This is it: the opportunity that comes once a lifetime, the deal that anyone in the hospitality business takes without looking back.
Specifically, this is the chance to build a hotel on the Las Vegas Strip, backed by Kirk Kerkorian. He’ll provide the land, right across from his MGM Grand hotel-casino, which is still under construction but is going to be the world’s largest hotel when it opens. He’ll even take much of the risk. It is early 1991; all signs indicate the south Strip is on the verge of a building boom. Could anyone say no? Peter Morton says he did.
“I had the opportunity to be on the 50-yard line,” Morton says, “But I didn’t do it. Kirk is a great guy, a stand-up guy, and a man of his word. As much as I liked him, I knew that if I built with him, he would end up being the primary shareholder, and I wanted to control my own destiny. I politely and deferentially declined his offer.”
That refusal—gracious but against the current—says a great deal about Morton and the hotel he ultimately built. When the Hard Rock Hotel and Casino opened March 10, 1995, more than the mile between its front doors and the center of Las Vegas Boulevard separated it from the Strip. The hotel at Harmon Avenue and Paradise Road was built alongside the Hard Rock Café that Morton had opened five years earlier. It was small in an era when megaresorts were the norm; it catered to twenty-somethings when the average Las Vegas visitor was in his 50s; it had no family attractions at a time when casinos were opening with theme parks and indoor rides; it put everything but gambling front and center.
At the time, that north-of-50 Las Vegas visitor (and casino player) had a few dollars in the bank, and he came to Las Vegas to play slots, catch a mass-production revue show such as Starlight Express or Enter the Night, or see what might be diplomatically described as a “star of yesteryear.”
Morton’s gambit—to court a youthful customer who had passed on Las Vegas in the past—was seen as a generational shift. Wayne Newton and Engelbert Humperdinck were out; Pearl Jam and Weezer were in. This was part of the reinvention of the desert gambling oasis. The mob had given way to clean-cut corporate ownership, and the new resorts owed more to theme parks than old-style gambling houses. The changes of the 1990s are often portrayed as an attempt to remake Las Vegas as family-friendly, but it was always much more than that: Las Vegas was trying to wipe the slate clean. Rock ’n’ roll was part of that change.
Now, after more than a decade of “What Happens Here, Stays Here” leading the promotional charge, it’s clear that an adult vision of uninhibited fun was the path Las Vegas chose. Most of what’s happened on the Strip since the end of the 1990s resonates with Morton’s break-the-mold concept: a resort that catered to a younger and more affluent visitor, one who—and here’s the revolutionary change—wasn’t necessarily a gambler.
While The Mirage was the first Las Vegas casino to deliberately aim to balance its gaming and non-gaming revenue, the Hard Rock was the first to jump into that model with reckless abandon. “We made one-third of our money from the casino, one-third from food and beverage, and one-third from retail,” casino creative director Warwick Stone recalls, crediting the Hard Rock’s retail success for the boom in casino logo-branded items that followed.
The Hard Rock pointed the way to a younger Las Vegas. And it goes beyond the showroom to the nightclub boom of the past decade. Recent resorts such as the Cosmopolitan, the Cromwell and SLS are using the Morton formula (music first, dining second, gambling third)—even if they prefer Calvin Harris to Iggy Pop.
Twenty years later, it appears Morton saw into the future: You don’t see too many Nile rides in casinos today, but you do see quite a few Center Bars. This is the story of how the Hard Rock set itself apart from the rest of Las Vegas, and why Las Vegas has followed it.
What put Morton in a position to confidently say no to Kirk Kerkorian?
Morton was born into the restaurant business. His father, Arnie Morton, was himself a second-generation restaurateur, best known for founding Morton’s of Chicago, which today is a chain of more than 60 steakhouses. Peter grew up surrounded by both celebrity and restaurants.
So when he found himself in London in 1971, unable to find a good place to get a hamburger, either nature or nurture convinced him that the best response was to open, in partnership with fellow American Isaac Tigrett, an “American-style” diner with a rock-’n’-roll edge. Before long, genuine rock royalty were hanging out there. And after Eric Clapton gifted the restaurant a guitar, genuine rock memorabilia became an essential part of the diner’s décor and allure.
Morton and Tigrett’s real genius was not in the Hard Rock’s menu, but in its marketing. They had T-shirts left over from a sponsored soccer team in 1974, and they started giving them out to customers. The shirts—featuring what would become the iconic Hard Rock circular logo—were such a hit that the pair started selling them in a shack outside the restaurant. Over the years, that simple T-shirt—just the logo with the name of the host city—was followed by a flood of pins, pullovers, watches, onesies, scarves and shot glasses.
The Hard Rock Café certainly wasn’t the first chain restaurant, but it was the first that relied equally on its food and branding. Tigrett and Morton split the Hard Rock empire in 1981, dividing the United States and world into markets where each could expand. Morton got the Western United States, and he wasted no time in opening a Hard Rock Café in Los Angeles. Within a few years, he was looking to expand to Las Vegas.
When the Hard Rock Café opened at Harmon and Paradise in September 1990, it was right where Morton wanted it—and right where Las Vegas needed it. Right around the corner, the Runnin’ Rebels had just won an NCAA championship. The corridor between UNLV’s Thomas & Mack Center and the Strip looked like a land of opportunity. The Hard Rock, like the Rebels, was vital in proving that, yes, there was life off the Strip. Locals and visitors alike flocked to the new spot, marked by a giant neon guitar.
The Las Vegas Hard Rock Café was soon raking in money from burgers and bandanas. It also inspired themed imitators. The next few years saw Las Vegas openings of Planet Hollywood (itself helmed by former Hard Rock International CEO Robert Earl), Dive!, Country Star, Harley-Davidson Café, the All-Star Café, Rainforest Café, NASCAR Café, ESPN Zone and House of Blues (Tigrett’s post-Hard Rock creation).
So, what do you do in Las Vegas when you’ve hit on the perfect brand? To Morton, the answer seemed obvious: You build a hotel.
Those lucky enough to be in Las Vegas for the Hard Rock Hotel and Casino’s opening were treated to a weekend with enough Hollywood A-listers to awe even the most jaded celebrity-watcher. Morton reached out to frequent guests of his Los Angeles restaurant, drawing stars such as Jack Nicholson, Kevin Costner, Nicolas Cage and Cameron Diaz to spread some Tinseltown buzz at Las Vegas’ newest hotel.
It’s only natural that the world’s first rock ’n’ roll casino kicked things off with a concert. The Joint was packed for an all-star evening with Guns N’ Roses bassist Duff McKagan backing up Sheryl Crow, Duran Duran, Al Green and Melissa Etheridge, who performed with each other and individually. Only hotel guests and lucky radio contest winners could get into the show, but the Hard Rock set up an outdoor screen (one of only two Sony ultra-large screens in the country) and simulcast the event in its parking lot.
The concert was more than a perk for invited guests; it was a chance to announce to the world that a rock ’n’ roll casino finally existed—and that this was a good thing. The show was edited into a 90-minute special broadcast on MTV twice the following evening. It was the centerpiece of the music channel’s Hard Rock-themed weekend, with the hotel featured during other programming as well.
The Eagles stopped by the next night. They were in the midst of their Hell Freezes Over tour, and fans got to see the band, which was mostly playing arenas and stadiums, in an almost unbelievably intimate setting. Like the boutique hotel, the 1,200-seat Joint was proof that bigger wasn’t always better.
“Right away, I knew it was working,” Morton says of the opening. “There was nothing like it—no one had built for the twenty-something demographic before.”
The notion seems crazy today, but in the mid-’90s, if the Hard Rock Hotel’s viability had been something you could wager on in the sportsbook, it would’ve been a massive underdog—mainly because its blueprint was so unconventional: It wasn’t big; it didn’t have a Strip location; and it didn’t have a database of gamblers to target. Opening without any one of those things had doomed Las Vegas casinos before. But Morton didn’t see it that way.
“I thought it had a great location. I liked the autonomy of that spot. I know the traditional operators weren’t enamored with it, but I didn’t care,” Morton says. “And I didn’t want a gray-haired database.”
“We were the new kids; they said that nobody was going to gamble with us,” Stone says of the reaction from the Strip establishment. “But we’d just opened a dozen Hard Rock Cafés across the Western United States. We had an audience, a following.”
To make sure that audience got the message, guitars were everywhere—from the door handles to commemorative casino chips to actual instruments played by actual rock legends in memorabilia cases. A row of six piano-shaped roulette tables lined the walk from the door to the Center Bar. Stone didn’t invent custom-printed table felt, but his designs brought rock chic to the gaming pit.
The Hard Rock also pioneered licensed themes on slot machines. At the time, reels by slot manufacturer International Game Technology dominated casino floors with such games as Double Diamonds and Red, White & Blue. IGT wouldn’t roll out its Wheel of Fortune progressives—which are widely credited with starting the boom in licensed machines—until late 1996. So no one had really seen anything like the custom machine art Stone designed: Jimi Hendrix graced one machine, while others had more general motifs, such as San Francisco psychedelic and London punk.
When it opened, the hotel was tiny by Las Vegas standards—only 339 rooms—and the casino, at less than 30,000 square feet, was less than one-sixth of the size of MGM Grand’s. Given Morton’s dislike for a “gray-haired database,” it’s not surprising that the casino was always more about vibe than vigorish.
That meant a casino was decorated with what it proclaimed “the world’s greatest” collection of rock memorabilia. And it was loud—very loud, with a sound system pumping out the antithesis of the elevator music that was typical in town at the time. And the focus wasn’t the craps tables or the baccarat pit. It was the Center Bar. At a time when beverage service was still a loss leader for most casinos, this had no real precedent. It wasn’t like the old days at the Sands, when the Copa Lounge might get you in the door, but the games were supposed to be your focus. The Center Bar was so crowded it was difficult at times to get to the booze.
Even if people weren’t gambling much, the casino was full and the energy was off the charts, and that was all that mattered. “We had slot machines in the bar when we opened,” Stone says. “We took them out—people were just sitting on them.”
This was a kind of party that no one had tried yet in Las Vegas.
When Morton decided to build a hotel in Las Vegas, he thought he needed a partner. Even after he turned down Kerkorian, he wanted to have someone to help staff the casino. Initially, he turned to a company that had a minor presence in Las Vegas: Harrah’s had its flagship Reno location, and casinos in Lake Tahoe, Atlantic City, and Laughlin, as well as the Holiday casino on the Strip. In June 1991, Morton had announced that they would join him in building the Hard Rock Hotel.
But within a year, the partnership dissolved. At the time, it was reported that the two sides said they split “by mutual agreement.” Today, Morton claims Harrah’s reneged on the original deal, in which he would retain the majority share. “That was not the spirit of the agreement,” he says. “So I said thank you, I’m going to find a gaming partner who can keep their word.”
Having already said no to Kerkorian for the same reason, it wasn’t difficult for Morton to part with Harrah’s. He was confident in his plan, and his self-assuredness only grew with the knowledge that two of the industry’s most forward-thinking operators thought enough of him that they wanted to own more of his hotel than he did.
Still, Morton hadn’t run a casino. A partner would help him break into the business—so long as the partner was willing to yield the driver’s seat. Joe Brady at First Interstate Bank, with whom Morton had built a relationship, suggested a partnership with Harveys Casino Resorts, a Lake Tahoe-based company that was on the cusp of expansion. Harveys’ solid gaming expertise and Morton’s rock flair would, both hoped, be a winning ticket in Las Vegas. It was.
Still, Morton knew this was his vision, his place. So two years after opening, Morton bought out Harveys. Having gotten the knack of the casino business—and passed regulatory muster—Morton was ready to go it alone. Soon after, he proceeded with an expansion that would more than double the room count and add a parking garage, more restaurants and more pool space.
“For me, the first phase was a $100 million gamble,” Morton says. “I was betting that young people would be receptive. It was very gratifying to win that bet.”
During a time when established Strip giants are in bankruptcy and every dollar seems difficult to come by, there seems something almost cruel in the too-easy success of the Hard Rock 20 years ago. It’s not supposed to be this easy to make money in Las Vegas. Or is it?
The key to that paradox might be Morton’s status as an almost accidental capitalist. Unlike many of today’s Strip properties, the Hard Rock was never about maximizing the profit per square inch of his casino.
“I’m not a public company,” he admitted in a 1996 interview with Casino Executive magazine. “I’m not looking to make every last dollar.”
At the time, Morton was far ahead of the curve in instituting what a current press release would call a “green initiative,” recycling paper and glass, and giving each guest room a recycling bin. Cleaning products were nontoxic and biodegradable. Leftover food and clothing were donated to the homeless. “Save the Planet,” the hotel’s logo insisted. Café pins read, “Love All, Serve All.” Morton had a bank of slot machines with a running meter that displayed not the current progressive jackpot, but the diminishing number of acres of Amazon rainforest. A portion of those slots’ take was donated to such groups as Conservation International.
A place with those sensibilities is catnip to Hollywood stars. And celebrity was part of Morton’s design: He wanted to build a place that was intimate but glamorous, a conscious throwback to the Rat Pack days. The days when you could play craps next to, say, comedian Sandra Bernhard at the Flamingo were gone, but she was at the Hard Rock on opening night, lighting up the dice while wearing a furry yellow bolero.
In the early 1990s, Las Vegas casino design had been reduced to a science: Each casino was made of much the same pieces in much the same order. The Hard Rock threw most of that formula out the window. It committed what might be the biggest sacrilege by opening without a buffet. (It doesn’t have one to this day.) Rockers, it seems, didn’t want to stuff themselves with crab legs or Salisbury steak. Still, they had to eat. The street-front Hard Rock Café remained, and in the hotel Mr. Lucky’s—billed as “the hippest coffee shop in Vegas”—offered 24/7 casual food, while Mortoni’s, open for dinner only, gave an Italian twist to the builder’s eponymous Los Angeles restaurant.
Mortoni’s is directly relevant today, when restaurants are the new big thing in Vegas, and many new ones are old ones imported from different places. The strategy of opening copies of successful Los Angeles restaurants at the SLS hasn’t paid immediate dividends, and Morton could probably explain why. Sure, he had the flagship Café for those who needed to say they’d been there and gotten the T-shirt, but he didn’t see the value in opening a carbon copy of Morton’s 300 miles to the east. Las Vegas would later get its Morton’s steakhouse less than a mile from the Hard Rock, but at that moment he wanted to make a statement, not a sequel. Instead, he gave his loyal Hollywood diners a reason to eat in Las Vegas by offering something just familiar enough to be comforting but different enough to provide novelty. You couldn’t say you’d had Morton’s Italian unless you went to Las Vegas.
For months early on, the Hard Rock ran at a 100 percent occupancy rate and averaged 96 percent for the first few years. At one point, the hotel was turning away 16,000 room requests a month. Morton thought enough of the Hard Rock’s prospects that, before he had bought out Harveys, he sold his chain of Hard Rock Cafés to Rank (which had already acquired Tigrett’s half of the empire), retaining for himself only the right to build Hard Rock-themed hotels west of the Mississippi River. He was all in.
Yet in 2006, at a time when everyone else thought Las Vegas would do nothing but grow, Morton sold the Hard Rock Hotel and all those trans-Mississippi branding opportunities to Morgans Hotel Group for $770 million. If your recollection is hazy, that’s as close to the top of the bubble as you can get. Accidental capitalist, indeed.
Under Morgans, the hotel underwent another round of expansion, but it failed to yield the same returns as the earlier expansion under Morton. Meanwhile, the Great Recession had hit Las Vegas with cruel force. In 2011, Brookfield Asset Management acquired the property, which by then was wallowing in debt, from Morgans.
It wasn’t just the location, the vibe or the branding that made Hard Rock’s star rise in the 1990s. A big part of it was Morton himself. Like plenty of risk-takers before and after in this city, Morton gambled on a vision. In this case, he won: The hotel he opened in 1995 became a cultural icon, and an indispensable link in the evolution of Las Vegas. Morton connected the city with a new generation, emphasized amenities and a branded lifestyle, and was the first to marry an international brand with a Las Vegas resort (something that other brands have found isn’t so easy). And the formula he discovered remains relevant even in the post-recession landscape: Unless conditions change radically, we may never again see anything like the megaresort spree of 1993, when the Luxor, Treasure Island and MGM Grand all opened. But we very well may be seeing more hotels like the Hard Rock.
Indeed, Morton himself, the Einstein and Elvis of the branded boutique hotel biz, won’t rule out a return to the big stage.
“I saw a vacuum in the early 1990s,” he says, “and I see another vacuum today. If I decide I want to go back to the table, I’d build a hotel unlike anything that exists in Las Vegas today. It’s a wonderful, vibrant community. And I’ve loved being part of it.”
David G. Schwartz talks about the history of the Hard Rock Hotel on 97.1 the point. Listen to the broadcast below.