That might be a big gamble. Uruguay has always been overshadowed by its giant neighbors, and Montevideo's reputation as a safer and calmer Buenos Aires has not persuaded many European and American tourists to add a stop across the Río de la Plata to their holiday itinerary.
About a hundred cruise ships stop in Montevideo annually, a third from the United States, according to the Ministry of Tourism. But most passengers who come ashore do little more than feast on barbecue at the Mercado del Puerto or hop on a tourist train to a nearby vineyard. Meanwhile, Brazil and Argentina still account for more than two-thirds of visitors to Uruguay, leaving the country dependent on its beaches and hot springs for tourism earnings.
Two previous attempts to recruit private investors for the Carrasco Casino Hotel failed. The first, in 1997, was quashed by the city council; a later effort was undone by the 2002 economic crisis. Meanwhile, the biggest spenders in Uruguay continue to congregate in Punta del Este, known as the South American Riviera.
But city officials said there is reason to believe the new project could change all that. Montevideo has several luxury hotels, including the Punta Carretas Sheraton and the Radisson in the Plaza Independencia downtown. But none offer the opulence, entertainment and dinning options that keep the Conrad, in Punta del Este, hopping all summer long.
"We want a more Mediterranean-style casino," Rafael Mendive, secretary of Montevideo's Commission for Projects and Investment, said. "We want high-income gamblers."
The Carrasco Casino Hotel is only five minutes from the country's international airport, where nonstop flights from Miami now land several times a week and a new terminal is expected to open by year's end, in part to accommodate increased business and diplomatic traffic.
In addition to the Mercosur -- located by the U.S. Embassy along the Rambla, the riverside promenade -- Montevideo also hosts the headquarters of the Latin-American Integration Association.
McGourty, the Hyatt vice president, said Uruguay is a safe bet. The company is invested heavily in the region, having restored several historic buildings in South America. Hyatt owns hotels in Santiago, Chile, Mendoza and Buenos Aires, Argentina and in Sao Paulo, Brazil. The Montevideo Hyatt would be branded the Carrasco-Park Hyatt Montevideo, Hotel, Casino & Spa.
"We see Montevideo as a growth area from both a business and tourism point of view," McGourty said. "There is nobody operating on our level right now. It'll really be a huge attraction, putting Montevideo further on the map."
Benjamin Gedan is a Fulbright research scholar studying the Uruguayan media. He has reported for The Boston Globe and The Providence Journal newspapers, writing about state politics, economic development and technology. He has also reported internationally, writing from Ghana, Mexico, Uruguay, Paraguay, Panama and Belize for publications that include The New York Times, the San Francisco Chronicle and The Miami Herald. He studied International Relations and Latin American politics at Tufts University. Check out his blog here.