witter Reynolds in New York.

“The smaller casinos and the casinos with weaker management are going to face some tough times,” Brown said. “By 1994, a number of casinos will be barely hanging on, some will be purchased by larger operations and some will head into bankruptcy.”

However, some casinos are already feeling the competitive pressure. The hotel occupancy rate thus far in 1991 is 80%, compared to 86% for the same period in 1990. Casino revenue growth in 1991 is about 3%, compared to about 10% a year earlier, said Walter Tyminski, an industry analyst who contributes to Resort Management Report, a trade journal published in Midlothian, Va.

“Besides (new) construction, business has never recovered from the downturn that occurred during (the Gulf War) and slowdown in the economy,” Tyminski said.

However, Mirage Resorts Chairman Steve Wynn said Treasure Island will allow his company to enter the lucrative lower-priced, family-oriented market. Room rates at the new property will average $40 a night, he said. The Mirage, a 3,000-room, $630-million hotel and casino that opened in November, 1989, caters to the upper end of the market, with rooms averaging $120 a night.

Some major casino stocks dropped in Wall Street trading after the Mirage announcement. In New York Stock Exchange composite trading, Mirage closed at $24.50, down $1.50. In other Big Board trading, Circus Circus fell $1.25, closing at $34.125, while Hilton slipped 12.5 cents to $42.875. However, Caesars gained 87.5 cents to close at $32.375.