The safe bet when interviewing for the chance to run a major Las Vegas casino is to project a calm confidence, or slide in a touch of undignified kissing up. Even shameless groveling is more of a percentage play.
Hard Rock Hotel president and CEO Joe Magliarditi ended his interview with a dare.
“My one comment to Fred [Kleisner] was if you can find someone younger than me that has the same experiences, I would always hire the youngest candidate for this job,” Magliarditi says of his interview with the Morgans Hotel Group CEO. “If they had someone that was 35 that had similar experience, similar education, I was the first to tell Fred you should hire him, not me.”
Whether that was a bold gambit or just tempting fate, either way, it worked.
“It’s the truth,” says Magliarditi, 41. “Unfortunately or not, throughout my career, I’ve told the truth. Whether it’s going to hurt me or help me, you’ll get an honest answer.”
It paid off. On May 25, Magliarditi was named president and CEO of the property, just shy of three months after former president Randy Kwasniewski committed suicide.
Born in Lewiston, N.Y., about 30 miles north of Buffalo, Magliarditi started out in Las Vegas working for eccentric Imperial Palace owner Ralph Engelstad. It was at the Rio, though, where he gained traction. He worked for the Marnell family there, in Laughlin and at the M Resort, where he served as executive vice president and chief operating officer before coming over to the Hard Rock.
He came out swinging. Magliarditi’s first weeks saw him make a series of bold changes designed to reinvigorate the operation. His first move was a reorganization of the casino floor that saw games in the main area draped off for two and a half weeks in July. That was followed by drug testing for employees, relocation of the poker room and the announcement that nightclub/music venue Wasted Space, at the time losing money, would close.
“When you look at something and see that it’s so broke, we’ve always taken the approach that you need to waste no time in fixing it. Dragging out monumental changes is only, in our opinion, more damaging then doing it quickly and getting it over with,” says Magliarditi’s former boss, M Resort CEO Anthony Marnell III.
It’s a style that fits at a property with pressing needs. Magliarditi inherited a resort with serious liabilities. The Hard Rock is carrying $1.25 billion in long-term debt. Morgans Hotel Group, which manages the property and has a 12.8 percent ownership stake (Equity investment firm DLJ Merchant Banking, an affiliate of Credit Suisse, has the other 87.2 percent) reported in a Nov. 3 SEC filing that the property’s cash flows were not sufficient to cover debt service. (Magliarditi declined comment on the Hard Rock’s financial situation.) The state of affairs required decisive action, and Marnell knew after 16 years of working together, that Magliarditi was a good fit for a property facing challenging circumstances.
“You can’t have any fear walking into a situation like that on making the moves that need to be made for the betterment of the business, the company and the team, and eventually for your consumer,” Marnell says.
With so many changes coming so fast, Magliarditi met with the Hard Rock’s 1,400 full-time employees in groups of 30 and asked them to voice their opinions—no matter how blunt.
“I think probably about my fourth or fifth week here, I closed Wasted Space,” he says. “I had one of my employee meetings with the cocktail waitresses on the casino floor. I’m going through this whole thing like, ‘Don’t worry about my title. If you have anything to say, you see me, ask me. No one’s going to lose their job for saying that guy’s crazy. Say whatever you want to.’ “One of the days after that meeting, I was walking to my car. This cocktail waitress came up to me. She said, ‘Hey, I’ve just got to tell you, I think you’re stupid for closing Wasted Space.’ So, you know, it worked. I laughed.”
The rapid-fire changes haven’t slowed down since Magliarditi took over. He wants to make the Hard Rock like a new property by Memorial Day. The next order of business was to move promotions for Sunday pool party Rehab from the auspices of the Hard Rock Nightlife Group to Angel Management Group in July. Then in August, AMG did the same for Vanity.
The decision to turn to AMG was spurred in large part by Magliarditi’s desire to expand the Hard Rock’s demographic beyond its traditionally young customers. They’re looking for a crowd that might be more inclined to spend on rooms and on the floor, instead of just in the nightlife venues.
He says the youth-dominated Rehab reported a big uptick in customers in their mid-30s to early 40s since AMG started working with the property. He expects more of a jump in those numbers next summer, when AMG has a full season to work with. Marketing efforts for the pool party will start in the winter for the first time this year. Then there’s the ace in the hole: The Joint’s newest resident, DJ Tiësto. The Dutch party-guru played New Year’s Day, and has 10 more Las Vegas dates planned. Magliarditi spent three days with Tiësto in Spain, and thinks the residency will be a key piece of the puzzle to draw a wider range of customers.
“He’s way past what goes on in nightclubs. He believes that as well. From the time I spent with him—and I spent a long time with him—he’s not only super talented, but he’s as hard working as anyone I know,” Magliarditi says. “When I was in Spain, I saw the customer. It looked to me like [they were] 21 to 55 with Tiesto.”
Adding Tiësto to Santana gives The Joint two residents, and Magliarditi says he’d like to add two more. There are offers out to two or three other rock ’n’ rollers that he says will be aimed at appealing to both younger and older market segments, though he stops shy of naming names.
It’s all part of a vision that depends on content to draw in the customer, a necessity for a property that can’t rely on Strip-side walkthrough traffic. If all goes according to plan, Magliarditi’s overhaul of the Hard Rock will be completed in 12 months.
“Patience is not one of the things I do well,” he says with a smirk. “If I see something wrong, I want to fix it. I’d be the first to admit that.”
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