I went out to L.A. to see my brother Peter about doing a Drink L.A. Obviously, because of the liquor laws, we would’ve had a 2 a.m. [last-call] license, plus there were driving concerns about L.A. So Peter was kind of turned off by the idea. But he was under construction for the Hard Rock Hotel at the time, and he said, “I’m going to Vegas tomorrow; why don’t you come and look at some sites?” And that’s how it started.
I came out here, and there were essentially no nightclubs—the Shark Club was here, a couple of joints on Flamingo and Club Rio. And those were certainly not modern nightclubs. So I wound up looking at a site at the corner of Harmon and Koval, just down the street from the Hard Rock, and wound up jumping on that location, which was the same spot Peter looked at for the Hard Rock Café. I wound up buying that piece of dirt—it was just desert at the time—and building the building that’s on it now.
To me, not having a nightclub in a city comes down to one of two things: The market doesn’t need one at all, or it needs one terribly. We got lucky that Las Vegas needed one terribly, and we were right on the money with that. So what I saw with Vegas was huge opportunity.
We opened Drink almost simultaneously with the Hard Rock Hotel—the hotel opened in March of 1995 and we opened in May of 1995—so we had this amazing one-two punch. That was a great time. In addition to the sales figures at Drink—which we couldn’t believe—we were stunned by the locals market. There was just a powerful locals market here—sexy, young, fun, people who wanted to go out. So pretty much from that opening weekend we knew we were on to something special, and that there was a serious opportunity here for the nightclub scene.
It was amazing when we opened Drink, because we had lines around the building and there were limos from every hotel, whether it was The Mirage, Caesars—up and down the Strip. Of course, that ultimately was our undoing, because Drink led to the explosion of nightclubs in the late ’90s. And we know the casino folks in this town, if they see something that’s successful, they want it in their hotel. So it became very difficult for a freestanding nightclub to compete with the endless budgets of a casino.
A place like Drink could never have gone out and spent the $40,000, $50,000 a month on taxicab toppers; we could never afford it. You needed the powerhouse of the casino and the casino revenue behind you to do that. If you look at places like the Wynn today, they have 5,000 rooms. It’s awfully difficult to compete with that. As I often say, yes, those are people, but really those are stomachs and livers, and they need to eat and drink every day. And when they’re staying in your hotel, that’s a captive audience. Plus it’s nice to be able to party where you’re staying. So those rooms above you are critical.
In the end, Drink was a victim of its own success, certainly, but we had a great run there. And to me, that was clearly the launching pad for today’s nightclub business in Las Vegas. Because at the time there was nothing else like it. Some 15, 16 years later, I’m pretty thankful to Peter for saying, “Come to Vegas with me!”
On bottle service:
You have to give a lot of credit to the Light Group guys, because they were all over that. And it was a major game-changer.
Everybody in this industry watches each other so closely that you don’t need to be first. You just need to react to other people doing it. So we just wanted to see how it took off, but when it did, we knew that was something that was not going to get unwound. You just gotta jump on that horse—although I remember being a little hesitant to get into it at first, mostly for social-responsibility reasons. But we joined that game because you had to. If you were in this business, you had no choice.
My first thought when I learned about the concept was it’s interesting that people are going to come to a club and spend $500 for a bottle of vodka that you could belly up to the bar and have for a fraction of the price. But this is a town of vanity purchases, and people do it all the time. They want to be sitting at a table right by the dance floor, they want to be close to the DJ, and they will spend outrageous sums to do so. A guy who comes out from the Midwest, he’ll save up all year. He wants to do it all the way. And that’s the thing that makes this town special.
What we originally did at the Palms was make it more about selling real estate than selling bottle service, whether it was a sky box at Rain, a cabana at Rain, a table at Ghostbar. Now, with that real estate charge there were bottles that were included.
I don’t have any overriding philosophy with respect to bottle service other than, if people want it, let’s give it to them, but let’s do it the right way. You can charge a lot of money; that’s OK. But there’s a certain point where you cross that line. And good operators know how to walk that line. And leave it up to the customer if they want to get crazy and want to start spraying champagne. Because this is a town where they’ll do that, and they will get excessive on their own. But it’s the consumer who will ultimately dictate the policy.
As for those who criticize bottle service, I understand their point, because there’s a real potential for abuse, not from a social-drinking aspect, but for gouging. And there’s been a lot of that that’s taken place. When club operators get abusive—and I don’t have to go into specific names—people will revolt. When everybody’s got their hand out to get through a rope or to get into a section, and then to sit down you have to buy five bottles, well, the market’s got a way of self-correcting. Plus, there’s so much competition out there today. So you might be able to get away with gouging customers, but only for so long.
At the end of the day, you should make decisions based on what you think is the right thing to do, not the most money you can make. One of the things I’m most proud of from my days at the Palms is we had incredible recidivism because we treated people really well. It was all about the customer and our employees. That goes a long way in a highly competitive, cutthroat business.
The biggest judge of success is longevity, and in my eyes, anybody can run a successful club for a year or two years. But what happens in year three and year four? That’s when you’ve got to covet those relationships and treat people well, because they remember. They’re going to remember the guy who treated you really poorly, whether it was at a door or at a table or their business policies were less than fair or unscrupulous. That, in the end, will take its toll. So for the people who want to be short-term players, that’s nice while you’re doing it, but you’re going to pay the price down the road. For me, I probably left some money on the table—I know I did. But you know what? That’s what made me feel good about running our places, and I think that’s why Rain is still open 10 years later. That’s unheard of.
I remember after 9/11, the Palms opened six weeks later and it was a scary time. But the town bounced back so quickly because people are so loyal to it. I’m just honored to be a part of this town. It’s such an incredible place to do business.
This town can do things that other towns cannot do. And it’s exciting, because people will spend money here that they will not spend anywhere else, I don’t care where. Not New York City, anywhere.
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