The Mirage in Las Vegas closes to make way for Hard Rock Guitar Hotel

It's the end of an era. The Mirage is closing its doors after 35 years to make way for Hard Rock's new Guitar Hotel.

The latest change in Las Vegas marks a new chapter for the destination city, where sports and entertainment are a bigger draw than gambling for tourists.

Jim Allen, president of Hard Rock International, told CNBC he feels honored and fortunate to be remaking the legendary integrated resort.

“When Steve and Elaine Wynn opened the Mirage in December 1989, it not only changed Las Vegas, it changed the way people viewed gambling. It became a true destination,” Allen said.

The Mirage was Wynn's first megaresort, the largest hotel in the world at the time. This week, Steve Wynn wrote a tribute to the groundbreaking property, the Las Vegas Review-Journal reported.

“In the previous 16 years, no brand new hotel had been built in Las Vegas,” Wynn wrote. “However, in the decade following Mirage's arrival in 1989, we raced to virtually double the city's capacity and became the fastest-growing city in America. To say Mirage was a catalyst would be an understatement.”

The themed resorts that followed evoke other places and times. Excalibur, Luxor and New York-New York are now aimed primarily at budget-minded visitors and families.

Paris Las Vegas overlooks a replica of the Eiffel Tower. The Venetian draws tourists with replicas of canals and gondolas. Caesars Palace, with its replica of Michelangelo's David, set the early standard for themed resorts when it opened in 1966.

But the future lies in luxury touchpoints, access to high-end restaurants, brag-worthy entertainment and high-priced sports packages.

And Hard Rock International has plenty of experience delivering it in Florida, Atlantic City, New Jersey, New York and 70 countries around the world.

The gaming and entertainment company, owned by the Seminole Tribe of Florida, purchased The Mirage from MGM Resorts in December 2022.

VICI Propertiesa gambling real estate investment trust and the largest owner of property on the Las Vegas Strip, owns The Mirage buildings and land, and says it will partner with Hard Rock to bring the new resort to life.

Hard Rock will model its Las Vegas renovation after its successful Guitar Hotel at the Seminole Hard Rock Hollywood in South Florida. Across the Sunshine State, Hard Rock enjoys a near-monopoly on gambling.

But in Las Vegas, competition is fierce. Staying relevant on the Strip requires frequent room renovations, facility upgrades and new amenities to attract not only bachelor parties and girls' weekends, but also the midweek convention crowd.

On Monday, Susquehanna gaming analyst Joe Stauff wrote: “It seems to us that MGM is stepping up its investment in Las Vegas to maximize the benefits of its portfolio's positioning surrounding all sports venues.”

In the same note, Stauff criticized Caesars for being stingy with its investments in Strip properties and downgraded Caesars' stock from neutral to negative.

Caesars is scheduled to release its second-quarter results on July 30. MGM Resorts International will report a day later.

When Mirage ceases operations on Wednesday, 3,000 employees will lose their jobs.

Allen told CNBC that he expects to hire many of them back when the new resort launches. The company plans to reopen in spring 2027.

“I think the world will be surprised by some of the artists we're already talking to for long-term residencies,” Allen said.

While Hard Rock's entrance to the Las Vegas Strip may pose stiff competition when it reopens, its closure in the meantime could give its neighbors a boost.

CBRE analyst John DeCree estimates that the Mirage closure will take nearly a million hotel room nights out of business each year.

The Strip lost another 400,000 hotel nights a year when the Tropicana closed in April and is slated to be demolished to make way for a new integrated resort and ballpark to house Major League Baseball's Athletics.

In total, 4.9% of available rooms are temporarily missing at a time when room prices and visitor numbers continue to break records.