Las Vegas Power Brokers
From the Print Edition:
Kevin Costner, Nov/Dec 00
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It wouldn't have made sense even five years ago, but that's the past. In Lanni's mind, the future of Las Vegas looks like the future of Palm Springs or Miami Beach, but with world-class gaming, too. Priorities have shifted. "There was a time when everyone basically said, 'The casino is where the income is, everything else is a gift.' That has long gone," he says. "People are willing to pay for quality. Someone's going to do something with the Tropicana, we're going to do something very special with our 55-acre casino site where the Boardwalk is, and they're all going to be special, they're going to be very high quality."
When I questioned the market's capability to support more five-star restaurants and luxury boutiques, Lanni broke into an enigmatic smile worthy of the Rembrandt behind him. "They built the DC-3 aircraft and they said, 'That's it, nobody will go beyond that. Look where we are now. Never underestimate the creativity of people," he said, wagging a finger. "Especially here in Las Vegas."
Under the old calculus, Las Vegas accepted conventions grudgingly because conventioneers didn't spend enough time at the gaming tables. And the city offered the typical conventioneer little that he wanted. Traffic on the Strip was difficult to manage. The one or two restaurants worth eating at were always full, and how often could you have the osso buco at Piero's? The city's image was all about naughtiness, strip bars and cabarets, and mob deals. If you brought your family, there was nowhere to stow the kids while you gambled. Cable television fare was perfunctory. The hotel rooms didn't even have minibars.
Sheldon Adelson's epiphany was that Las Vegas could be the greatest convention city in the world. All it needed was a self-contained 3,000-room resort with a convention hall, and enough amenities to keep guests happy. Rooms would be spacious, with business facilities such as two-line phones, faxes, and plenty of outlets for laptop computers. Public areas would be extraordinary, the equal of any hotel in the world. He envisioned a replica built to scale of the world's most astonishing city, Venice. Then he built it, complete with gondoliers, soaring arches and marble everywhere.
He included shopping for spouses, better than they'd get in convention cities like New Orleans or Orlando. He installed a world-class spa, Canyon Ranch, right there in the building. You never had to go outside, so a visit in the searing heat of August wouldn't be any different from one at Christmas.
He gathered the restaurant business under one roof, a dozen venues from which to choose for those expense-account dinner parties, and more than enough seats: 4,000, as opposed to the 1,500-seat standard for a property of that size. New York's Lutece, Santa Monica's Valentino and San Francisco's Postrio all opened outposts in The Venetian, as did star chefs Stephan Pyles of Dallas, Emeril Lagasse of New Orleans and Joachim Spilchal of Los Angeles. He was right. How could the real world compete?
"This is a fantasy experience, coming to Vegas," says Michael French, The Venetian's senior vice president for operations. "We equate staying at The Venetian to being in a movie. It generates emotional responses." Adelson is a self-made magnate who invented the annual COMDEX electronics trade show and sold it to the Japanese for almost $1 billion. Mention that he followed in Wynn's footsteps and he'll bristle. Then he'll laugh, because The Venetian remains one of the most profitable hotels on the Strip. "Everybody ridiculed me because I wasn't swaddled on that green felt cloth," he says. "I tell my competitors that they're not just in the gaming business, they're in the hospitality and entertainment business. They're beginning to understand."
Adelson knew that conventioneers tend to pay full price for hotel rooms, not the discounted rate offered for weekend junkets. It's no accident that The Venetian's $185 average daily room rate is among the highest in the city. "In Vegas, everybody's challenge is to fill midweek, so they rely on the tour business," he says. "You were guaranteed a room at Circus Circus for $29 a day. The hotels figured they'd get it back in gambling. Conventions pay $200 and up for hotel rooms around the world, and they pay it here, too. And most conventions are during the week, which is my slow time."
What conventioneers get in their mini-suite at The Venetian is a product commensurate with luxury hotels everywhere. It may not be the equal of the Ritz-Carlton and Four Seasons, as Adelson claims, but it's a level above anything Wynn has developed. "I was the first guy to put in safes, minibars, faxes, a 130-square-foot bathroom, two sinks, a frameless glass shower," Adelson says. "When the Mandalay Bay was built, their architects and designers came over with cameras. They copied my bathroom. I guarantee you, you'll see a lot of Sheldon Adelson's innovations in Steve Wynn's new property, whatever it turns out to be. Anyone who builds a high-end property from now on will use The Venetian as the standard to live up to."
Adelson employs nonunion labor, and he rents his restaurant spaces for a percentage of the revenues. He has rankled the Vegas old guard, but money makes up for missing out on parties. "We have conventions that have been there twice already since we opened, once in '99 and once in 2000," he brags. "Everybody makes their restaurant reservations months in advance--one night at Lutece, one night at Valentino or Postrio--for their parties. I'm putting up another 1,000 to 1,800 rooms because I'm running at 98 percent occupancy. And in two and a half years, another 3,000 rooms. And 15 more restaurants."
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