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Fri 7th Apr 2017 - Las Vegas Friday Opinion special
Subjects: Welcome to the Wynn – the ultimate expression of Las Vegas luxury, suspend your stylometer – you’re in Vegas baby, and welcome to fabulous?
Authors: Mark Stretton, Dan Einzig and Kate Nicholls

Welcome to the Wynn – the ultimate expression of Las Vegas luxury by Mark Stretton

The Wynn hotel complex embodies the luxury to be found in the Las Vegas of today. Glamorous, ostentatious and excessive, it graphically illustrates the ambition that abounds in these parts. It reflects a city that delivers on a scale matched by few other international cities or leisure destinations anywhere in the world.

The hotel is the life’s work of Steve Wynn, a key player in the emergence of Las Vegas as America’s playground. Prior to creating the ultimate expression of Sin City’s high-end exuberance, Wynn had a hand in the construction and operation of a string of landmark resorts such as Golden Nugget, The Mirage, Treasure Island and the Bellagio.

Built in 2004 at a cost of $2.7bn (£2.2bn), the Wynn features 5,000 bedrooms and suites, with occupancy regularly running well above 90%. In addition to extensive gaming areas and high-end luxury retail (every hotel in Vegas seems home to a shopping complex of some form), the hotel boasts nine fine dining restaurants, eight casual dining eateries, six bars and lounges, and three nightclubs (including XS, voted the number-one club in the US for five years running). It also has 220,000 square feet of further events space in its conference centre. It is the most admired food and beverage programme on the strip, and during our time in Vegas with the ALMR and Propel, we were lucky enough to be given a guided tour of much of it by British-born director of fine dining Warren Richards.

Like everything else in this city, the numbers are over the top. The Wynn’s food and beverage operation alone generates more than $500m in annual revenues. Average spend at its highest-end restaurants is near to $200 per head. Its buffet, featuring 15 cooking stations, serves close to a million guests a year. The nightclubs are set up to (and do) take $1m in a single evening at peak times.

What really has an impact is Wynn’s striking focus on creating unique experiences. From the several destination restaurants that overlook the “Lake of Dreams”, which every night transforms into a visual and audio spectacular complete with 12-metre waterfall and two-metre singing frog (true story), to the raft of “unique” experiences to sate all sorts of curiosities, guests can learn to spin records with a star DJ; make pasta with Frank Sinatra’s granddaughter; master the art of the selfie with an internationally renowned stylist, or indulge in oyster “happy hours” (please enjoy responsibly, of course. Actually, we’ll sell you every last one, if you can pay).

However, the story of Steve Wynn, and Vegas itself, is best illustrated not by the grandeur of what lies within the four walls of the Wynn hotel but what sits outside, beyond the terraces, pools and waterfalls. A dramatic 18-hole golf course, built in 2001 – somewhat incongruously given its desert location – is every bit as stunning as the rest of the resort, and seemingly every bit as appealing as anything we will see at Augusta this weekend. At $500 per round, it promises to be (almost) as good.

Yet the golf course is not paying its way (strictly in Vegas terms) and will be ripped up to make way for Paradise Park, the third chapter in the development of the Wynn (the second was Encore, a $2.3bn, 2,000-room second tower added in 2008). Paradise Park will feature a 15 to 20-acre lake, with a ten-storey island in the middle that guests can access by ferry, daily water-ski and fireworks shows, boardwalks with shops, bars and restaurants, plus 1,000 more hotel rooms and residences. It’ll be “just like Disney”, according to Steve Wynn.

The development will cost something like $1.6bn but will unlock massive value. Analysts suggest the Wynn’s golf club currently generates annual underlying profit (Ebitda) of $5m, whereas Park Paradise could bring in an extra $300m to $400m a year. A luxury water park accessible from the strip will again raise the stakes, even by Vegas standards. It also speaks of a place no longer built just on gaming but on food and beverage, leisure and experiences.

It’s a city that never sleeps and never stands still. It’s the ultimate sales and marketing machine, always scheming, always plotting, working out how to take more money today than yesterday, and more again tomorrow. Whether it’s the kiosks on the strip hawking iced daiquiris or one of its leading moguls plotting a monolithic project like Paradise Park, there is an unrelenting focus on the commercial rigour of prizing dollars from pockets – whether the pockets belong to people who have a lot or those that have saved hard to be here.
Mark Stretton is managing director of Fleet Street Communications

Suspend your stylometer – you’re in Vegas baby! by Dan Einzig

I was lucky enough to join the merry Propel/ALMR band of hospitality operators on the recent tour of Vegas and it got me thinking, what is it about Vegas that makes it so successful from a food and beverage perspective?

Vegas is very impressive. Our guides, the local experts who showed us around, opened our eyes to the back-of-house operations and the high-level deal-making, the real workings of the hospitality world in Vegas. The numbers they happily shared with us were off the charts. According to Jeffrey Frederick, a local hospitality consultant who gave us a fascinating insight into the numbers of Vegas, if your cafe is only doing $10m on The Strip, you’re likely to be in trouble.

The Las Vegans love impressing with huge numbers, but then everything in Vegas is huge – hotels, resorts, staff numbers, it’s all super-sized and designed to impress. In Vegas, people like to show off and this applies to the corporate culture. We learnt hospitality is now generating more income than gambling. Then again, we were told that by hospitality directors, not gaming directors! My Spidey-senses suspected some of the numbers might be overinflated even for Vegas, because Vegas is all about perception. Poker play, it seems, is not confined to the tables, it extends to the hospitality game. One of the lessons of Vegas is – don’t take everything at face value.

From a design perspective, Vegas is unlike anything else in the US, or the world. It’s hospitality on steroids. Las Vegas drew a record number of visitors last year, 42.9 million people, even more than tourism officials predicted. The Las Vegas Convention and Visitor Authority said only 16% were first-time visitors, which means a staggering 84% are return visitors. Why? Because it’s the ultimate in “escapism”. It’s set up to give people licence to let loose, to take risks, to be like Vegas – over the top. It feels like the adage “what happens in Vegas, stays in Vegas” has permeated the resort culture.

Vegas is actually one massive resort. I found many of the casinos were starting to look the same and the hotels themselves can blur together too. The Venetian stands out with its canals but it’s easy to get confused and think you’re at Caesar’s Palace, unless you’re in a gondola.

What stands out design-wise is the sheer quality of execution. There are outlandish themes, and nothing is subtle. Indoor canals, fake ceilings, giant singing frogs. It would be ridiculous in the real world but Vegas is not the real world, and the resorts get away with it because the standards are so high. World-class designers and huge amounts of money are spent on the fit-out and finishes. It’s not tacky, because it’s so high end. The Eiffel Tower’s proportions, colour and texture are so faithful in design and reproduction, and the quality of details and fit-out are seriously impressive. It could be so awful and yet, as escapism, it works.

We are regularly told millennials demand authenticity and integrity – yet they are there in Vegas, a place you might think would be the antithesis to integrity, except you’ll find authenticity in the quality of design and execution of its resorts.

If you go, be prepared to be seriously impressed by service as well as fit-out. It’s carried out to military standard because there are armies of staff. As with the rest of Vegas, it’s service on steroids.

In the casinos it’s another story. Other than at the Wynn, the gambling halls are generic. You could be anywhere. Several of us were struck by how unhappy so many of the people gambling looked. You imagine a casino as a glamorous lifestyle like Monte Carlo and Casino Royale, but we noticed a numbness and isolation in the casino – the absolute validation of gambling loneliness.

However, it’s the opposite in the bars, clubs and restaurants – everyone looks happy, euphoric even. They are having a truly great time.

This confirmed something I’ve been thinking about recently in terms of what makes hospitality brands work – it’s all about togetherness. As operators focusing on product delivery, the powerful feeling of togetherness can often be overlooked in hospitality. Being with other people in the clubs and bars and restaurants and having a great time with your friends is a massive part of what makes places work. It’s the crucial element to any successful food and beverage brand and, because of the contrast with many of the gamblers, its importance is demonstrated so well in Vegas.

The canals, gondolas and replica international monuments may be cringeworthy, but in Vegas your style compass gets put to one side. Because you’re there on an escapist trip, surrounded by friends, colleagues and other people having an equally escapist time, you simply suspend your stylometer – “cause you’re in Vegas baby!”
Dan Einzig is chief executive of leading restaurant and brand design agency Mystery –

Welcome to fabulous? by Kate Nicholls

The ALMR/Propel study tour took a detour this year, forsaking a trip to the National Restaurant Association conference in Chicago for the bright lights of the Bar & Nightclub Show in Las Vegas, with more than 35 delegates experiencing the best in US entertainment during a packed three-day schedule.

Chicago is known as a foodie hot spot – it typifies mid-market, middle America and is therefore a testing ground for many new concepts and a fertile and innovative marketplace. Las Vegas is its brash, flash cousin – more style than substance, a tourist destination with a transient consumer and a triumph of money over taste. It is living proof Coco Chanel was wrong in claiming you can never be too rich or too thin. From a concept perspective, it is anything but cutting edge.

So was it fabulous – bigger and better like the Elvis celebration – or was it The Killers’ more jaded view? The answer was somewhere in between. Vegas has many faces, it is like nowhere and nothing else, but it offered some interesting and valuable learnings to take away. In a market that doesn’t have to try too hard and is awash with cash, it proved many industry truisms – and in other cases it subverted many of our assumptions.

The tourist Vegas is a competitive, crowded marketplace with visitors ready, willing and able to spend on their experience. The 23 casinos attract more than 790,000 visitors a day, with an average daily spend of $15m. With stats like that you may be forgiven for assuming – rather like our Valuation Office does about trade in London – that you simply open your doors and visitors will come and the normal pressures of business won’t apply. Going around the venues, I was surprised how many of them did.

One nightclub operator of a leading casino resort spoke about how margins mattered. True, he was describing the mark-up on a $15 bottle of vodka the club retailed at $200 as “favourable”, but the focus on margin maintenance and minimising waste was common throughout a number of venues.

At the clubs, it was about securing margin in order to invest – at a macro level about investing in the outlet, frequent refurbishments, keeping it fresh, doing something different or bringing in the next big DJ. It was also about the day-to-day investment in free entry and drinks for women and customers that are seen to be key to the business. It was also about monetising every aspect of the business, taking “sweating the asset” to a whole new level, paying to occupy a seat or space by the hour, introducing a minimum spend level at a small bar with the best view.

The operator also described how hard his company worked to market itself and proactively seek customers. Vegas is a destination and many west coasters will plan a big night out or weekend away there. The larger businesses left nothing to chance – they were scouring social media to pick up those conversations, groups planning a trip and acting on them, offering special deals to encourage customers they wanted to visit their restaurant, bar or nightclub. If a business that is already seen as “must attend” with queues around the block can do it, there are lessons for smaller companies too.

In a crowded and competitive marketplace – with multiple eating-out venues in one small space – the restaurant operators also talked hard about differentiating themselves and their offer. The taxi drivers may tell you it is all about location, location, location but in reality it was about segmentation, segmentation, segmentation. Know your market, identify your USP and market that rigorously – stick to the knitting, but writ large.

It was what allowed the same restaurateurs to provide their own competition – think Dome and Cafe Rouge side by side on the high street in the 1990s but with added glitz. We visited five Mario Batali and Joe Bastianich (B&B) outlets in one casino – from high-end fine dining to burger and pizza. B&B is used to doing things on a big scale and hosting multiple eateries in one location. It is the partnership behind Eataly – the Chicago branch alone is 63,000 square feet and had an initial $20m investment. Here, the company rigorously segmented and marketed the different customer experiences and used the breadth of offer across the five sites to maximise margins and minimise waste – offcuts of the premium-aged steak in the fine dining restaurant were used to create top-end burgers in the diner; a toe-to-tail approach fed the mid-market restaurant with hand-crafted salami and charcuterie.

The other common truism writ large was that the guest was paying for the experience, not the product, and the venues were monetising that experience by taking a chance on pricing, or being flexible on pricing, to create an aura of must-attend or exclusivity. Clearly this works in a market like Vegas, where investment in the experience is high from both parties. However, the mindset and ultra commercial approach to selling and commoditisation can translate more widely. It could also be seen in the neighbourhood cafes and restaurants off The Strip, where residents ate. Making people wait a short while, appearing to work hard to squeeze them, talking up the locals and regulars.

And no visit to the States would be complete without talking about service. I have seen a polarisation in recent years – in tipped environments, the service continues to be very good but where there is no chance of earning any money off the back of your customer interaction, the service was actually poor in Vegas. The quality of service and execution was also high in the roles where there was a focused and structured training programme – and this may be down to the high degree of unionisation and the fact collective bargaining is the norm.

On the second day, we visited the Culinary Academy of Las Vegas to discuss the role of training in service standards and quality. A dedicated facility, it is funded largely through union backing and a training levy that came out of collective bargaining. Unlike our Apprenticeship Levy, this is seen as a positive mechanism.

More importantly, the training and qualifications the academy offers are seen as key to getting not just the best jobs but any job in hospitality in the city, and there is a focus on continuous professional development. The programme focuses on housekeeping, kitchen and front of house only but interestingly there is a high degree of fertilisation and movement between the three strands. A basic qualification in one is seen as an entry level to allow workers to get to the higher-level jobs in restaurant or hotel management.

It is a world where a job in hospitality is an aspiration for a school-leaver, where a qualification is essential to get an entry-level job, where jobseekers are asking about career progression and where the answer to the question of ‘how can I get a management job?’ is to start by training as a kitchen porter or basic housekeeper – perhaps Vegas is fabulous!
Kate Nicholls is chief executive of the Association of Licensed Multiple Retailers

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