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Operations

Vegas Nation

February 10, 2010 By: Glenn Haussman


Coming to a City Near You: Bottle Service, High Style & VIP Treatment

Defining nightlife during the last decade, Las Vegas has become the number one party city. No surprise there — these clubs are totally insane. Over-the-top design, the world’s hottest DJs, bottle service and readily available libations, celebrity drop-ins and thousands of partiers make Sin City the top place to get down. Companies such as Light Group, Pure Management Group and N9NE Group, and innovators such as Victor Drai and Cy and Jesse Waits, have reinvented nightclubs and ultra-lounges with a successful formula that’s boosted their bottom lines and made their venues must-experience places. It’s also made club owners in other cities jealous, as even in these troubled times, their dollar sales are enviable (see the Nightclub & Bar Top 100 list). These bastions of bottle service are so successful that owners and developers are looking to bring the look and feel of Las Vegas nightlife to second-tier cites such as St. Louis, Atlanta, Dallas and even Stamford, Conn. But with the neon jungle subscribing to a seemingly different set of economic laws, how can these new venues possibly replicate the success of places like XS, ghostbar and PURE in less decadent locales? Does Las Vegas-style nightlife travel well?

Some operators are finding it can, but it’s critical to think through every aspect of design, building and marketing.

Economics
Those looking to import the Vegas experience first need to take a sip from the cup of reality. Unfortunately it’s 2010 and not 2007. Back in those halcyon days, Vegas clubs were getting between $400 and $500 per bottle. They even had minimums of two or three bottles depending on the size of the group. But even Vegas isn’t getting Vegas prices anymore, and in most other cities, a bottle of vodka commands between $150-$225. 

Vegas can also operate clubs three or four nights a week rather than the two nights that are viable in most other markets. What’s more, Las Vegas developers don’t have to play by the same rules as those in other cities, so don’t immediately assume what they can do will work in your town.

In reality, depending on whom you talk to, creating this type of club or ultra-lounge is either feast or folly.

“Many of the Vegas-style clubs will not survive these tough times. In fact, due to the economic climate, Vegas-style nightlife is actually going down, not up. The market has already shrunk, but we are trying to increase the size of that market,” says Terry Tognazzini, owner of Thrive in Dallas, which was developed at a cost of $5 million. He explains that the economy has turned bottle service into an amenity, not a premium service, and that pricing has slipped between $200 and $300 a bottle. But it is still a major selling point. “The guests still feel like they are doing something cool by having the bottles at their table just like they have seen in Vegas. They feel like they belong and have a sense of importance. As the economy turns back, we hope we can inch up our prices to follow along with our guest comfort level.”

Meanwhile, Michelle Bushey, principal and creative director with Dallas-based design firm Vision 360, says it is very possible to create a winning Vegas-style club or lounge, but you have to truly understand the market you’re entering. “On the outside, a market can be truly different than from the inside,” she says, noting that to be a success it’s also important to be a notch or two higher than your best competitor. “You don’t need to be five notches above, but take it to the next level.”

Décor
One thing you can’t scrimp on is the overall look and feel of the club, experts say. “You have to have the glam and the bling. It has to have that look to impress,” says Nando Rodriguez, general manager of outlets at the Gaylord Opryland, a Nashville hotel complex that operates Fuse. “This place is stunning because you have to set the stage to create the VIP experience. It is what everyone equates Vegas to: a high-end experience. People want to feel like they are high rollers when they are in a club.”

Jeffrey Yarbrough, a consultant and the CEO of Big Ink PR and Marketing, says it costs money to make money. “There hasn’t been an IKEA yet for nightclub design and we haven’t quite found all the overseas knockoffs to make it very affordable. It is difficult to truly give a place a serious Vegas-style décor without getting close to spending Vegas dollars,” he says.

Vision 360’s Bushey says that if a club is more modestly sized there will be more money left over to spend on interiors and finishes. “It’s not just about the drink but the entire high-end experience. That is what people are looking for,” she explains.  To make sure your club has striking visual appeal, she urges hiring a designer with plenty lot of experience in this milieu. “You can value engineer design and give it the look and feel of an upscale Vegas style club without having to spend a fortune. Just be sure to bring in a designer who understands the industry.”

At Home Nightclub just outside St. Louis, director of nightclub operations Ray Davila explains that being located within the Ameristar Casino Resort and Spa was why the $15 million nightclub got all the “bells and whistles” when it came to design. “This is a true Las Vegas-style nightclub that is a lot nicer than a lot of clubs in Las Vegas,” he says, noting the $1 million sound system, expansive lighting system and plush booths for VIP service.

The 17,500-square-foot club also features two distinct rooms, a nightclub and a lounge. The main nightclub has two 30-foot bars on each end of the venue with three 5-foot red chandeliers centered overhead. Five red-leathered recessed banquettes (complete with Xbox gaming systems) rise above each side of the club and surround a 30-by-60-foot Brazilian walnut wood dance floor framed by 20 bottle service tables.

“You have to be aware of everything to do it right,” says Matt Bongiovi. As partner in 84 Park, an ultra lounge/boutique nightclub that debuted in Stamford last summer, he suggests having plenty of low banquettes and tables to ensure guest comfort. A standard table simply doesn’t create the effect you want, he says. Also, booths should have drawers in them to stow jackets and purses of guests.

Education
Another important element of creating the Vegas-style club and selling bottles is educating guests. Many customers simply don’t understand the value equation of getting the VIP treatment over general admission, but by taking the time to explain what VIP bottle service is all about, you can expect to more easily sell that real estate.

“There is a lot of education involved with our clientele. We have to basically sell people on the experience because they simply don’t know,” says Home’s Davila. “They ask what VIP is and we have to go through everything with them.”

Yarbrough agrees. “More educated consumers will choose bottle service and are more willing to test it out to see if they like it,” he says.

Other highlights to point out when making the sell include the privilege of skipping the long lines out front (while looking like a hotshot at the same time), having a home base for the evening and not having to flag down a bartender to get drinks refilled.

As for eliminating the sticker shock when they hear how much VIP status costs, that’s simple, too: Explain that they don’t have to pay a cover charge to get inside and that, if split between five or six people, the cost is really no more than they would have spent if they waited at the bar to drop $15 a drink several times throughout the night.

“In many ways it just makes lot of sense because it is more cost effective, plus it gives people what they crave: status,” Bushey says. “People are looking for intimacy and the feeling of being special, and this is the way they can do that.”

The good thing is that our experts all feel that the big Las Vegas players will stay just that. They’re not really interested in muscling into your territory. While some are venturing into other major markets, like New York or Miami, they’re most comfortable playing in their own sandbox, a market where they understand every little nuance.

“We don’t have any Vegas operators in our market to my knowledge — they seem to be having enough challenges of their own just taking care of business at home before trying to cross the desert to come to Dallas. The learning curve would be very high,” Tognazzini says.

One last thing: Those celebrity-fueled parties or really high-end DJs of Vegas? Don’t even think about it. There’s a real danger of creating an expectation that something extravagant will happen every weekend, and when you don’t have those folks in-house regularly, you may not fill your venue.

“[Operators] may have to leverage payroll for a month on a gamble that didn’t pay off,” Davila says. “That’s no good for anyone.”


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