The Mohegan Sun resort casino in Uncasville will start work on a 300-500-room Connecticut hotel by the end of this year, according to President and CEO Jeffrey Hartmann.
Hartmann said the resort's 1,200-room hotel operates at 97 percent occupancy and the property needs another hotel to accommodate guests. A third-party developer will construct and own the facility, unlike the existing hotel which is owned and operated by the Mohegan Tribal Gaming Authority.
Casino spokeswoman Cathy Soper said the official size of new hotel and the timeline of its construction are dependent on the third-party developer. The Mohegans haven't signed a deal with any developer yet, Soper said.
In 2007, the Mohegans started significant Connecticut expansion work — called Project Horizon — that included a 1,000-room hotel, a new casino and other amenities. When the recession sent gaming revenues plunging, the Mohegans suspended the project before any significant construction had begun. In 2010, the tribe had a $58.1-million impairment charge on the halted work.
Foxwoods resort in Mashantucket — Mohegan Sun's rival in Connecticut — completed its major property expansion just as the recession hit, a project that left the casino with close to $2 billion in debt.
But with the expansion, Foxwoods also has 2,100 rooms spread out over four hotels. Occupancy over the Foxwoods' hotels runs in the high 90, said Foxwoods President Scott Butera.
Foxwoods is continuing with improvements to its various hotels, but the resort does not plan an expansion like Mohegan Sun is, Butera said.
The new Mohegan Sun hotel will not carry the Project Horizon name, as that project is dead, Hartmann said. The new hotel will be a fresh start.
The new 300-500-room hotel helps Mohegan Sun fill demand, especially when the property features major entertainment. Hartmann said when the rock band Bon Jovi held a concert in early May, the Mohegan hotel was sold out at $500 per room night.
More hotel rooms also help the Connecticut property book more meetings and conventions, Hartmann said. More hotel rooms equal bigger conventions.
The Mohegan Tribal Gaming Authority is in the midst of a significant brand expansion across the Northeast. Its Pennsylvania casino and racetrack — Pocono Downs — added table games in 2010. In early May, the authority announced a new casino property in the Catskills region of New York. The tribe also has plans for a Western Massachusetts casino in Palmer, if that state legalizes casino gambling.