As destroy/erase/improve gives way to rework/repaint/recycle, older Las Vegas hotels that a few years ago might have been imploded have gotten new leases on life. Over the past year, both the Tropicana and Plaza have been thoroughly revamped after each had been bandied about as a possible demolition candidate. Now it is the Riviera’s turn for a makeover, and the ultimate fate of the property could reveal much about the next decade or more of Strip development.
Since the Riviera remodeled its rooms just three years ago, it’s only going to need a few tweaks, not the complete refresh that the Trop and Plaza got. The Riv’s biggest problem is that their customers just aren’t spending like they used to; net revenues fell from $151 million to $79 million from 2007 to 2010. But despite the property’s plummeting profits, there’s still a lot to like about the place.
For starters, it’s on the Strip. You can stay at the Riv at an affordable price and partake in everything else the Boulevard has to offer. And the Riviera’s filled with budget-friendly amenities, from the fast-food court to a jammed $5 craps table with the rare 10-times odds. The ABC Store’s top-ticket item is a 750-millileter bottle of Ciroc vodka ($41), while a poolside cabana (complete with rafts) goes for $100 for the day. Compare that with the Encore Beach Club, where a cabana will set you back at least $2,500. Granted, there’s no DJ pumping out jams, and everyone from toddlers to seniors is splashing around, but for some that’s an additional bonus.
That part of the Riviera’s business model seems to be working: catering to a diverse range of customers, from value-seeking families to slumming-it hipsters. The new bingo room draws seniors, many of whom stay elsewhere but come to the Riv just to play.
But all of this isn’t quite enough. It’s clear that to stay competitive, the Riviera has to stand out. That’s why the property should revisit its history.
In 1984, the Riviera hired Jeff Silver to put a Strip vacation within the grasp of the masses. Early in the ’80s, a national recession and worldwide financial crisis had caused the Strip to founder; revenues and visitation dropped, and some feared the city had lost its way. Sound familiar?
Silver took one look as his neighbors across the street—Circus Circus and a McDonald’s—and realized that the people flooding both might not spend as much as the high-rollers the Riv had been chasing, but there were a lot more of them—and they were dramatically underserved. His most drastic decision was to put a Burger King inside the Riviera—the first fast-food outlet inside a Strip casino—a move that was not without controversy, as some felt it cheapened the Strip. But Silver was right: visitation to Las Vegas in the 1980s soared despite new competition, chiefly because several casinos started to court less affluent customers.
After the success of The Mirage, the lessons of the Riviera’s Burger King were largely forgotten, as resort after resort chose luxury over luggage-toting families. But as the recent downturn has shown, plenty of people still want to come to Las Vegas and enjoy themselves without having to take out a loan.
Right now, the biggest knock on the Riviera is its location. In the shadow of the failed Fontainebleau and catty-corner to the skeletal Echelon, the property is the poster child for the declining foot traffic of the north Strip. The Sahara’s closure didn’t help matters, either, and it seems clear that the proposed-and-swiftly-forgotten Silver State Arena a block to the north isn’t going to be providing 10,000 jobs—or even one—anytime soon. These are all reasons that, despite all the positives, the Riviera isn’t drawing the crowds it should.
But there’s a way to turn that isolation into a positive. How about creating an “Axis of Affordability,” stretching from across-the-boulevard neighbor Circus Circus through the Riv and all the way to the Hilton? The key isn’t just to charge less for rooms because you can’t get more. It’s to charge less as part of a strategy that welcomes short bankrolls—and don’t even think about adding an ultralounge. Don’t just go low-rent until you can get the financing to go upscale—that’s the failed thinking that doomed the Sahara. Do it because it’s a great business model, even when room rates rise again.
It might take some unorthodox thinking, but the Riviera’s done best by taking chances. If the casino wants to avoid the fate of the Sahara, it must roll the dice again.