Two Way Hard Three | Las Vegas Casino & Design Blog

December 18, 2010 7:02 PM Posted by parchedearth

Nice podcast of first impressions on Cosmo. It seems as though most questions will take some time to get answers. We'll just have to wait until the opening issues are resolved and to see whether the interesting new aspects of Cosmo's design will translate into success for the property. My fear is that although many of the unique aspects like artwork and lounge areas translate into a "cool" factor that increase the attractiveness of the property, it won't be obvious to the bean-counters how they translate to the bottom line.

December 19, 2010 11:55 AM Posted by Dave

That's a good point. I'm frankly amazed that "non-revenue-producing" elements like the seating and art in the convention areas made the cut. I'm glad they did, though, and they really do serve to distinguish the convention space. There might be a premium for that.

December 19, 2010 6:20 PM Posted by mike_ch

My take on openings: we need more Family Nights soft openings.

Wynn Resorts does them. The theme park industry does them when opening new parks on an even bigger scale. Everybody else doesn't. Basically, what I'm talking about is before the Hunters and Chucks get their rooms, the resorts need a few nights where the resort is working and the staff's family and friends are given a Wonka's Golden Ticket of some kind to come in and put the place through it's paces and make sure it's ready for the general public. Wynn basically had employees from his other hotel come over to Encore and try out the casino and restaurants. In the amusement industry, the openings are even more loose given that every Southern Californian I knew had a contact who got them into a preview day for Disneyland's expansion a decade ago when they built a second park.

IT's almost pretty crazy Aria took off as well as it did given that there was no real opportunity for this stuff. While Vdara opened one day, Crystals the next, and Mandarin a couple days later, I wasn't in town but bloggers were taking pictures through Aria's entrance and windows and there were still ladders, still scaffolds, and still guys in hard hats and high visibility helmets. You can't have preview nights in those kinds of conditions. As a result, the place just began running on all cylinders the moment the paying public entered.

Cosmo ran pretty much the same way. As far as we know, there were no invited preview night guests to make sure that Hunter's TVs worked, that Chuck's room existed, and so on.

December 19, 2010 7:32 PM Posted by Javi

I actually am quite interested on Jeff Simpson's comments on how Cosmo could use a full-fledged sportsbook and poker room - I'll have to wait till next week and explore the property myself to see how it all could work out.

Otherwise, a great podcast and Steve seemed to fit in quite well.

December 19, 2010 8:44 PM Posted by Jeff in OKC

Do you know they didn't, mike, or are you guessing? I haven't seen any statements regarding pre opening prep, so, I'd ask if anyone has knowledge of that?
I love the Vegas Gang, it's a highlight of my week when it comes out. I also love The Strip, so mixing the two is kinda like the peanut butter cup.
Funny, I just realized that I haven't read a single story about the opening on the R-J or Sun sites. Haven't felt the need, since I think qthe V Gangs product knowledge is better. Thanks for everyones efforts.

December 19, 2010 10:39 PM Posted by mike_ch

That's why I said "as far as we know." Aria, we're pretty darn certain given how down to the wire everything was.

Jeff can explain his position, but I do know that if I was a casino operator between CityCenter and Bellagio, I'd go ahead and skip sports and poker. The book, particularly the dominance it gives sports when most other books in town give clear advantage to the horse races, is one of Aria's few bests even if it is a bit hard to find. And poker, well, what exactly is going to bring the biggest players out of the Bellagio room at this point?

The lack of these two elements speaks to me that the floor plan was decided on some time after Aria's opening.

December 20, 2010 7:01 AM Posted by Eric

The floor plan was certainly at least modified after Aria's opening. I remember reading that Cosmo took the criticisms of CityCenter to heart and decided to bring the casino right to the Strip on the ground level. I believe the original floor plans called for retail on the first floor, Strip-side. But criticism of CityCenter's design, the long hike through Crystals to get to the Aria casino, caused them to change plans.

December 20, 2010 7:17 AM Posted by Dave

I think the minimalistic sports book is definitely forward-looking. The idea is that you'll be watching games at any number of places around the casino floor and betting with PocketCasino. I'm sure they'll be adjusting it if it doesn't work out like they think it will, but Cantor has a year under its belt at M, so I think they've got an idea of what to do.

According to everyone I talked to on staff, Cosmopolitan had play days over the previous weekend. I had asked for an invite, but didn't get one.

The interesting thing about the opening was that the only people who were wearing nametags were vendors. Judging from the demeanor of the IGT folks I saw, everything with the server-based slots went according to plan.

December 22, 2010 4:40 PM Posted by Eric

Great podcast. Steve Friess' inclusion was a really nice touch.

A couple of points I wanted to touch on. First of all, the financial outlook for The Cosmopolitan. Obviously, it's a bleak time to be opening a new $4B resort. But looking at this from Deutsche Bank's point of view -- when they took over the project from bankruptcy, they had two choices -- either finish it, or take the Fontainblue/Echelon route and mothball it.

From what I've seen, they spent about $1.9B to finish the project. So the real bottom line question is this: how much of that $1.9B can they make back, from operating the property and then someday selling it off?

I don't think, even in their wildest dreams, DB can imagine getting a $4B return on the Cosmo. But I think getting a $1.9B return might be a more realistic goal, and makes it worthwhile for them to have finished the project.

Secondly, to the point about Cosmo "needing" a big permanent show. Does it? Jeff (I think?) raised the point about classic photos of Strip resorts, featuring Sammy and Deano on their marquees. But isn't that era over and done with? A big show is certainly a draw for a property. But does it mean that guests stay, eat, and play in that hotel? Or is the 21st century Vegas visitor used to the concept of staying at Wynn, dining at Palazzo, and going to a show at Planet Hollywood?

As an example, my all-time favorite Vegas show is "Love." Outstanding show. But I've never stayed at the Mirage, played very little at the Mirage, and only eaten a couple of low-priced meals there.

I often stay at the Flamingo. But the presence of Donny & Marie and George Wallace has absolutely no bearing on my decisions to stay there.

Just my $0.02. Absolutely, positively cannot wait for my own stay at Cosmo in late January.

December 22, 2010 5:44 PM Posted by Jeff Simpson

Eric, two points in response to your post.
First, I believe DB loaned about $700m+ to original developer Ian Bruce Eichner and then bought it for $1b+ when Eichner couldn't finish. I think they spent about $3.1b additionally (including buying it). The additional construction cost by itself was about $2b or $2.1b, and that's the number you'll see some reporters using, but I believe the real number should include the money DB spent to buy the property, because its decision to purchase and its decision to build out go together. So, when we evaluate DB's decision to buy and finish building, the question is, did the bank build something worth $3.1b or more (or that will, in the near term, be worth $3.1 billion or more)? I find it hard to believe the DB decisions to buy and build will pan out.

Second, about the my comments on Cosmo needing some kind of permanent show. I don't think Cosmopolitan has to have a permanent star or rotating cast of stars (like Caesars Palace), although that is one option. But I think it needs some kind of show, and, given its marketing direction, something unique and cool. I think many people include a property's entertainment offering(s) when they evaluate a resort, and while the importance of shows or performers has diminished over time (as clubs and lounges have blossomed), I still think star or show entertainment is important.
You certainly are right that many showgoers stay one place and see shows some place else. But other folks do most of their spending at their "home" property, and I bet a survey of where folks stay and where they go for entertainment would show a significant amount of overlap. I'm sure there are many customers like you as well. As for my reference to the classic marquees, I'd suggest that present-day marquees with "O," "Love," "Jersey Boys" and Celine Dion; regular appearances from stars like Garth Brooks, Jerry Seinfeld and Elton John and occasional shows by Kanye West, Madonna, Barbra Streisand, Lady Gaga, U2, Justin Timberlake, Brittney Spears and Beyonce would also have a big impact. I think Cosmo should try to get something that will make a big impact and not rely only on indie music acts. With almost 3k rooms, it's not the Hard Rock or Palms.
Thanks for listening to the Vegas Gang podcast and for your comments, definitely worth much more than $0.02.

December 23, 2010 7:47 AM Posted by Eric

Jeff--

Thanks for the responses. The math you provide does make it seem quite difficult for DB to get back what they put in. I'm not normally a cheerleader for banks; but I want to see the Cosmo succeed; I want DB's decision to finish the project to be vindicated in the end. It would have been dreadful if the Cosmo had been mothballed 18 months ago; a gigantic empty, half-finished complex in the middle of the Strip would have been an eyesore many times worse than Echelon or FB.

I hear you on the Cosmo's entertainment offerings. The question is, what can they afford to bring in? How big of a risk can they take? Cirque seems like it's been beaten into the ground, with the tepid performance of Viva Elvis (though a future Michael Jackson show might revive their fortunes, I suppose).

Cosmopolitan seems to be staking a lot of their reputation on musical acts, and so a regular arrangement like Caesars has, with a rotating cast of popular performers, is probably just the thing they need. But of course they're competing with Pearl at Palms, the Joint at Hard Rock, etc. for a lot of the same acts and audience.

December 23, 2010 11:47 AM Posted by Phil

I hope Dr. Dave's book has pictures or plans of what Sarno's Grandissimo would have looked like. I heard it was something like 6000 rooms and tons of fountains. Outside of the family and architects, I don't it ever was revealed.

December 28, 2010 11:02 PM Posted by Dan Short

We are really looking forward to visiting the Cosmo in Februrary. I personally love the idea of walking along the srtip and going directly into a modern casino as we do at the lesser ones like Harrah's and the Flamingo or even Casino Royale. Aria isn'the only casino with access problems. Have you tried to go to Bally's from the street? What an incredible waste of prime strip space. or even Wynn with its walk through the shopping area? Let alone the continuing walk to Encore. Seems like the newer casinos of the 2000's forgit the reason people go to Vegas, to visit the floor. Cosmo is a welcome additon to come on in and play.

Loved hearing Steve on the show. Hope he does it again.

I love to play the slots and look forward to haiving access to sports at the same time. And that little bump on the walk in to the Aria Sports book is a pain.

hope you do more shows soon.

Dan