Other than adding more taps, what can a beer bar do to stand out?
To give you a silly analogy first: Roughly six out of seven people who walk into a restaurant for lunch are going to order a nonalcoholic beverage. And a majority of the people who order a soft drink will order a diet. What do most restaurants have? One diet and four non-diets. So they’re backward in the way they’re merchandising it. The same thing relates to beer. Fifty-two percent of all beer orders will be for light beer. Having a lot of taps doesn’t mean you have the right ones. Having a lot of taps, if you’re not good at marketing, is just causing confusion for the guest—they just end up ordering the Coors Light. They’re brand sensitive, not ingredient sensitive. Sometimes we try to be too sophisticated about beer.
All we do is start talking to the guest about something they know nothing about. Now we’re knowledgeable, and they’re an idiot. I’m not sure it’s smart to make the guest feel like an idiot. Sometimes we just need to dummy up, let the brands sell themselves, make sure about 50 percent of our taps fall into that light category, upsell in size, upsell in brand and don’t make the beer program so complicated the common person doesn’t want to deal with it. Nine out of 10 people just don’t want to hear it.
On one hand, there’s a growing segment of beer drinkers that’s really into microbrews, but there are also people who deliberately drink down-market—PBR, Hamm’s, etc. Are beer tastes polarized right now?
The trends show that those people [into microbrews] also consume products like Bud Light. The fact of the matter is, as many microbrews as we try, those premium light brands like Bud Light and Coors Light are still in that cycle of consumption. I gave a speech last week to 600 beer distributors in Las Vegas, and I had a slide I put up on the screen of Boot Hill. On each one of the tombstones was a beer that came and went in the past three years. Red Dog is a great example we all know. You know how many bars in America got stuck with 30 cases of Red Dog no one would order?
Does the divide in Las Vegas between where tourists and locals go to drink exist as sharply in other communities?
It does. Years ago I owned a restaurant in a tourist destination and I couldn’t get locals to go. What I did was I raised prices by 20 percent, and I gave out a locals card that gave a 20 percent discount. The tourists had no problem paying the 20 percent more. But providing that card sent a very powerful message to the local market.
Your book, Raise the Bar, focuses on what you call “reaction management.” What is that?
To me, management is the achieving of objectives through the manipulation of others. It’s not the nicest way to say it, but it’s absolutely true. How do I manipulate you? I can manipulate you through pride. I can manipulate you through fear. I can actually motivate you through your family. I can manipulate you financially. I can manipulate you by embarrassing you. I do that on Bar Rescue all the time—if I can’t get a reaction, I’ll embarrass you in public to get it.
Last but not least is confrontation. Confrontation is one of the greatest tools I have. I don’t fear it. I will scream, yell, rant, rave, be in their face relentlessly until I can create the smallest amount of doubt. If I can get them to doubt themselves for a second, that little crack, I can walk right in and change their lives. That’s where my intensity comes from, my desire to do that. I am never angry on television without it being somewhat intentional.
What kinds of bar trends have reached the tipping point?
The DJ thing. The pendulum swings back and forth. You’re starting to see it swing forth. We’re not going to see 30 percent of casino billboards with DJs’ pictures on them a year from now. People are starting to say, “Been there, done that. I can see these guys at festivals around the country.”
Nightlife is driving more and more casino revenue. If the DJ trend goes away, can nightclubs maintain that position?
Gaming drop was better when they didn’t do it this way. I get that this is a trend, and it’s something that’s causing people to visit Las Vegas. But it hasn’t improved gaming drop compared with other trends we’ve been through. My guess is the casinos would be eager to eliminate that huge expense and improve gaming drop through a different demographic.
The investments in Vegas are huge. The results are huge. Who else does $90 million a year for chrissakes? Marquee and XS. Tao is in its eighth year; it’s doing $70 million a year. The payback, the return, is unbelievable. But Vegas is a gamble. The guy across the street might spend $50 million building something. New clubs are emptying other clubs instead of bringing new people to the market.
One place the pendulum hasn’t swung is Ibiza. Is that any kind of example for Las Vegas?
They still use the word disco there. That doesn’t compare to Las Vegas at all, I’m sorry. It’s a European audience. I run the Nightclub & Bar convention. Eighty percent of the members of Nightclub & Bar are independent operators who don’t have dance floors. Las Vegas has the greatest nightclubs, but it doesn’t have the greatest bars. That, I believe, is the next step in Vegas, and I’m doing one. I want to do the World’s Best Bar—the name of it is actually World’s Best Bar. I’m working on it now.
Now that you’re a Las Vegas resident, how would you characterize our bar scene?
I know Vegas nightlife pretty well, but being here as a tourist and living here are very different things. Vegas has a sense of community and neighborhood that you don’t see as a tourist. The local bars I find are very neighborhood based. They really do hold traffic from their own backyard, within 10-12 blocks of where they are. There aren’t a bunch of people driving across town to go to bars. They’re very local, very neighborhoody. It surprised me as a new resident.
On Bar Rescue it seems like your tendency is to push bars toward the middle—upgrade their equipment and spirits, then broaden their appeal. Are you ever concerned the products are too homogenous?
It all depends on the market. What’s great about Vegas is it’s a big town. It has a good amount of food and beverage expenditure per individual, because there are so many hospitality employees. In a market the size of Vegas where people really support the industry, you can do nichey stuff. You’ll see this season the three bars we did in Vegas are all very nichey, like the zombie bar (The End at 3550 S. Decatur Boulevard).
In many, many cases, the answer is yes. When I’m dealing with these bars, the fact of the matter is these are not the greatest operators in the world. They’re not great at detailing. They don’t get niche marketing. If they were great at what they did, I wouldn’t be there. In very many cases, I’m not sure if I’m making them more mainstream, as I’m making them simpler to operate. My job is to minimize risk and maximize opportunity. Those are not abstract terms. Those are very specific demos I target, spending patterns that I try to tap into. In very many cases, the broader I can position the operation, the lower risk I’m making.