Las Vegas Power Brokers
From the Print Edition:
Kevin Costner, Nov/Dec 00
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Mandalay Bay was another daring innovation, and not merely in geographic terms. When it opened 20 months ago, it became the first hotel on the Strip with elevators that empty directly into the lobby, not the casino. "That's a departure from traditional casino architecture, which believed you had to march customers back and forth past slot machines to catch their interest," says Glenn Schaeffer, who along with Bill Richardson and Mike Ensign of the Mandalay Resort Group created Mandalay Bay. "These days, maintaining a resort ambience for our guests is as important as the casino alone."
Before Mandalay Bay, the triumverate had helped run Circus Circus, the Luxor and Excalibur, all aimed at a lower-income consumer. Mandalay Bay, with restaurants such as Aureole and high-end shopping, is the product of a decision to go where the money is. "The direction of the marketplace here is toward the baby boom consumer," Schaeffer says. "The average age of a customer in Las Vegas is 49, and that tends to be a customer who has the tastes of a sophisticated traveler and more money to spend. He's willing to spend more money for the attributes of a resort."
While Mandalay Bay is a theme hotel filled with lush jungle foliage that replicates the tropics, it also has the future tucked into one wing in the form of a Four Seasons Hotel that is owned by Mandalay Resorts, which licenses the name. "There's a very high service quotient there that can only be achieved on a small scale," says Schaeffer. "That serves the customer who is looking for what customers didn't traditionally look for in Las Vegas, which is a high degree of service."
Mandalay Bay, like all the newer properties, is a step down the road of evolution. Caesars was the first true theme hotel, opening in 1966. The new Aladdin opened 34 years later almost to the week, and it may well be the last. The implosion that leveled one of the city's most historic properties made news around the country, but the resort that has emerged $1.3 billion later is even more of a spectacle. At its center is Desert Passage, a 500,000-square-foot shopping and leisure mall set in the heart of the Strip. Tenants include high- and mid-range stores, from Eddie Bauer to Clio Blue Paris, Tommy Bahama to Greenwich Village's Blue Note jazz club.
Wrapped around the casino, Desert Passage provides easy access to the street, and to the original 7,000-seat Theatre for the Performing Arts. "We'll get 50,000 people a day passing through the shops," Aladdin president Timmins reports. "At least some of them will go inside the casino."
Timmins is the executive director of London Clubs International, the British-based entity that owns most of the Aladdin. Goldberg has a financial stake in the hotel, too, having purchased nonequity bonds for a pittance. "If it succeeds, I make a lot of money," Goldberg says. "If it goes broke, I take over a billion-dollar property." Timmins doesn't plan to go broke. He's offering gamblers a more continental experience, a casino on the European model that's more dignified than the Strip usually offers. On the other hand, the casino has varying ceiling heights and the decor of an Arab souk, which is how you know it's in Las Vegas.
He has grand plans for additional properties, presuming this one succeeds. "I think what Las Vegas has to eventually do is offer an outdoor experience," he says. "You need land to be able to do that, substantial amounts. But we've barely scratched the surface in terms of a sporting experience. Golf. Tennis. Spas. That's the future."
Or one version of it. The future is in Wynn's imagination, in Goldberg's bankroll, in Kerkorian's need to turn a quarterly profit. It's in the new development out at Lake Las Vegas, where a Hyatt offers water sports and an understated casino, and at the old Las Vegas properties, on the Strip and downtown, which have a retro appeal that rivals Miami's South Beach. It's in the collective and competitive egos of a handful of men. Americans grow up believing they can change the world. Nowhere is that more true than Las Vegas.
From the runway at McCarran Airport, one can glimpse the future, right there alongside the past. The Strip dominates the view from one side of the airplane. There's the Luxor, an Egyptian pyramid in all its mass-market glory. There's the Chrysler Building and--look!--the Eiffel Tower. As the plane ascends, the city of Henderson comes into view, edging into the thriving sprawl that Las Vegas has become. Vegas's ascension from small town to metropolis has been swift and definitive, and from nowhere is this more evident than above. But around the metropolis is land. Open land, in every direction. And long before the seat-belt sign is off, all that neon is long gone. The sheer breadth of the Nevada open space renders what man has carved from the desert almost insignificant, and reaffirms a sense of possibility in what is still to come.
Somewhere below, perhaps inside his condo, Wynn is cogitating. The next great Vegas property is already a vision in his mind. What's different from a decade ago is that he's not the only one who has such a vision. "Steve Wynn has an enormous amount of pizzazz, and everything he builds will be very high quality," says Adelson. "But he's going to need a few more tricks up his sleeve to compete with what he has already created, and what all his imitators have already created. I don't know if he can do it." Perhaps he can't. Perhaps the Steve Wynn era is over in Las Vegas. But nobody, not even a gambler like Adelson, would take that bet.
Bruce Schoenfeld is a frequent contributor to Cigar Aficionado.
THE IDEA THAT REBUILT THE STRIP
A woman named Arline Gluck dreaded spending time in Las Vegas during her husband's business trips in the mid-1980s. Because of that, it's possible to eat dinner at a Las Vegas version of New York's Aureole, Lutece or Le Cirque tonight.
The restaurant and shopping boom on the Strip is a direct result of Gluck's insight. Her husband, a Los Angeles-based developer, was at the time the chief executive officer of Caesars World, the parent company of Caesars Palace. "She'd spend time with me at the property, and there was nothing for her to do," Henry Gluck says now. "Her theory was that if there was more there for the women who didn't want to hang around the casino all day, they wouldn't be restless and want to hurry home."
Out of that came Forum Shops at Caesars, which opened in 1992 and have served as the model for generating nongaming revenue on the Strip ever since. Wolfgang Puck opened Spago, a branch of his Los Angeles restaurant, as part of the Forum Shops complex, and its immediate success astonished even Puck. It shouldn't have; there was nowhere else of quality for all these shoppers to eat.
And there were plenty of potential shoppers. After mulling over his wife's idea, Henry Gluck had stood on the roof of the hotel with mall developer Sheldon Gordon one day and counted hotel rooms within one block's walk. They discussed the inherent potential in an entertainment-driven retail environment, and their eagerness to create one grew. "The idea wasn't to just build a shopping mall, but to make the retail fun and exciting," Henry Gluck says.
He was fighting the perceived wisdom that cautioned against giving gamblers options other than gambling. "A lot of people were under the impression that any dollar that goes to retailers is a dollar that might normally be spent in the casino," he says. "They didn't understand the distinction that the money allocated for gambling is often different than the money allocated for shopping. And for restaurants."
What the Forum Shops and its imitators have done is not only provide additional revenue outlets to capitalize on the traditional Las Vegas visitor, but provide new reasons for visitors to come. "The way the industry was going and the way Las Vegas was going, I knew the increasing competitive pressure would force us to seek other revenue sources," says Gluck. "And second, the idea was to make the whole Las Vegas experience much more interesting, much more dynamic, and to appeal to more than just people who gamble."
Caesars was sold to ITT in 1995. By then, the Mirage had opened and the Bellagio, the Venetian and Mandalay Bay were on the drawing boards. All have essential shopping and restaurant components modeled on the Forum Shops that provide a major part of their allure. "I can modestly say I was ahead of the curve," Gluck says. "I think I'm generally given credit for changing the dynamics of Las Vegas, in terms of giving people more to do. Steve Wynn has said that publicly."
Now Gluck believes he's doing it again. For five years, he has been involved in a mixed-use project at Lake Las Vegas, some 20 miles off the Strip. He's co-chairman of Transcontinental, the real estate arm of the Texas oilmen Bass brothers, which is creating a development that will ultimately consist of hotels, luxury home developments and numerous recreational opportunities.
"What it's about once again is that a lot of people come to Las Vegas for reasons other than gambling," he says. "If they are offered the alternative of staying in a resort environment, they're likely to want that more than the Strip. The doubting Thomases say, 'Well, isn't all of that action on the Strip exactly what people come to Las Vegas for?' They don't understand that there's an opportunity here beyond that. All those people who are now going to Scottsdale, places like that. Why not get them to Las Vegas?" --BS
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